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Forex Market Technical and Fundamental Recap

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jun 15, 2009.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
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    Today's Forex Analysis summary.

    Russia Announces Its Confidence in the U.S. Dollar

    Two overnight events sent the U.S. Dollar sharply higher on Monday. Firstly, the Group of Eight finance ministers hinted at an economic stimulus exit strategy and the Russians expressed confidence in the U.S. Dollar.

    The Group of Eight finance ministers signaling an end to the economic stimulus plans was eventually going to happen. Signs of an economic recovery have been building for a couple of months. The ministers haven’t decided anything concrete at this time. This news is expected to serve as a message to others that exit strategies are being considered. They feel it is much better to announce an orderly exit rather than act haphazardly.

    Russian Finance Minister Alexei Kudrin expressed confidence in the U.S. Dollar last night. This came after Russia and China had questioned the U.S. Dollar as the world’s currency. These comments reassured investors that it is too early to think of the Dollar as dead.

    Forex traders responded to these news events by jumping into the Dollar. This put downside pressure on all of the currencies.

    The Euro turned its trend to down on a break through the last swing bottom at 1.3804. The charts are now indicating that 1.3610 to 1.3439 is the next downside target zone.

    As mentioned earlier, commodity markets were hit hard on Monday as the Dollar strengthened. The Australian Dollar and New Zealand Dollar broke on the news, but the Canadian Dollar suffered the most damage.

    Many traders feel the USD CAD has dropped too far, too fast. In fact the Bank of Canada expressed its concerns about an expensive Canadian Dollar last week. It feels that a further rally will snuff out the current economic recovery by squelching demand for Canadian exports.

    The strong Dollar and less demand for higher-yielding assets have put the Australian Dollar in a position to challenge the last Main Bottom at .7828. A trade through this price will turn the Main Trend to down and could encourage more selling pressure. The first down side target is .7274.

    With demand for higher risk assets declining, look for the break in NZD USD to begin to accelerate to the down side. This pair has had a spectacular run on very poor fundamentals. Longs may begin to sell out and take profits as many feel this market is way overbought.

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    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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