After a six-day tumble – the longest in 18 months – will the US Dollar leverage a slump in risk trends to drive a serious rally this week?
Dollar Could Put in for a Natural Rebound or Explosive Rally
Over the past week, the Dow Jones FXCM Dollar Index (ticker = USDollar) suffered its worst weekly decline since December 2011 and its longest string of daily losses since December 2010. Taken without context, that is a strong bearish sign. However, when we consider the fundamental and technical backdrop; this situation looks like a launching point for a dollar rally.
Japanese Yen Surges but We’re Looking for Major Reversal
The Japanese Yen surged against the US Dollar, matching its best weekly performance since its June high (USDJPY low) on an otherwise quiet week for forex markets.
Bullish British Pound Trend to Gather Pace- Broader Range in Focus
The British Pound surged higher following the Bank of England (BoE) inflation report, with the exchange rate climbing to a monthly high of 1.5573, and the upward trending channel in the GBPUSD may continue to take shape next week as the economic docket is expected to highlight an improved outlook for growth.
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Source: Daily fx
