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When will this USD weakness end

Mon, Jun 29 2009, 15:47 GMT
by Pierre Charlebois

Trading Metro


Price action on most pairs has been range bound for the month of June to the noticeable exception of the USD/CAD.

With June coming to an end as the second quarter just prior to the 4th of July weekend, high volatility is certainly expected. Most traders and fund managers will be taking profit or cutting losses to close out the first half of the year on all markets. Bear in mind that the stock markets have put in an incredible performance in this second quarter and profit taking may trigger a sudden correction.

As far as currencies go; the ranges are getting tighter and should give way to some sort of break. The question still remains; will there be further USD weakness prior to some overdue strengthening.

USD Index - Door is still open to a double bottom suggesting fresh tops are possible on the EUR and GBP.

index

EUR/USD - New top is possible

EUR

GBP/USD - A break above 1.67 opens the door to 1.70

GBP

USD/CAD - The poor performing CAD may recover some but further upside in the chart is expected medium to long term

CAD

EUR/JPY - The pair appears to have topped however the short term suggest upside in the cards for now. A break above 1.3928 sends the pair higher. However the breach of the lower trend-line could send the pair to a new low.

ej


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