The greenback has been appreciating

The greenback has been appreciating sharply against the EUR since the release of the surprisingly weak U.S NFP report last Friday. Many analysts are still at odds as to why the greenback appreciated last Friday since the weak NFP report should have added to the existing bearish dollar sentiment. Also there was more significant negative data for the greenback this week as the ISM Non-Manufacturing Index released on Tuesday at 41.9 which indicated a sharp contraction in every major component of the report from new orders, to employment and to business activity. This negative data should have thrown the greenback to the bears as these disappointing key economic figures practically assure another Fed rate cut at the next FOMC meeting in March. This rate cut in March may once again be 0.50% as the Fed will make a last ditch attempt to pull the U.S economy out of a recession. Therefore this weeks’ greenback rally against the EUR is somewhat of an economic phenomenon from the fundamental perspective. Also the greenback continued its rally against the EUR yesterday as traders remained cautious ahead of todays ECB Interest rate Announcement. The main theory as to why the greenback is currently rallying against EUR on the back of this weeks’ very negative U.S data, is that many analysts expect the U.S economy to rebound in the second half of 2008 while the Euro-zone growth is believed to be heading for a freefall. Also the Fed is prepared to continue slashing rates in order to prevent the U.S economy from slipping into recession, while the ECB may stick to its hawkish stance with regards to its monetary policy today amid signs of slowing economic growth in the Euro-zone. So on a broader and longer term scale it seems that the when the U.S economy will be in reparation phase the Euro-zone economy may very well be climbing into the dark pit of slowing growth and rising inflation. This is one of the main explanations for this weeks’ greenback rally as at the end of a dark tunnel there is always light. Also the fact that the greenback is currently appreciating while there is very negative U.S data is another sure sign that this rally could be the beginning of a longer term trend.
Yesterday there was no real market moving news from the U.S and traders will shift all their attention to today’s interest rate announcements by the ECB and the BoE, therefore the greenback is likely remain relatively flat leading up to the announcements and the speech by President Trichet. However there could be sharp volatiliy on the back of these economic announcements. Traders should remain cautious as we could be at the beginning of a rallying greenback trend, which is not sufficiently justifiable at the moment.

Forex Technical Analysis

EUR/USD
The pair is trading in a range for the past three days showing after the sharp bearish correction and is now consolidating around 1.4620. The 4 hour chart is showing first buds of a bullish momentum whereas the daily chart is still bearish. Selling on high might be preferable today.
GBP/USD
The 4 hour chart is showing that the bearish momentum is regaining strength. The slow stochastic indicates that this trend might continue until the cable reaches the 1.9520 level. The daily studies confirm the bearish notion, and it appears preferable to go short today.
USD/JPY
The ongoing tight range continues still without a break of any significant importance. The daily chart is maintaining a slightly bearish indication yet with no distinct conclusion. The Bollinger banks are tightening which indicates that the break might be imminent. Traders are advised to hold for the break and than swing into it.
USD/CHF
The bullish correction move continues as the momentum appears to be continuing. The RSI and slow stochastic of the 4 hour chart are showing a floating status which strengthen the notion that the bullish move might continue. The current target price is around 1.1040.
Wild – Crude Oil
There is a narrowing bearish channel forming on the 4 hour chart as Oil now floats on the upper level of it. All oscillators show that an additional bearish break through the 86.20 level will unleash a much stronger bearish move which can provide Forex trader a great opportunity of a strong swing.

forex

Forex est le surnom universellement donné au marché des changes, ce terme est issu de la contraction des termes anglais Foreign Exchange. Le forex est encore appelé FX. Sur ce marché, les devises sont échangées l’une contre l’autre, à des taux de change qui varient sans cesse.