14th September, 2008
The fundamental analysis suggests further strengthening of USD; the rally will continue. The technical analysis shows a reversal signs - a more consolidation or a pause. Rally to continue, or a pause, or a consolidation ?
Last week showed the continuation for USD rally except for the last two days. Toward the end of the week, EURUSD revealed a clear reversal move. A point to note is that the weekend close for EURUSD remains just around the same figure as was noted as the previous weekend close. Interesting is to see whether or not "the history repeats." If repetition is going to happen, then, the USD rally will further cross the new height; maybe, toward the level of 1.3700 for EURUSD. For the last week, traders on short for this pair must have gained significant profits, especially those who placed the limit order not far beyond the mark of 1.3900.
From the fundamental point of view, a Slow Global Growth may prevent both the 'speedy USD rally' after the short consolidation and the 'apparent bounce back' to the point of 1.4500. Thus, a period of pause for EURUSD is more likely considerable at this time. To wait and see is the safest market action for the moment. The first two days after the market opening will tell a further story.
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