The USD is finishing the week sharply lower across the board, with the most pronounced weakness coming against European currencies. The move lower was ostensibly triggered by concerns over losses in the mortgage-backed securities market, but those fears seem to have dissipated relatively quickly, as US equity markets broke out to new record highs in the second half of the week. But the dollar continued to fall as technical levels were breached and systematic momentum sellers reacted to additional weakness. The USD's decline has now reached significant technical support levels in the US dollar index and I'm looking for the downmove to transition into a consolidation at the minimum, with decent potential for a corrective rebound in the USD.  Full text »

digg this! | del.icio.us | Technorati | Stumble It! Read More...

Filed under: Weekly Strategy