With persistent resistance along the 76.60 to 76.70 area, the dollar’s rally has yet to convince me that there is a trend reversal underway.
The likelihood that the end of QE2 will suddenly reverse the dollar’s downtrend is a big assumption even with the surrounding fundamentals that are increasingly suggesting some Fed officials’ (Plosser, Fisher, and Bullard) hawkish talk could translate into a rate hike sooner rather than later. This week’s Friday NFP will go a long way to either proving or disproving that this is the right direction to take.
Earlier in Monday’s trading session, the dollar’s bullish sentiment looked promising for bulls expecting a daily chart trend reversal. The area be Read more…
The rally in the Pound, which lifted it 10% from trough to peak, appears to be fizzling. The Pound is already down 3% in the last two weeks, and is trending downward. It now stands at a four-week low against the Dollar.
Looking back at the Pound’s two-month rise, it’s not hard to understand why it was unsustainable. You can see from the charts below that there was a strong correlation with the Euro and the S&P 500 over the same period of time. Thi