Dollar Decline Set To Continue

Posted by Rob

March 7, 2008

Further to our recent report on the USD record-breaking fall against the Euro, we have seen forecasts of further USD declines in 2008 against the Euro, Yen and GBP.

Morgan Stanley, the second largest US securities firm cut it’s forecasts with expectation that the USD will fall to $1.55.

Expectations of further Federal Reserve interest rate cuts have led to the USD declining against 14 of the 16 most actively traded currencies.

Today the USD make further record lows by dropping to $1.5430 against the Euro, the weakest since the European currency’s début in January 1999.

A Look At The Chart

From the 1-hour EURUSD chart we can see the price steadily climbing in favour of the Euro. The price is sitting within a rising channel of support and resistance, notice the channel is narrowing, therefore, look for breakouts either side of the channel in coming days.

Also worth noting is the price moving well above the 55-day moving average (red dashed line).

It may be too late to enter this rally, however looking at the Fibonacci line, we can look toward a retracement to the 23.6% line. This will give a potential entry to join the trend.

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