Dollar Finishes Well Off High

[forextrends24]

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

The U.S. Dollar finished higher after a choppy trading session but well off its high. The Greenback opened higher after global equity markets weakened following an overnight drop in demand for higher risk assets. The Dollar surged to its high for the day against most major currencies after the release of a better than expected Chicago PMI report.

This report signaled that the U.S. economy was recovering from the recession. After the early morning rush to a new high, buying fizzled as traders began to take year-end profits. The Dollar finished higher, but downside momentum is building which lead to a lower opening tomorrow.

The USD JPY surged to the upside, taking out the late October high at 92.32, on its way to a three-month high. Concern over a potential bankruptcy filing by Japan Airlines is putting pressure on the Yen. Stories are also circulating that Japan’s AA rating is in danger of being cut if the country does not shore up its debt situation. Finally, traders are also factoring in potential action by the Fed in 2010 that will lead to higher interest rates and a stronger Dollar. Pre-holiday profit-taking triggered an intra-day correction but the market was able to hold on to its gains. Continue to look for the Japanese Yen to weaken unless there is an unexpected shift in the fundamentals.

Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical ####ysis and Forex Education

Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.