By Russell Glaser – The dollar continues to fall as traders sell the dollar in light of the Fed’s recent comments that open the door for more quantitative easing. However, the euro is rising despite a selloff in equities.
Yesterday the Dow Jones Industrials finished the day down 0.2%. Despite the down day for equities, the dollar was also weaker with the euro and the Swiss franc putting in a strong performance.
Today traders are going to be eyeing data releases in the US for direction in the FX markets.
USD – Unemployment Claims – 12:30 GMT
Expected: 451K. Previous: 450K.
The weekly data for new unemployment benefits may surprise the market with a positive outcome, helping to increase risk appetite and a rise in the rate of the EUR/USD. Traders should be targeting their EUR/USD bets at 1.3510.This level is the 50% Fibonacci retracement from the 2009 high. Support is found at the height of the June to August bullish move at 1.3330.
USD – Existing Home Sales – 14:00 GMT
Expected: 4.11M. Previous: 3.83M.
This report measures the annualized number of residential buildings that were sold in August. If the report comes in positive, it is typically dollar positive. But this time we may see the report serve to increase risk taking and provide a boost to the weakened US equity markets. This would in turn spur traders to sell the dollar and buy higher yielding currencies such as the Aussie dollar. The AUD/USD could rise to yesterday’s high just below the 0.9600 level.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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