Home » USD index » USD Index : Technical Analysis 24 Sep 2009

USD Index : Technical Analysis 24 Sep 2009

USD Index Forex Technical Analysis 24 Sep 2009

USD Index Forex Technical Analysis 24 Sep 2009

The long awaited FED rate decision for interest rates finally arrived last night, and as expected the ultra low interest rates for the US remained on hold, with the FOMC indicating that this would be the case for some time to come, so for currency options trading US dollar and weakness seems set to continue in the short term at least. The decision was as expected and provided little in the way of support for the US dollar which initially moved sharply lower, only to recover almost immediately as the statement expressed concerns regarding the US jobs market which continues to suffer in the recession. This rhetoric sparked a sell off in the equity markets late in the currency options trading session which in turn provided a boost to the US dollar, which closed the session higher with a rare blue up candle!   However, the tone of the report was far from US dollar positive, and the bearish picture remains firmly in place, with dollar index firmly below all three moving averages. With the US dollar now seeming to be the favoured currency of the carry trade which is being helped along by a deafening silence from the Central Banks,  it will be some time before we see any sustained rally in the US dollar.  Any return to dollar strength can only occur once we see a return ( or the prospect of a return ) to higher interest rates and/or market intervention.    For currency options trading, the US dollar index remains bearish in the short and medium term, and we will now have to wait for the next FOMC meeting or any statements from the G20 now taking place for any positive news for the currency.

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