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Market Opinion

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Dollar trades lower today.

Wed, Feb 4 2009, 02:42 GMT
by James Whyte

ForexAmericas

In the news: Today at the closing bell in New York, stocks closed higher on better than expected pending home sales data, along with positive earnings from Merck-driving health stocks higher. There was also money moving into technology stocks on a positive outlook for the future in this sector. The Dow closed up 1.72% in today’s trading session. The stocks move higher today was due to the continued slide in the dollar at midday. We have also noticed an inverse correlation in the two. Also this morning Republicans introduced a stimulus plan of their own, mentioning; corporate tax cuts and tax credits for home buyers. 

In focus today:  

USD/JPY: As the dollar weakened against most mayor currencies in today’s session, the dollar/yen was able to hold the bears from a sell off. At the end of the day and most of the trading session the Usd/Jpy was able to pare loses from earlier in the session, as the U.S. equity markets traded to the upside. The Usd/Jpy has been trading between 90.72 and 88.57 - low from today. However, it has recovered from those lows during the New York session and now Asian session. If the data from the U.S. continues to surprise the markets, we should definitely see a come back in the Usd/Jpy back above 90.72 as equity markets take in the good news. On the 1h chart we have seen the 38.2% Fibonacci retracement to be providing good resistance (89.95/90.00) with two tops on February 2nd and the on the 3rd, so that is a level that we would lookout for.

Published on  Wed, Feb 4 2009, 02:49 GMT