Tuesday, 22 Sep 2009 Dollar Declines on Global Economic Recovery

Tuesday, 22 Sep 2009

Dollar Declines on Global Economic Recovery

The USD has declined significantly today, as the global economy led by the U.S. continues to show positive signs of recovery. As a result, U.S. and European equities are trading higher. This equities rally was initiated by UBS and Goldman Sachs saying that better earnings will push stock prices higher. All this seems to have added to the downward trend of the USD today, as investors become more confident, and raise the stakes, which has led to higher risk taking today. Therefore, riskier currencies such as the GBP have gained ground. Also, volatile commodities, including Crude Oil and Silver have also made big gains today.

Much of Tuesday's trends are set to continue for the USD and its most traded crosses, as the trading day continues to unfold. The USD/JPY cross is trading lower by nearly 40 pips at 91.36. The EUR/USD and the GBP/USD crosses are very bullish today on the weak Dollar. The upcoming news releases that you should follow are the Canadian Core Retail Sales at 12:30 GMT and the U.S. Richmond Manufacturing Index data at 14:00 GMT. If you forex traders want to make some big returns today, then it is a good idea to buy into the USD, EUR, GBP and AUD now, whilst the volatility in the forex market is still high.

GBP/USD Upcoming Bearish Correction

Attention forex traders, you need to take a look at the GBP/USD 1-hour chart. The technical analysis supports an impending bearish correction. Point 1: The Bollinger Bands show the GBP/USD cross sitting on the upper border in the overbought territory, indicating that the next move may be in the downward direction. Point 2: The upward trend seems near its end, as a bearish correction seems imminent. Point 3: The RSI indicates that the pair floats in the overbought territory, indicating downward pressure.

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