Dollar Advances in EURUSD Pairing

Posted by Rob

April 1, 2008

The USD rose to it’s highest value against the Euro this year.

UBS and Lehman Brothers claimed they’re raising $19bn, bolstering investor confidence in the USD.

Lehman Brothers sold $4bn in stocks and UBS announced plans to seek $15bn in a rights offering, leading to the USD gaining against the Swiss Franc (CHF) and the Danish Krone.

According to Michael Malpede, a senior currency analyst at Man Global Research, “we are going to see the dollar bounce further.” - Bloomberg

The US dollar advanced to $1.55679 against the Euro at 10:39 a.m. in New York, from $1.5788 yesterday.

A Look At The Chart

The 1-hour chart for the EURUSD shows a strong downward trend in favour of the dollar. We can see the strength of the down trend as the stochastic hasn’t risen enough to touch the 80 mark signifying overbought territory.

It is expected that the USD will continue to recover against the Euro after the injection of funds by UBS and Lehman Brothers, however, for how long this trend will continue is unknown.

In the short-term intraday trades should be in favour of short positions on the pairing, until fundamentals favour the Euro or we see negative news on the USD. A significant point to watch would be the breaking of the resistance line, marking the potential end of trend for the dollar.

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