Looking for reasons why the USD was weak again yesterday will bring nothing at all in these times, when central banks around the world are struggling to keep their economies afloat, with near zero interest rates. The dollar was technically speaking just overbought again, still within its wellknown trading bands since the end of last year. True, the currency bears some selling tone longer term, reflecting future inflation fears. But these must be confirmed first by hard economic facts - so far, there are no signs of that. So we better concentrate on the market and technical aspects, which speak for a continued sideways market this week.
In today’s trading, we see some more strength in the major pairs against the dollar, but losing some of their steam soon - downward corrections are in the cards. Below are our detailed projections in these pairs. Interesting will be the market’s reaction on the release of the U.S. trade balance for April, at 14:30 CET, where an improvement is expected, and the U.S. Beige Book of the Fed, at 20:00 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Still on its recovery path, the pair is currently trading at 1.4097 in early European hours. We see a test of the resistance levels around 1.4200 today, from where a setback could follow, down to 1.4090 again.
GBP / USD
Cable is gaining more ground this European morning and is right now priced at 1.6355. We expect the upward movement to lost steam today, meeting resistance levels around 1.6450. Downmoves could follow from there, to the day’s support at 1.6320.
USD / CHF
With support levels soon around 1.0700, the dollar is trading currently at 1.0740 against the Swiss franc. We expect the support level to be tested today, but not broken. Recovery moves from there are likely, up to the 1.0820 mark.
USD / JPY
In the usual contrast to other pairs, the dollar recovered in late Asian and early European trading against the yen and is currently priced at 97.90. We see slight downward corrections in today’s trading, to levels around 97.60.
