Monday, 4 Jan 2010

US Dollar Down, but Not Out

The USD took a turn for the worse in today's early trading. Against the EUR it dropped as far as 1.44, and currently trades at 1.4380. Against the British Pound, the greenback has fallen towards 1.6225. Speculators were expecting a short-term fall in the Dollar in today's trading as many were unwinding their year-end USD hedging positions. However, the USD is currently testing a number of significant price barriers against many of its major counterparts.

Comparing the USD to the JPY in the short-term, for instance, seems to indicate that the USDJPY pair has experienced a sustained upward movement, and could continue to do so through this week. On the other hand, in a longer-term analysis of this pair, it seems that the USDJPY is at a peak point within a larger downtrend and should go through a downward correction in the coming days. The same appears to be the case for the EURUSD, with targets at 90.00 for the USDJPY and 1.4300 for the EURUSD.