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Dollar Gains as Investors Shy Away from Risky Assets

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Nov 20, 2009.

  1. forextrends24

    forextrends24 New Member

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

    The U.S. Dollar posted a strong gain versus major currencies on Thursday as investors pulled money out of higher risk assets and sought refuge in the safer Greenback. Recent weak U.S. economic data is making traders think twice about buying riskier stocks and commodities at the current lofty levels.

    The EUR USD traded sharply lower early in the trading session but managed to erase more than half of the loss by the close. Traders have been sensitive to recent comments from European Central Bank President Trichet who tried to talk up the Dollar.
    From a technical perspective, the Euro is range bound between 1.4625 - 1.5049. The mid-point of this range at 1.4865 is becoming short-term support. A close below this figure will be a sign of weakness. Regaining 1.5000 on a closing basis will be a bullish sign.

    GBP USD traders largely ignored friendly October retail data and pressured the British Pound most of the day. Investors are still trying to sort out the meaning of the split vote between Bank of England members regarding its quantitative easing plan. Some say there is mixed interpretation of the economy while others feel that this is a sign the BoE may begin easing up on its asset-buyback program. Either scenario is making British Pound traders uncomfortable holding long positions. Technically, the recent strong rise was a little too much for the market to handle. The current overbought condition could trigger a retracement all the back to 1.6292 before serious buyers re-emerge. Credit issues are beginning to crop up again which could make long traders nervous.

    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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