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Forex Education and Analysis

PFX Forex Trading Outlook: 21 July 2008

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LearningMarkets.com
, 07-22-2008 at 06:56 PM (1204 Views)
REVIEW: 21 JULY 2008

The U.S. Dollar Index appears to have successfully tested its new resistance level and is starting to move lower. This is a good sign for all of you U.S. dollar (USD) bears out there.

This most recent bearish move for the USD was also confirmed by support bounces on both the price of gold and the price of oil---two commodities that have had an inverse correlation with the USD as of late.

A poor reading on today's U.S. Leading Index announcement---which showed a decrease of 0.1%---didn't help the USD's cause today either.

PREVIEW: 22 JULY 2008

While the USD is under some bearish pressure, don't expect it to drop into a free fall. An apparently stabilizing U.S. stock market and the looming possibility of a 25 bps interest rate hike at some point this year should give the USD some support.

The USD may also get some support from FOMC member Charles Plosser, President of the Federal Reserve Bank of Philidelphia, as he speaks tomorrow. He has been called one of the inflation hawks of the FOMC and could have some choice words to buoy the USD.

Bank of England president, Mervyn King, is also scheduled to speak tomorrow. With the GBP/USD at a key inflection point of 2.0000, his comments could have a dramatic effect on the near-term movement of the GBP/USD.

Here are the economic announcements you need to keep a close eye on tomorrow:

- CAD Retail Sales
- AUD Consumer Price Index (CPI)

Keep profiting with forex.
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Comments

  1. tom64's Avatar
    The last two days have been devestating for dollar bears. The dollar has strengthed over 200 pips in three days. A lot of movement, most likely short lived but the strength can't be denied. The drop in commodities has taken some pressure off the dollar, and hopefully it will continue to do so.
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