Monday, 25 Oct 2010

Dollar Strengthens Following Positive Existing Home Sales Data

The U.S. dollar is currently strengthening against most of the major currencies. The dollar gained about 70 pips against the euro since early trading and the EUR/USD is trading near the 1.4000 level. The dollar appreciated against the British pound as well.

The dollar gained today following positive housing data that were released from the U.S. economy. Sales of existing home rose more than projected in September, indicating that the industry is beginning to stabilize. Purchases increased by 10 percent to 1.53 million annual rate from 4.12 million in August, beating analysts' forecast for 4.29 million purchases.

Technical

A bearish cross on the 4-hour chart's Slow Stochastic has taken place above the 80 line, suggesting that the dollar's appreciation might prolong. The RSI continues to point down, also indicating that the pair s likely to proceed with the bearish trend today. The MACD on the other hand continues to provide bullish indications, signing that the bearish correction might end by tomorrow.