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U.S. Dollar Weakens, Commodities Strengthen on Bank Analyst Comments

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, Jul 13, 2009.

  1. futuretrends24

    futuretrends24 New Member

    Apr 30, 2009
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    Today’s sample of Futures Analysis from FuturesHound.com

    The U.S. Dollar started the week on the bull side of the market as its uptrend was expected to remain intact. Trading was anticipated to be defensive. Investors were most likely to remain risk averse while stocks and commodities continued to remain weak and the global economic picture was once again moving toward bleak. The overnight rally highlighted the fact that traders were becoming more sensitive to the weakening equity and commodity markets and more attracted to safe-haven currencies like the Yen and the U.S. Dollar.

    This scenario changed early Monday morning when analyst Meredith Whitney upgraded her recommendation in the Goldman Sachs Group from neutral to buy and made other bullish comments regarding the banking sector. Her comments were the surprise event that equity and commodity markets were looking for given the recent downtrend and oversold status. The subsequent short-covering rally in the stock markets and some commodity markets forced currency traders to rethink their risk adverse positions and encouraged liquidation to more acceptable sizes given the possible shift in investor sentiment from bullish Dollar to bearish Dollar.

    Although it is too early to tell if this is going to lead to a change in trend in the equity or commodity markets, it is important to note that a possible short-term bottom may have been formed in these two asset classes that could trigger 50% or more retracement.

    Read full article at FuturesHound.com as well as Futures Analysis, Futures Education and exclusive timely market Gann Analysis

    Disclaimer: Trading on 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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