The US dollar recovered from an earlier dip against most major rivals yesterday following data on weekly jobless claims, benefiting from pressure on the euro after a report a German bank may issue more shares.
Right now (06:58 am GMT) trading at 1.2689
The US dollar mostly weakened earlier during European trading, however as the GDP q/q data release is approaching (in about a half hour, at 12:30pm GMT) the US dollar is growing stronger with EUR/USD reaching a low of 1.2777, indicating that forex traders are back in the quest to safe-haven currencies (US dollar, yen).
“Better European growth news doesn’t alter the fact that the drivers of the euro’s recovery against the dollar are all pretty much played out,” wrote strategists at Societe Generale, cited by MarketWatch. “The sovereign credit crisis faded, European short-term rates rose, U.S. bond yields made a huge downward adjustment, and as we can see, European growth dramatically outperformed the U.S.”
Second-quarter GDP growth for the US economy, the world’s largest economy, is seen likely to be revised lower today in about 30 minutes after data on international trade for June released earlier this week showed an uptick in imports and a sharply wider deficit between exports and imports.
The dollar gave up much of its earlier gains yesterdar after the Federal Reserve expressed more concerns about the outlook for the U.S. economy. However during Asian trading it regained its strength against the euro and is currently trading at around 1.3110.
“On the economic front, they sounded much more downbeat,” said Aroop Chatterjee, a forex strategist at Barclays Capital, cited by MarketWatch. “That’s a change from the rhetoric we’ve been hearing from Fed speakers and past FOMC statements.”
Still, the potential for the dollar to fall much further is limited, Chatterjee said. “In the event the economic outlook worsens, there will be knock-on effects to global growth,” blunting gains by the euro or other major currencies.
It’s about 04:40am GMT and I just bought a couple of forex pairs.
Buy USD/CAD @ 1.0330
SL as per my trading plan
Target: 1.0450
Here’s the Daily chart of USD/CAD:
Moved my Stop Loss to 1.0410 for at least a 20-pip profit.
Things are definitely looking good in this forex pair.
Here’s the daily chart of Dollar/Swiss franc:
It’s 04:58am GMT. I just ventured out of my comfort zone (the yen crosses), and bought USD/CHF at 1.0390 with a stop as per my trading plan, and a Target well above 1.05
It looks to me like this pair should jump up on the daily chart. The Swiss franc is way too strong for the Swiss Nat’l Bank not to intervene. At least these guys intervene quite regularly (as opposed to the Bank of Japan who do it once in a blue moon).
Here’s the hourly chart of USD/CHF:
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Here’s the daily chart of USD/CHF:
