Wednesday, 7 Oct 2009

USD Reversal in the Works

The dollar rose against most of its major currency pairs on Wednesday as optimism stoked by Australia's interest rate hike dissipated and traders said the greenback's recent decline was overdone.

The dollar also rebounded from a more than eight-and-a-half-month low against the yen hit after Japanese Finance Minister Hirohisa Fujii said he was quietly watching currency moves and that USD/JPY was driven by dollar weakness rather than yen strength. Markets took the comments as a sign that the yen's trading level is not yet a worry for Japan.

Tomorrow, in a day that forex traders cannot afford to overlook, a batch of data is expected from the leading economies. Both the European Minimum Bid Rate and the U.S Unemployment Claims will be released on the same day, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits.

Silver on Course for Bearish Correction

Silver's sustained upward movement has finally pushed its price into the over-bought territory on the 4-hour chart's RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.