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Bullish dollar.

Tue, Jan 6 2009, 22:38 GMT
by James Whyte

ForexAmericas

Market View
Today's equity markets finished the day higher with the Dow Jones closing back above 9,015.20, a gain of .69 percent. The Nasdaq close up 1.50 percent. The markets were able to retain its gains even after the Fed Minutes indicated the December cut was due to the continuing bad economic data. Most of this confidence comes from the proposed Stimulus package by President elect Barak Obama. The market has also noticed a shift of money from US Treasuries into corporate bonds and even stocks for a higher return.

In focus today:

USD/JPY: Dollar Yen has been on an uptrend since the beginning of the New Year and reaching a new high today of 94.61. Most of this move higher is due to the reassurance of the equity markets and the steady rebound we have seen this so far this week. Although the pair did retrace due to the FOMC minutes out today. The minutes indicated that the FED based its cut from last month due to the clear signals from the deteriorating economy. The trend so far is up, with support at 93.50/60 and a possible channel formation on an hourly time plot.

EUR/USD: The Euro too has been hit by a bullish dollar run. The speculation behind this move has been the Obama Stimulus package, and the bad economic data out from the Euro Zone. We are seeing resistance at 1.3540/50 level after a rebound from the low of 1.3313 in early NY late European session. Tonight ECB President Trichet speaks and the German unemployment change will be announced. This data should put additional pressure on the Euro driving it back down to 1.3350 level.

Published on  Tue, Jan 6 2009, 22:40 GMT