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Dollar Facing Most Serious Test since Bottoming

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jan 4, 2010.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
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    Today’s sample of Forex Analysis from ForexHound.com

    Monday’s strong rally in global stock indices and break in the Dollar renewed talk of the resumption of the negative correlation between global equity markets and the U.S. Dollar. Aggressive traders appeared to be already placing bets today that the Fed would continue to leave interest rates low for a prolonged period of time. Today’s action suggests that investors could be getting comfortable with taking on more risky assets once again.

    The chart pattern in the U.S. Dollar Cash Index suggests that a new secondary lower top is forming at 78.22 and that the trend is poised to turn down on a break through the last main swing bottom at 77.33. The next downside objective is 76.31 to 75.80, which gives the market plenty of room to the downside.

    The Dollar opened the first trading session of the year slightly better but a strong surge in U.K. and China manufacturing data helped to pressure the Dollar overnight. These two better than expected reports triggered renewed interest in demand for higher risk assets. Speculation is that global manufacturing will provide the spark for a worldwide recovery.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.

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