Jul 14 2008
The Greenback Goes Bear Again
During the previous week the greenback underwent a volatile session against its major currency rivals, which ended with a sharp bearish momentum.
The USD began last week with some unfavorable news, as the Pending Home Sales index fell by 4.7% in May. However, a batch of subsequently positive data contributed to the Dollar’s volatility. The U.S unemployment Claims dropped from 404K to 346K. The Trade Balance showed that the U.S deficit has fallen by 1.2% from -60.5B to -59.8B, and the Prelim University of Michigan Consumer Sentiment had slightly risen from 56.4 in June to 56.6 in early July, terminating a five straight months of declines. Then on Friday, the unfortunate news regarding the stability of two U.S mortgage giants, Freddie Mac and Fannie Mae, had led to a sharp bearish trend for the USD. The news also connected these worries with the Fed’s avoidance to raise interest rates this year, enhancing the bearish move.
The week ahead will deliver many financial indicators that forex traders cannot afford overlook. On Tuesday, the U.S Retails Sales, Core Retail Sales and the Producer Price Index will be published, and they are all forecasted by analysts to show disturbing figures for the U.S economy. On Wednesday, a bundle of data is due. The U.S Consumer Price Indices are expected to preserve their current figures. The Treasury International Capital Net Long-Term Transactions is expected to suffer a deep slide from 115.1B to 60.0B, and the Federal Open Market Committee Meeting Minutes will take place.
As this week promises to be extremely intriguing on USD pairs, traders have an excellent opportunity to gain significant profits.
