FX Technical Strategy

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Sell−by date
Wed, Nov 26 2008, 06:50 GMT
by Lloyds TSB Financial Markets Economic Research Team
Lloyds TSB Financial Markets
Market overview
Has the dollar trend turned? Whilst this is a difficult question to answer, the evidence has swung away from extended dollar strength to cautious dollar weakness. Despite many opportunities to break the low, euro dollar failed to extend beyond the 1.2330/90 floor last week and this lack of follow through has caused selling of stale dollar longs. Naturally the markets are very short term focused, but with gold over $800, and silver and platinum finally trying to base (although rhodium still has yet to find support), the evidence has swung towards dollar and yen depreciation.
Equities remain key to this strategy and, as the market remains (understandably) sceptical of the prospects for short term gains, the potential for a continued squeeze appears to be the more likely outcome. The prospects for a floor in oil and soft commodities add to the bullish scenario, which should see the Australian, New Zealand and Canadian dollars continue to gain over the coming weeks. A potential reversal set-up in the VIX adds fuel to this scenario.
Published on
Wed, Nov 26 2008, 06:51 GMT
Archive
- Manufacturing and services PMI data for October on Monday
Published On Mon, Nov 2 2009, 07:04 GMT
- GBP/USD has gone some way over the past week
Published On Fri, Oct 23 2009, 14:08 GMT
- Fed FOMC speakers will outnumber economic data reports next week
Published On Fri, Oct 16 2009, 10:50 GMT
- Fed fund futures price a 58% chance of a 25bps rate hike by end of Q1 2010
Published On Thu, Sep 17 2009, 09:14 GMT
- The end of the US Labour Day weekend is traditionally marked by improved liquidity
Published On Fri, Sep 11 2009, 12:44 GMT
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