Brighter Outlook for Economy Supports U.S. Dollar

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Today’s sample of Forex ####ysis from ForexHound.com

The U.S. Dollar rallied following the release of a better than expected existing home sales report and never relinquished its gains. The rise in the Dollar following the release of good economic news is another sign that investors are returning to watching traditional fundamentals for direction. Gains are being limited this week because of thin holiday trading. Longs should watch out for pre-holiday profit-taking tomorrow and Thursday.

The Dollar received a boost overnight following another downgrade of Greece’s debt, but gave back those gains when the U.S. released a lower than estimated final third quarter GDP report. The good news from the housing sector underpinned the Dollar the rest of the day and the index closed a little off its high.

The Euro finished lower. The combination of a downgrade of Greece’s debt by Moody’s and the better than expected U.S. housing report helped to apply the downside pressure.

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