The dollar enjoyed a brief rally during early European / late Asian trading, taking it to its current highest level against the majors today. We see this move as a reaction to the lower share markets in Asia and the European exchanges which opened in negative territory. This means that the inverse relationship between the dollar and share prices continues to be a factor in the currency markets and expect this condition to dominate today's currency trading.
The important economic reports today will be (U.S.) Personal Income and Initial Jobless Claims at 14:30 CET and later, at 16:00 CET, watch for ISM Manufacturing, Construction and Pending Home Sales, all from the U.S.
Intraday Market Outlook for Day Traders
EUR / USD
The EUR / USD reached a low at 1.4552 around 8:00 CET and has recovered somewhat to trade currently at 1.4580, due in part to better than expected Eurozone PMI numbers. If stock markets remain weak, we expect a test of support at 1.4525 but feel this level should hold, giving the market a chance to rally back above the 1.4600 handle.
GBP / USD
Cable is currently trading at 1.6002, near the 1.6015 resistance level, as a sell-off of EUR / GBP helped support Sterling. If the 1.6015 resistance is broken, we expect a rally to 1.6125 will be possible. If resistance holds, then disappointed traders will take this pair back down to 1.5900 and perhaps to 1.5850.
USD / CHF
After the SNB intervention yesterday (which they denied), USD / CHF has been able to hold its gains and is trading currently at 1.0423. We feel that, despite the SNB intentions, the USD / CHF will soon come under pressure and probe the 1.0350 to 1.0300 handle level later today.
The important economic reports today will be (U.S.) Personal Income and Initial Jobless Claims at 14:30 CET and later, at 16:00 CET, watch for ISM Manufacturing, Construction and Pending Home Sales, all from the U.S.
Intraday Market Outlook for Day Traders
EUR / USD
The EUR / USD reached a low at 1.4552 around 8:00 CET and has recovered somewhat to trade currently at 1.4580, due in part to better than expected Eurozone PMI numbers. If stock markets remain weak, we expect a test of support at 1.4525 but feel this level should hold, giving the market a chance to rally back above the 1.4600 handle.
GBP / USD
Cable is currently trading at 1.6002, near the 1.6015 resistance level, as a sell-off of EUR / GBP helped support Sterling. If the 1.6015 resistance is broken, we expect a rally to 1.6125 will be possible. If resistance holds, then disappointed traders will take this pair back down to 1.5900 and perhaps to 1.5850.
USD / CHF
After the SNB intervention yesterday (which they denied), USD / CHF has been able to hold its gains and is trading currently at 1.0423. We feel that, despite the SNB intentions, the USD / CHF will soon come under pressure and probe the 1.0350 to 1.0300 handle level later today.
