Meant, of course, is the current weakness of the dollar, right now pausing. No wonder, it was in a heavily oversold market, especially against the euro. Let’s put aside the economic factors now speaking for a weakness of the dollar (early inflation) and look purely at the technical factors. First, there is a clear downtrend visible in the longer (daily) to shorter-term time windows (4 hours). But second, there is for the time being also an oversold situation evident, which speaks for a pause in the further downtrend of the dollar.

Accordingly, we project a sideways trading band for today’s hours, as outlined below in the major pairs. There are no fundamentally market-moving factors scheduled for today. An ideal day to follow some pure market and technical trading, although in most probably low volatility today.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The market, in a sound downward correction, is trading currently at 1.4685 from highs around 1.4750. It takes more to correct this market’s overheated condition, perhaps down to levels around 1.4620 today. From there a sideways trending market can be expected.

GBP / USD
The pound fell sharply this European morning, to now 1.6337, from highs in late Asian trading around 1.6450. We don’t see much further downward potential in today’s trading, but not any specific recovery either. A sideways market between the present levels and 1.6440 is most likely.

USD / CHF
Some bigger recovery moves set in this European morning, lifting the market to almost 1.0340, trading now at 1.0325. We see some more of this recovery to come, although in low volatility, to levels above 1.0350.

USD / JPY
This has been a very fragmented market in low volatility and lower levels over the past 3 days, usually a sign of a coming upmove. While we do not expect this move to come today, we see some recovery moves of the dollar up to the 92.00 level against the yen, currently priced at 91.30.