The dollar drifted higher overnight in Asian trading and is staying within narrow ranges today in early European markets. The sell-off in equity markets worldwide over the last two days has forced traders to cover short dollar positions but we do not see any serious accumulation of dollar long positions yet. Expectations for today's U.S. Non-Farm Payrolls at 14:30 CET have kept trading volumes low. Payroll surveys range betwween -175,000 to -225,000 and for the unemployment rate an increase to 9.8% from 9.7% is predicted.

If the actual report shows a worsening of the U.S. job market than predicted, we expect the dollar to rally as traders begin to establish long dollar positions in their flight to safety.

by Steve Nigg

Intraday Market Outlook for Day Traders

EUR / USD
The EUR / USD reached a low at around 1.4505 in Asian trading and is currently at 1.4543 in subdued trading. We see the 1.4500 support as an important technical level and a move below there could take the EUR / USD down to the next major support of 1.4325.

GBP / USD
Cable is currently trading lower at 1.5880 which is in-line with today's equity markets sell-off. Expectations are for the pound to fall further today, especially if the U.S. job numbers disappoint. Any move below 1.5840 could take the market to 1.5750 in today's trading.

USD / CHF
The dollar drifted lower against the Swiss franc in overnight trading and is currently trading at 1.0390. Because the Swiss franc also enjoys safe-haven status along with the dollar, the falling equity markets have not affected the USD / CHF as much as the dollar against the euro or pound. Still, we feel that technically, the dollar has the potential to reach 1.0450 today.

USD / JPY
For this week, the USD / JPY has remained in a tight range between 89.20 and 90.30 and is currently trading at 89.35. The established trend in the USD / JPY is downward but technically the USD / JPY is oversold and fears of intervention by the BOJ are supporting prices. No recommendation.