Yesterday, the U.S. dollar posted a new yearly low against the euro and fell sharply against all the majors, only to reverse course and rally overnight in Asian trading. Go figure. It appears that profit-taking and Bernanke's comment that the Fed will tighten monetary policy as soon as the economy improves are the reasons for the dollar rally. We maintain, though, our bearish outlook for the dollar and will look to this rally as an opportunity to establish new intraday short-dollar positions. See detailed reports below.

by Steve Nigg

Intraday Market Outlook for Day Traders

EUR / USD
After failing to hold above the 1.4800 handle yesterday, the euro has fallen back to near the important 1.4700 support and is currently trading at 1.4723, off its low at 1.4705 in early European trading. We view this action as an opportunity to re-establish a long EUR / USD position at 1.4700/1.4705, looking to take profit near 1.4800.

GBP / USD
Cable dropped below the important 1.6000 pyschological level in late Asian and early European trading and is currently at 1.5946. Next support is seen at 1.5930 and, if broken, the GBP / USD could drop very quickly a further 100 pips to 1.5850. We expect this level, though, to hold in today's trading.

USD / CHF
The USD / CHF has recovered from yesterday's fall and is currently trading at 1.0307. Trading volume in the USD / CHF has dwindled in the European market and movement has been restricted to a narrow range between 1.0300 and 1.0320 this morning. No recommendation.