Forex Investment and Currency Trading

The US dollar is on a rampage, taking back it’s recent losses with a vengeance.  There was an article in the Wall Street Journal this morning forecasting the Fed would only cut the overnight rate by 25 basis points at the next meeting (Apr 30) and then pause to re-assess the situation.  This is positive news for the US because the Fed would still be slashing and burning if things still looked dire with no end in sight.  It looks like the Fed might finally get the opportunity to take a breath amidst the chaos.  We also had some weak fundamental data out of Germany and the UK that are causing weakness in the other major currencies. 

This morning we witnessed a two-way battle around the 1.02 level, with the market trying to take USDCAD higher given the US dollar rally, but very strong selling interest capped any attempt to sustain gains past 1.02.  (There seems to be something big around the 1.02 area.)  People finally got fed-up and started taking some profit, triggering a stop loss run to current levels as many people had purchased US dollars, expecting a break of 1.02.

It’s still very whippy out there and I think we could end the week within the 1.0020 - 1.0220 range, with a slight bias towards the 1.02 level.