With Dubai`s debt uncertainty and the connected fears for European banks now vanishing, the euro is still in an ongoing acid test. No wonder then that the euro, after its year-long rally, is experiencing some problems lately, with the expectation of more negative fundamental economic news in the near future. Finally, there is also the negative technical outlook: Against the dollar, the uptrend line of the EUR / USD, well established since June 08, has been definitely broken to the downside (see daily chart).
Meanwhile, in intraday trading, the EUR still shows some weakness, although these moves in a "pre-year-end" market are not very indicative. Forex markets presently have adopted a "wait-and-see" attitude ahead of tomorrow's U.S. Fed policy announcement. Will Mr. Bernanke signal the end of the unprecedented money expansion? We feel though that it would be unusual for a central bank to make a last-minute policy change before year-end. The ZEW report this morning at 11:00 CET did not move the currency markets much, as the dollar had already started a rally at 09:00 CET, moving sharply higher against most majors.
There are a slew of economic reports from the U.S. this afternoon starting at 14:30 CET with PPI and Empire Manufacturing followed by Total Net TIC flows at 15:00 CET and Industrial Production and Capacity Utilization at 15:15 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Losing more ground this European morning, the pair, currently trading at 1.4550, is now even deeper in its long-term resistance zone and in oversold condition. We see at least a consolidation setting in today, with some recovery moves up to around the 1.4600 level.
GBP / USD
Far less volatile today than its neighbor euro, the pound started the day with some losses against the dollar, now trading at 1.6230. We expect this level to hold more or less in today's further development and expect a sideways market between 1.6320 and 1.6220.
USD / CHF
In a further up leg in early European trading, the dollar is now priced at 1.0400 against the Swiss franc. We do not see much more upside potential for today, rather a down correction phase towards the 1.0350 mark.
USD / JPY
The dollar traded stronger against the yen during the Asian market hours. That continued in the European morning market, bringing the price up to 89.40 at resistance lines. We expect the upmovement to lose steam in today's trading, paving the way back towards prices around 88.80.
Meanwhile, in intraday trading, the EUR still shows some weakness, although these moves in a "pre-year-end" market are not very indicative. Forex markets presently have adopted a "wait-and-see" attitude ahead of tomorrow's U.S. Fed policy announcement. Will Mr. Bernanke signal the end of the unprecedented money expansion? We feel though that it would be unusual for a central bank to make a last-minute policy change before year-end. The ZEW report this morning at 11:00 CET did not move the currency markets much, as the dollar had already started a rally at 09:00 CET, moving sharply higher against most majors.
There are a slew of economic reports from the U.S. this afternoon starting at 14:30 CET with PPI and Empire Manufacturing followed by Total Net TIC flows at 15:00 CET and Industrial Production and Capacity Utilization at 15:15 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Losing more ground this European morning, the pair, currently trading at 1.4550, is now even deeper in its long-term resistance zone and in oversold condition. We see at least a consolidation setting in today, with some recovery moves up to around the 1.4600 level.
GBP / USD
Far less volatile today than its neighbor euro, the pound started the day with some losses against the dollar, now trading at 1.6230. We expect this level to hold more or less in today's further development and expect a sideways market between 1.6320 and 1.6220.
USD / CHF
In a further up leg in early European trading, the dollar is now priced at 1.0400 against the Swiss franc. We do not see much more upside potential for today, rather a down correction phase towards the 1.0350 mark.
USD / JPY
The dollar traded stronger against the yen during the Asian market hours. That continued in the European morning market, bringing the price up to 89.40 at resistance lines. We expect the upmovement to lose steam in today's trading, paving the way back towards prices around 88.80.
