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Forex Market Technical and Fundamental Recap

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

  1. forextrends24

    forextrends24 New Member

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    Today's Forex Analysis summary.

    Despite a bearish trend in the U.S. Dollar to end the week, Forex markets for the most part finished the week in a holding pattern.

    The stronger British Pound, Australian Dollar and New Zealand Dollar held on to recent swing bottoms and closed in positions to test their recent highs.

    The weaker Euro, Yen and Canadian Dollars remained in down trends on the daily chart, but were able to recapture some of their losses over the past two weeks.

    The Dollar started the week on a strong note as equities declined triggering less demand for higher yielding assets. Following a series of better than expected U.S. reports late in the week and a recovery in equity markets, Forex prices stabilized as traders became less averse to risk.

    The U.S. Consumer Price Index seems to have had the biggest influence on the Dollar. Once this number came out weaker than expected, investors began to lighten up on the long side as they began to realize the economy cannot support a Fed rate hike in the near future.

    According to some, the Fed was scheduled to start gradually raising rates by late September, but the sluggish economy may curtail these plans. Some traders are saying the Fed will refrain from hiking rates until early next year.

    The Fed meets on June 24th. At this time it is not expected to change rates nor increase quantitative easing. Traders will be paying close attention to the commentary after the FOMC decision. In this announcement, the Fed is expected to use strong language to describe the state of the economy and how it plans to attack the slow growth.

    Since the Fed will not meet next until August, this FOMC statement is expected to carry substantial weight. Do not look for anything too volatile leading up to the FOMC meeting. Trading is expected to remain in a range as major players opt to stand on the sidelines until the Fed gives the market a reason to move in a particular direction.

    Once the meeting is concluded and traders have had a chance to decipher the Fed’s comments, volatility will pick up substantially. If the Fed hints at no rate hike until early 2010 then look for the Dollar to get hit hard.

    By ForexHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis

    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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