{"id":13446,"date":"2010-09-29T08:15:06","date_gmt":"2010-09-29T12:15:06","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13446"},"modified":"2010-09-29T08:15:06","modified_gmt":"2010-09-29T12:15:06","slug":"usd-tumbles-against-rivals-following-disappointing-news","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/29\/usd-tumbles-against-rivals-following-disappointing-news\/","title":{"rendered":"USD Tumbles Against Rivals Following Disappointing News"},"content":{"rendered":"

Source: ForexYard<\/a><\/strong><\/em><\/strong><\/span><\/p>\n

A disappointing US consumer confidence report released yesterday, caused the \u200egreenback to take heavy losses against virtually all of its main currency rivals. The \u200edollar appears to have stabilized in overnight trading, but only after it hit a more \u200ethan 2-year low against the Swiss franc. Analysts are doubtful about whether the \u200eUSD can bounce back from these losses in the near future.\u200e<\/p>\n

Economic News<\/h2>\n

USD – Greenback Falls Among Rumors of Fed Intervention<\/h3>\n

A worse than expected consumer confidence report released yesterday has sparked \u200erumors that the Fed will take definitive steps in order to help stimulate the ailing \u200eUS economy. The CB Consumer Confidence report came in at 48.5, well below the \u200epredicted figure of 52.5. The steps, which are commonly referred to as quantitative \u200eeasing, have yet to be implemented. That being said, even the possibility of a new \u200eFed stimulus plan has sent the dollar down. \u200e<\/p>\n

USD\/CHF dropped to its lowest level since March of 2008. Currently the pair is \u200etrading steadily around the 0.9760 level. Meanwhile, the greenback has hit a new \u200elow against the yen since the Bank of Japan moved in to devalue the JPY earlier \u200ethis month. USD\/JPY currently stands at 83.87, down over 30 pips from yesterday \u200eafternoon. \u200e<\/p>\n

Today, most analysts are forecasting the dollar’s bearish trend to continue. While \u200ethe Swiss KOF Economic Barometer, set to be released later today, is forecasted to \u200ecome in below last month’s levels, the USD is unlikely to see major gains as a result. \u200eAs long as investors feel that quantitative easing is still a plausible move by the Fed, \u200ethe dollar will likely remain low, making riskier currencies more attractive.\u200e<\/p>\n

EUR – EUR Makes Big Gains in Dramatic Trading Day<\/h3>\n

Rumors that the Fed will take new measures to boost the struggling US economy \u200esent riskier currencies soaring during trading yesterday, with the euro making some \u200eof the most dramatic gains. With the value of the US dollar low, and still dropping, \u200ehigher yielding currencies remain attractive to investors looking for short term gains \u200ein the currency market. \u200e<\/p>\n

The EUR\/USD pair approached the 1.3600 level yesterday, soaring almost 200 pips \u200ein the span of a few hours. The pair has since only staged a marginal correction, \u200eand is currently trading around the 1.3580 level. Against the yen, the euro saw \u200egains of over 100 pips during the same time frame yesterday. The EUR\/JPY pair \u200ecurrently remains steady around the 113.85 level.\u200e<\/p>\n

Today, analysts are forecasting further gains for the euro, as a lack of significant \u200eglobal economic news will likely keep dollar prices low. Traders will want to watch \u200eout for any surprise announcements from the Fed regarding the falling greenback. \u200eAny news about a fresh US stimulus plan could send the euro up once again.\u200e<\/p>\n

JPY – Yen Continues to Make Gains on the US Dollar<\/h3>\n

The USD\/JPY pair dropped well below the 84.00 level yesterday, marking a fresh \u200elow for the pair since the Bank of Japan (BoJ) intervened to devalue the yen earlier \u200ethis month. While the main catalyst for the drop was yesterday’s disappointing US \u200econsumer confidence report, the dollar has been falling consistently against the yen \u200eover the past few weeks. Further gains by the yen are likely to fuel investor \u200econcerns that the BoJ will step in once again to drive the Japanese currency down. \u200eJapan’s economy is largely export based, meaning a weak yen is in the country’s best \u200einterests.\u200e<\/p>\n

Barring any major moves from the BoJ today, the yen will likely continue to make \u200egains on the dollar, especially if the rumors of a Fed stimulus package persist. At \u200ethe same time, the JPY took substantial losses against the euro and Swiss franc \u200eyesterday. Should investor risk taking continue to dominate market sentiment, the \u200eyen will likely remain low against its riskier counterparts.\u200e<\/p>\n

Crude Oil – Oil Sees Heavy Fluctuations Ahead of Inventories Report<\/h3>\n

Over the last few days, the price of crude oil has been bouncing back and forth \u200ebetween around $75.50 a barrel and $77.00 a barrel. While prices have been \u200esomewhat influenced by the value of the US dollar, the commodity has not been \u200eable to establish a clear trend. In yesterday’s trading alone, oil jumped around 150 \u200epips, followed by a steep drop of around 70 pips, and finally by another upward \u200ecorrection. \u200e<\/p>\n

This trend may change later today when the latest US Crude Oil Inventory figure is \u200ereleased. Analysts are forecasting a drop in US inventories from last week. Should \u200etoday’s figure come in at the predicted level of -0.4M, oil may restart the bullish \u200etrend it experienced throughout last week. At the same time, traders will want to \u200epay attention. If the figure comes in above the predicted level, prices may fall in \u200eafternoon trading. \u200e<\/p>\n

Technical News<\/h2>\n

EUR\/USD<\/h3>\n

Most technical indicators show this pair in overbought territory, meaning a downward \u200ecorrection is likely to take place. The RSI on the 8-hour chart is right on the border of \u200ethe upper resistance line, while the Stochastic Slow on the 4-hour chart is very close to \u200eforming a bearish cross. Traders may want to go short on this pair today.\u200e<\/p>\n

GBP\/USD<\/h3>\n

After a heavy trading day yesterday, most technical indicators show this pair in \u200eneutral territory. These include the Williams Percent Range on the 4-hour chart, and \u200ethe Stochastic Slow on the 8-hour chart. Traders may want to take a wait and see \u200eapproach with this pair today, as a clearer picture is likely to present itself later on.\u200e<\/p>\n

USD\/JPY<\/h3>\n

The Relative Strength Index and Williams Percent Range on both the 4 and 8-hour \u200echarts are showing this pair well into oversold territory. Typically this means that a \u200ebullish correction is likely to occur in the very near future. Traders may want to go \u200elong with tight stops in their positions today.\u200e<\/p>\n

USD\/CHF<\/h3>\n

After a steep drop yesterday, technical indicators show that this pair may be poised \u200efor an upward correction. The Williams Percent Range on the 4-hour chart and the \u200eMACD on the 8-hour chart both show the pair in oversold territory. Going long may \u200ebe the preferred strategy today.\u200e<\/p>\n

The Wild Card<\/h2>\n

Dow Jones Industrials \u200e<\/h3>\n

After making some fairly significant gains yesterday, technical indicators are showing \u200ethat the Dow Jones may be due for a downward correction. The Stochastic Slow on \u200ethe 4-hour chart is close to forming a bearish cross, while the Williams Percent Range \u200eon the 8-hour chart is well into overbought territory. CFD traders may want to go \u200eshort in their positions today. \u200e<\/p>\n

Forex <\/strong>Market Analysis provided by ForexYard.<\/a><\/span><\/strong><\/em><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":"

By ForexYard – A disappointing US consumer confidence report released yesterday, caused the \u200egreenback to take heavy losses against virtually all of its main currency rivals. The \u200edollar appears to have stabilized in overnight trading…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13446","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=13446"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13446\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}