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Dollar Undecided Ahead of Important U.S. March Data

Although there is still a slight bid tone for the dollar in the currency markets, the trend is more or less sideways now in the major pairs.

The currency markets are reluctant to show any trend ahead of today’s and tomorrow’s U.S. economic data for March, an important month to determine whether the economy might have seen its trough.

The earnings season has also started with possible disappointments for the equity market which is still in a strong inverse relation with the dollar.

Since Wall Street is in overbought condition by now, disappointments in business results can trigger substantial profit-taking.

We expect a sideways trend in today’s market in the major pairs, which are right now showing some strength for the dollar in early European trading.

The projected trading ranges are listed below.

GBP/USD

Buyers failed initially at 1.4932 before sellers committed themselves and launched assault on the 1.4825.

As expected buyers came out to defend this support and the market then rallied to 1.4944.

Now this has eased this morning and has hit 1st retrace target of 1.4857.

Buyers are currently on top of this, defending from the bottom, but if this level does yields then sadly 1.4825 will once more be the sellers objective.

At these lows buyers once more will stand united to defend this support.

Sellers however will act more aggressively and whoever wins will determine the next move.

If buyers yield you are looking at 1.4710.

Dow Jones :

Resistance(daily close) : 9382.12, 9744.26, 10 091.30, 10 935.23, 11 164.57, 344.92 and 11 520.30.

Then 11 749.22, 11 970.00, 12 152.82, 12 600.24, 12 982.20, 13 162.50 and 13 320.00. 

Break of the latter will lead to 13 567.60, 13 668.74 and 13 792.53 (published on October 21, 2008).

Support (daily close):  8912.62, 8827.27, 8642.60, 8403.77, 8257.46, 8100.00 and 7920.08.

Then 7695.13, 7464.38, 7290.20 and 7177.50.

Break of the latter will lead to 7020.34, 6817.50, 6783.72, 6660.11 and 6484.22 (published on October 21, 2008).

Today’s support: - 7897.44(main), where a delay and correction may happen.

Break of the latter will give 7849.64, where correction also can be. Then follows 7818.40.  Be there a strong impulse, we would see 7796.22. Continuation will bring 7785.00.

Today’s resistance: - 7976.24 and 7998.75(main), where a delay and correction may happen.

Break would bring 8021.28, where a correction may happen.

Then follows 8049.37, where a delay and correction could also be.

Be there a strong impulse, we’d see 8077.46.

Continuation would bring 8100.00.

Bunds opened higher and traded up to 122.58.

The higher close suggests more of the same today and buyers will be looking to break the 122.58 point for 122.67/69.

Here profit taking should occur.

Sellers would also be looking at this 38.2% fib level and shorting the market for a quick sell off back towards 122.50/48.