Dolllar's Strength, Reasons

[4X4X]

Its a weekend, if find the opportunity to look into the market moves in the last week and redefine the strategy for the next week.

We have seen consistent strength of dollar in the last week:

* USD/CHF climbed from 1.2517 to 1.2840
* EUR/USD was dragged from 1.2312 to 1.2012
* GBP/USD dipped from 1.8184 to 1.7892

Almost 300 pips against CHF, EUR & GBP. EUR/USD touched the low the of past 3 months.

If we consider the events which took place in the past week, one was oil price touched the hightest of $50/barrel, then eased to $43/barrel and US troops in Najaf, Iraq got some success. There wasn't any significant move on last week's economic inidcators.

In my opinion, the events of the last week does not justify the strength of dollar, any comments?

[Mr 50%]

Technically - The Trend looks good for the $ at the moment, on the GBP 17000 looks much more likely than 19000.

The Buyings coming from the recent solid performance in the US stock and bond markets, which if it continues should continue to boost the $.

Oils come off the boil, which also helps. Iraqs not that big of an issue as compared with say the effect of new demand from China and India.

And on top of all that we have a policy of rising interest rates, which will probably continue to 2%, though that does not necessarily mean the long bonds will tank.

[merlin]

im no fundamentalist, but i do know there was a gang load of long EUR positions in the market. so the move was probably a combination of brokers going after long EUR position stops because volume was low, as well as covering of long EUR positions due to the settling oil prices.

i doubt the move was a result of new long dollar positions, because you are right, there was not really any news that helped the US last week.

[Nomad2012]

The Dow is comppleting a failed rally and a lower high rigfht now. Plus with poverty up 1.4 million it justs adds to the mountain of bad news on the $......I'm looking for an entry point against the dollar.

[elmagd2000]

Originally posted by Nomad2012
The Dow is comppleting a failed rally and a lower high rigfht now. Plus with poverty up 1.4 million it justs adds to the mountain of bad news on the $......I'm looking for an entry point against the dollar.

seems you are sharing Buffet his ideas and techniques . He invested fractals of his fortune (19 billion) against $ based on CNN.
Good luck

Hani

[psperos]

we need to understand that with all the bad news, that this has possibly been factored in over the last 12 months.

We have formed a top on the euro, tested it and now are consolidating. this is much like the top on the nasdaq when it bubbled to 5k. We need big news and actions if we want new usd lows.

The dollar may not have any basis to be strong here from a fundamental standpoint, but all that news was factored in. Also keep in mind that the usd/usd has increased almost 20% since this time last year. That's a major move , and it was based of traders factoring in bad fundamentals far beyond this time.

Traders are looking to the turning point for which they start to factor in the fact that even though things are still bad, a steadyness in fundamentals may come in the future with higher rates. That may not be at this point, but it may be enough to start exiting usd shorts.

The usd has a lot of upward pressure now, and imo we need some serious bad news and actions by the fed inorder to break down and make new lows again.

[eternalfuture]

Psperos...

Talking about factoring in, all the current bad news might have been factored in within the last 12 months, but what if we're now factoring in the bad things for the next 12 months (and afterwards)?

[psperos]

Originally posted by eternalfuture
Psperos...

Talking about factoring in, all the current bad news might have been factored in within the last 12 months, but what if we're now factoring in the bad things for the next 12 months (and afterwards)?

then that would mean the usd has already bottomed and is waiting for breakout confirmation. I'm not saying this's where i stand, i'm a short term trader anyway, but it could be the reality of it.