The present hallelujah on stock market floors, trumpeting an economic recovery ahead is a little overdone. First, the earnings season has not set in yet. Second, the credit conditions for business are nearly as bad as during the worst point of the crisis, with banks giving no quarter to ease, although they are buying their funds at near zero percent. Of course, they are earning big money now, but this is temporary, and the economy does not only consist of a financial sector. So it could easily be that the stock market took a lot in advance of coming business improvement, let alone how big this will be. For us, a sound downward correction is lurking for autumn, bringing the markets back to more reasonable levels. If that is the case, the Dollar will turn up again, following its inverse relationship with the stock market, as it is now on the downside. We remain with that downside for the time being, but are prepared to change the strategy anytime, should the stock markets go into reverse. Accordingly we put our trading bands in the major pair list. Note the exception of the Yen, where political influence is gaining slowly substance, putting a lid on the currency. Today's market movers could be the BoE publication of their monetary policy, at 13:00 CET, and the US trade balance for July at 14:30 CET. Intraday Market Outlook for Day Traders EUR/USD In another rally the pair again broke the 1.4550 level in late Asian trading, now in early European hours consolidating around this level, currently trading at 1.4560. Although heavily overbought now, we expect another up leg, perhaps after a slight downward correction to 1.4520. GBP/USD The 1.6550 level seems to be hard to break for the Pound, trading now just below it for the last two days. Currently trading at 1.6525 in this European morning, we do not expect any pronounced upmove anymore for today, and rather see a trading band between current prices and 1.6480 being established. USD/CHF Trading again around its lows in low volatility, the Dollar is presently priced at 1.0405. Based on the oversold situation, some recovery moves are likely today - reaching not very far though, to a maximum of 1.0450. USD/JPY The Dollar is not looking especially strong against the Yen now, trading around the support level of 92.15. But look at the weak and weaker Yen against other currencies, like the Euro. The special case of this currency, influenced now by political forces, is clear: a bout of weakness will occur to the Yen.

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