Daily Forex News

USD/JPY retreats mildly after rising to 99.45, slightly below 99.67 high. At this point, intraday bias remains on the upside as long as 97.85 minor support holds and further rally is still in favor. Corrective structure of fall from 99.67 to 93.53 suggests that rise from 87.12 is still in…

AUD/USD retreats after reaching 0.6967 but after all further rise is still in favor. As discussed before, corrective from 0.7091 should have completed with three waves down to 0.6768, after hitting 38.2% retracement of 0.6248 to 0.7091 at 0.6769. Further rise should now be seen to retest 0.7091. Break will…

After brief retreat, the greenback is regaining momentum today on talk of bankruptcy of GM and Chrysler. There are rumors that US President Obama believes a quick, negotiated bankruptcy is the most possible way for GM to restructure. Meanwhile, Obama is also prepared to let Chrysler go bankrupt if it…

Retail sales show gains, could indicate economic turnaround

The U.S. economy might be on the road to recovery, if one looks at retail sales data. Even though consumer confidence remains near historic lows, there has been some gains in spending. The Street reports on the improvement in retail sales since November:

A sharp turnaround in retail stocks since November could be hinting at an economic recovery sooner than economists are predicting, although analysts are unsure whether the valuation and sentiment is a good mix for investors looking to bet on a rebound. 

As you can see, there are some misgivings about this turnaround. However, if retail sales are hailing an economic recovery, it is likely to result in more weakness for the U.S. dollar. Things have been volatile the last couple of days, but as things improve on the global economic stage, the greenback is likely to even out a bit — on the downside.

See Also

• U.S. Dollar in Forex Trading
  What happens to the dollar as an economic recovery takes place?

No real threat to the U.S. dollar as the world’s reserve currency?

The news ahead of the G20 summit later this week is all about a proposal from China — and backed by Russia — to create a new reserve currency system in the form of special drawing rights on the IMF.

However, despite all of the play it is getting, the idea hasn’t been well-received by most of the economically developed nations. At any rate, reports FX Street, the U.S. dollar is likely safe as the world’s reserve currency:

There looks to be little, if any, credible threat to the US dollar’s status as world reserve currency. Even if talk on SDRs does gain momentum at or after the G20, there’s still little chance of dethroning the dollar without more detailed proposals with legitimate

World Bank President Robert Zoellick said recently, "to create a reserve currency you need to have more than a summit or a meeting, you have to create financial markets where people feel comfortable moving in and out of the currency."

Even though World Bank is planning to create a $50 billion trade fund, it is unlikely to have any sort of impact on reserve currency status. It is merely something designed to help ease the flow of money through the global financial system.

See Also

• U.S. Dollar and Forex Trading
  FX market and world currencies

Despite last week’s anticipated rise to 145.00, sterling retreated from there and closed near last week’s low, forming a small shooting star and a week of consolidation below said resistance would be seen, however, downside is likely to be limited to 135.00 and reckon 131.40/50 would remain intact and bring…

The greenback found good support above previous week’s low at 1.2192 and closed last week near the week’s high, resulting in a ‘hammer’ candlestick pattern, suggesting the retreat from 1.3066 has possibly ended at 1.2192 and the rebound from there should brin further gain to 1.2780/90 is likely, however, only…

The view from a jetliner at 30,000 feet can be clarifying. So the view of the American economy and its prospects from abroad can be instructive. From overseas the latest Washington political gaffe or media outrage doesn’t even make it to translation. No one in Saudi Arabia, where I have…

EUR/JPY’s rebound from 126.40 extends further to as high as 131.68 so far and at this point, intraday bias remains on the upside as long as 129.32 minor support holds. Further rise should be seen to 134.50 resistance next. As discussed before, EUR/JPY was supported above mentioned 126.06 cluster support…

GBP/JPY’s rebound from 135.71 extends further to as high as 142.24 so far and remains firm. Intraday bias is still on the upside as long as 139.49 minor support holds and further rise should be seen to 145.07 high first. As discussed before, GBP/JPY drew strong support from the rising…