Dollar Down to Weakest Level of 2009

NZD/JPY:

This pair’s sustained upward movement has finally pushed its price into the over-bought territory on the hourly chart’s RSI. Not only that, but there actually appears to be a bearish cross forming on the 4 hour charts’ Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

Obama Speech to Impact Dollar

Gold :

Gold prices rose significantly in the last week and peaked at $1003.45 for an ounce. However, the daily chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

U.S. Prelim UoM Consumer Sentiment to Lead USD Trading Today

Crude Oil:

Crude Oil has been very bullish this week, and has given big returns for many forex traders. The weekly chart’s oscillators seem to be showing mixed signals. However, the MACD of the 4-hour chart offers a more accurate picture that the trend for today may be a downward correction. Going short with tight stops seems to be the preferred choice for today.

Conflicting Beige Book Report

Stocks appear to be taking a breather this morning after yesterday’s 49 point gain in the Dow Jones Industrial Average. Traders are playing close to the vest after having had time to dissect yesterday’s Fed Beige Book where we got conflicting snippets like, retail sales are flat, loan demand continues to be weak, slight improvement in residential real estate, commercial real estate is weak, but overall economic activity seems to be stabilizing.

Traders are also standing pat in advance of this morning’s economic data where the Weekly Initial Jobless Claims are estimated to clock in at 560,000 versus last week’s 570,000. The July Balance of Trade is expected to show a deficit of $27.3 billion compared to June’s $27 billion. Given the recent precipitous decline in the value of our Dollar you might expect to see the next two reports show a significant easing in the deficit. Remember a weaker Dollar makes our exports more attractive to overseas buyers.

As for the Dow it appears to be headed for a 13 point lower open. The Euro eased to $1.4522 down a third of a U.S cent. Crude appears to be defying the stronger Dollar with traders awaiting today’s Weekly Oil Inventories where the latest estimate calls for a 1.8 million barrel decline in available Oil supplies, and a 1.5 million barrel drop in Gasoline. Last trade on Crude $71.68 up 37 cents.

As for the metals we find them flat to lower with Silver trading at $16.11 off 34 cents. Gold is $4.00 lower at $985.00. Palladium is $292.00 up $2.00. Platinum is off $5.00 and changing hands at $1279.00.

In other matters; President Obama laid out his new Health Care proposal in a one hour speech last night in front of the full Congress and the nation. While most agree that he did a masterful selling job; initial reaction shows no softening along party lines.

Today’s economic calendar:

BANK OF ENGLAND Rate Decision (volatile market event)
U.S. Initial Claims
U.S. Trade Balance
BANK OF CANADA Rate Decision (volatile market event)

GBP Anticipates Volatility before Rate Decision

GBP/CHF:

After a sustained downward movement, this pair is now testing the significant resistance level of 1.7200. With the price floating in the over-sold territory on the 4-hour RSI, and a fresh bullish cross on the 4-hour Slow Stochastic, this pair is facing an impending upward correction which may turn out to be a reversal. Forex traders can benefit from this movement by going long on this pair and at a great entry price!

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