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U.S. Dollar could be Forming Major Top

Discussion in 'Forex Daily News & Outlook' started by forextrends24, May 28, 2010.

  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 traded sharply lower on Thursday, giving the first indication in weeks that the event driven rally may be coming to an end. Pressure was on the Dollar all day led by the strong turnaround in the Euro. Additional pressure came from increased interest in stocks and commodities. Technically, overbought conditions also contributed to the Dollar’s weakness. The current chart pattern suggests the formation of a possible double-top with a confirmation set to take place when this index takes out the last main bottom at 85.33.

    Easing tensions in the Euro Zone helped to boost demand for higher risk assets on Thursday. Since last week, the Euro has been trying to form a bottom but has been met by both fundamental and technical obstacles in the process. On Wednesday, rumors that China was re-evaluating its Euro-denominated bond portfolio sent the single-currency lower along with crude oil and stock indices. Overnight trading was another story however.

    Wednesday night China’s foreign exchange reserves manager denied a news report that it was considering the sale of some of its holdings of Euro-denominated bonds. This helped the Euro rebound, sending the Dollar lower against most currency-linked commodities. With the Dollar trading lower, demand for higher risk assets rose.

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

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