The move above 10,000 in the Dow Jones Index has given confidence to investors seeking risk and has translated into a sharp dollar fall against the majors and commodity currencies. The Greenback has recovered some of its losses in early European trading but sentiment is still firmly set for continued dollar weakness. Of all the factors affecting currency trading, equity prices remain the most important and should be considered when trading currencies.

Today's economic reports include CPI for Europe and the U.S. More important will be the Jobless Claims report out of the U.S. at 14:30 CET. Also due out at 14:30 CET is the Empire Manufacturing report.

by Steve Nigg

Intraday Market Outlook for Day Traders

EUR / USD
After reaching a high of 1.4967 in Asian trading overnight, the EUR / USD pair has fallen prey to profit-taking and is currently priced at 1.4909. We see support at the 1.4900 handle and lower at 1.4870 more substantial support can be found. We would consider a small long position if prices reach the 1.4870 level.

GBP / USD
Of all the majors, cable has benefitted the most from the dollar's recent fall and is currently tradng at 1.6225. The GBP / USD has been the most volatile of all the major pairs and we expect this high volatility to remain a factor in near-term trading. Despite the volatility in the GBP / USD, we feel that the pound is currently overvalued and will wait for a correction before considering a trade.