The Week Has Come to an End and a Strong Dollar Sentiment Prevails

Daily Forex Fundamentals | Written by Crown Forex | Aug 08 08 14:21 GMT |


It's the end of another busy week and with the release of three different rate decisions from major economies with all deciding to hold rates steady, the sentiment in the market continues as all favor the dollar against majors in the markets. Companies continue to release earnings reports from the US including Fannie Mae and AIG who have reported losses for the second quarter but nothing has stopped the dollar as many believe that the Feds might hike their interest rates as soon as the next meeting.

Mr. Jean Claude Trichet was quite neutral during press conference after the release of the rate decision not being hawkish or dovish as he also added the Euro Zone is to expect sluggish growth in the second and third quarter of this year and with Italy contracting 0.3 percent, this just assured the fact. The Euro failed to find any support as it broke all trends and initiated a new medium term bearish channel now targeting the 1.50 figure after successfully breaching the support level at 1.5060 where if the currency continues to extend losses against the dollar, it is possible to see it reach the 1.4950s where this marks the sharpest drop in four years. The pair is ignoring the fact that it is heavily oversold and continues to travel the trend it set to the downside. The pair recorded a low of 1.5016 after starting the day at a high of 1.55314.

Following the same footsteps as the Euro and still impacted by a stronger dollar, the pound continues to depreciate as it is currently trading at the 1.9150s level targeting the 1.9070 and then the 1.9 figure. The BoE did not release any statements after their decision to hold rates steady at 5.00%. The currency recorded a high of 1.9433 before slumping to hit a low at 1.9145.

As for the Japanese Yen, it is currently testing the resistance level at 110.30s where if broken the next target will be at 110.60 before soaring to reach the 111.00. These levels are possible as investors are now targeting the dollar and especially after a report from the Japanese government showed that the economy's longest post war expansion has come to an end and that the Eco watchers survey indicated that the current and future outlook for the economy in July has slipped. After recording a low at 109.30, the USD/JPY pair hit a high at 110.35.

Crown Forex

disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.