Tuesday, 5 Jan 2010

Dollar Strengthens after Bleak Housing Numbers, Spot Crude Oil Continues to Rise

A sharp drop in the percentage of U.S. Pending Home Sales sparked traders to abandon riskier positions for the safe haven of the dollar. Immediately after the release, the dollar was unchanged; however, afternoon trading had the dollar significantly stronger versus the EUR and the Pound.

Currently the EUR/USD is trading at 1.4660 and the GBP/USD stands at six session low of 1.5985.

The price for spot crude is now trading up $0.20 off the opening price today after reaching as high $81.96; the highest price spot crude oil has traded in three months. Spot crude oil prices are sitting at a major resistance level near $82 and some analysts predict a significant breach in the near future.

Tomorrow will bring the release of the weekly crude oil inventory numbers from the Energy Information Agency. The forecasted reading for the economic indicator is expected to be a decline of 0.4M barrels for the previous week. A drawdown greater than the expected result could result in spot crude oil prices cracking the $82 resistance line in tomorrow's trading.

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