A new year may have begun, but the same fundamental difficulties of 2008 remain for the US economy and its currency. In fact, conditions have arguable deteriorated from just a few quarters ago; and policy officials are quickly running out of options to preventing a full-blown depression and another financial crisis.
- Euro Bounces from Key Support Versus US Dollar, British Pound - May Prove Short-Lived - British Pound Remains Strong Despite Signs of Impending BOE Rate Cut on Thursday - Australian, New Zealand, Canadian Dollars Reverse Course as Commodities Tumble
Direction and volatility are still highly uncertain for the broader currency market. However, in falling in line with momentum and fundamental, our proposed NZDUSD setup benefits from two of three possible scenarios.
The dollar's rally stalls after the government offers its forecast for a massive budget deficit in 2009. Event-risk traders now turn to the strong pound ahead of the BoE's rate decision.
The Euro has retraced close to half of December’s impressive rally against the US dollar and now looks poised for an upswing. The broad trend continues to favor a bearish outlook, with a correction higher offering an attractive selling opportunity ahead.