Finally the Dollar gains strength, but is it about to lose it again?

EUR/USD

So now it looks like the Euro is finally taking some pressure off the buck as it has been easing down from 4900 to around 4660 currently. On my last update I talked about that bearish divergence on the daily chart, and it certainly has paid off if you made a play on it since then. Right now I’m still feeling slightly bearish on the pair as both 4hr and daily stochastics are trending down. I would look for the pair to drop from its current price around 4660 to around 4600 some time tonight or tomorrow.

GBP/USD

The Cable has also dropped significantly over the past couple of days but still looks choppy in the overall picture. On the 4hr chart, all 3 of my moving averages have converged together making a my chart look like spaghetti. For me, this means that I will stay out for now. On the daily chart however, stochastics are trending down nicely and I think we will still see the pair continue to drop back down to around 2.0500 throughout this week. For now I will hold off and wait until I see something better.

USD/CHF

The Dollar has been on a real tear against the Swissy of the past several days now and seems to be putting on the brakes now. The pair has stalled at 1.1300 which could be a sign of exhaustion for the Greenback. However, 4hr and daily stochastics are still trending up even though daily stochastics are now in overbought territory. I think we may see the Dollar make on final push up to the 200 SMA on the 4hr chart at around 1350. After that, I expect to see the pair retrace down the rest of the week.

USD/JPY

The Dollar has also risen significantly against the Yen but now seems to be headed back in reverse. The pair has dropped from 111.00 to around 110.42. Although daily stochastics are trending up, 4hr stochastics are trending down which indicates more short term drops. I would look for the pair to continue dropping to 110.00 or even down to its 50 EMA and 100 SMA on the 4hr chart at around 109.80.

I’m not really big into fundamentals but I feel that they are important to discuss. In this section I will be posting fundamental tidbits that I find interesting from various sources. If you find an article that you think would benefit everyone, please email me (Big Pippin) with your username, the article, and a link to where members can read the entire article.

Now onto the Fundamentals:
  • Fed Forecasts Slower Growth and More Out of Work Next Year
    • The housing collapse and credit crisis will slow economic growth and nudge up unemployment next year, the Federal Reserve said Tuesday in a first-of-its-kind forecast that some economists believe will lead to interest rate cuts early in 2008.
  • Bernanke Sees Slower US Growth
    • Federal Reserve Chairman Ben Bernanke said Thursday that a host of economic problems, including the severe housing slump, will cause business growth to slow noticeably in coming months. Bernanke told Congress’ Joint Economic Committee that the central bank is watching developments closely, but gave no signal that it’s prepared at the current time to cut interest rates even further. He stressed that the central bank was keeping all options open, saying the Fed would be closely watching economic growth and the threat of inflation.
  • "Model Behavior"
    • Super Model Gisele Bundchen has decided that she wants to remain the world’s richest model by insisting that she be paid in almost any currency but the U.S. dollar! OK… Now the dollar has been officially dissed! Sure guys like Rogers, Buffett, Gross, Butler, Wiggin, and Bonner have dissed the dollar because of the fundamentals… But when a super model decides to side with us, well then we’ve got ourselves what I’ll call… "Model Behavior"!\
News events to watch for tomorrow :
  • No major news events are coming out tomorrow

For a list of all of tomorrow’s news events, check out our Forex Calendar

  • zakwatt

    eur/usd I made a pile of pips last month consistently going long on eur/usd. Some of the big boss bankers forecast for next year is for this pair to trade between 1.50 & 1.60. So on that basis my plan is to consistently go long each time the price takes a dip. Today I went long when the 30 min parbolic sar turned to green and last night I went long at a similar time (made a few pips on that one). So I think this pair will hit 1.47 before it goes to 1.46. So we will wait and see ! My t/p = 1.4716 (move s/l to b/even if 1.4702 achieved) otherwise s/l = 1.4633. Best of luck.

  • zakwatt

    eur/usd I made a pile of pips last month consistently going long on eur/usd. Some of the big boss bankers forecast for next year is for this pair to trade between 1.50 & 1.60. So on that basis my plan is to consistently go long each time the price takes a dip. Today I went long when the 30 min parbolic sar turned to green and last night I went long at a similar time (made a few pips on that one). So I think this pair will hit 1.47 before it goes to 1.46. So we will wait and see ! My t/p = 1.4716 (move s/l to b/even if 1.4702 achieved) otherwise s/l = 1.4633. Best of luck.

  • zakwatt

    Without wishing to appear boastful, but this morning my stop was just missed by 2 pips and I have just made a profit at 1.4716. I now await the next dip to re buy this one.

  • zakwatt

    Without wishing to appear boastful, but this morning my stop was just missed by 2 pips and I have just made a profit at 1.4716. I now await the next dip to re buy this one.