US Dollar- A One Hit Wonder?

EUR/USD

So my bearish assumptions on the Euro were completely false as the pair made yet another record high today. I don’t think we’ll see the pair sustain this kind of bullish run and if you look at the 4hr stochastics you can see that a bearish divergence is forming. Without any fundamental backing, I think we’ll see the Euro hold at 5500 and should see it start to fall from there.

GBP/USD

The Cable also shot up today just like the Euro and now its chart has somewhat of a mirror image of the EUR/USD. You can see that it looks like a bearish divergence is forming on the 4hr chart. Daily stochastics are also still trending down despite today’s move and seems to be heading out of overbought territory. While these are both good bearish indications, 4hr stochastics are still trending up which means the pair could still go north in the short term. I’m still going to hold off and wait to see what happens.

USD/CHF

I’m still getting mixed signals on the Swissy and am going to hold off. However, a good short term play would be to see if the pair can break below 1.0200. If it does, there is a good chance we could see it drop to its previous low around 1.0150. Be careful though because daily stochastics are trending up which means we are probably in for some bullish movement.

USD/JPY

The Dollar rose up to its 50 EMA on the 4hr chart like I said yesterday but since then it took a nosedive and fell back down to around 102.35. 4hr stochastics are trending down while daily stochastics have flattened out and is still in oversold territory. Right now things look muddy and I’m going to hold off on trading until I see something better.

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:
  • Upward Inflation Pressures For the Euro

    • The euro rose to a record against the dollar after European Central Bank President Jean-Claude Trichet said there is “strong upward pressure on inflation,” signaling he’s in no hurry to cut interest rates.
  • Warren Buffett says we’re essentially in a recession:

  • Dollar Falls to Record Low Against Euro
    • The U.S. currency has slid 4 percent against the euro in the past three weeks as the housing slump deepened and consumer confidence tumbled, leading traders to abandon bets the dollar and the economy would rebound as the Fed cut rates.
  • Bernanke Signaling Rate Cut?

    • The Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks," Bernanke said, hewing closely to assurances he offered earlier this month.
    • ncoming barometers continue to "suggest sluggish economic activity in the near term," Bernanke told lawmakers. At the same time, he added, the Fed must keep a close eye on inflation given the recent run-up in energy and other prices paid by consumers and businesses.
      For now though, the No. 1 battle is shoring up the economy.

  • New Home Sales Slip Near A 13 Year Low
    • New home sales slipped to a nearly 13-year low in January, according to a key government report on the battered housing market.
    • The reading was below the consensus forecast of 600,000, according to economists surveyed by Briefing.com, and was the lowest reading since the 559,000 rate reported in February 1995.
News events to watch for tomorrow :

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

  • NEWMAN07

    Could you please tell me the setting of stoch you are using to make this report
    thanks

  • NEWMAN07

    Could you please tell me the setting of stoch you are using to make this report
    thanks