Forex Training Blog

Forexmentor.com Forex Trading Price Action

If you look at a daily futures chart for the U.S. dollar, you can see that it has rebounded somewhat – up about three percent since April, when positive divergence on MACD occurred.  MACD is above both its trigger line and waterline.  But, it’s too early to party hard over a possible end to the greenback’s seven-year swoon. 

Since 2001, the dollar has lost more than 40 percent of its value on a trade-weighted basis.  A spate of recent better-than-expected economic reports gives Bernanke an out from cutting interest rates further – unless the economy shows signs of more trouble. 

Further interest rate cuts would be dollar-negative, and push foreign capital away.  Of course, a nasty recession would really test how serious U.S. authorities and their Group of eight partners are about reflating the dollar. 

This commentary brought to you by Peter R. Bain at www.forexmentor.com where you will find the best forex strategies.  

–Peter
forexmentor.com

See recent video AM Reviews at: http://www.forexmentor.com/sampler/