The Advisor Weblog

Dollar gains extend; Pound may suffer more

Posted: 23 Jun 2011 05:00 AM PDT

Hi everyone! Dollar started a bullish rally past American afternoon that even moved USD/JPY 30 pips higher and that's a lot to say. While investors had already priced in QE3,Bernanke stated as usual that the pace of unemployment decline is frustratingly slow, yet he also played down QE3 comparing current economic developing with the one 1 year ago.

Stocks and commodities not just halted recent gains yet also reversed lower, strongly down in the day and giving dollar further support. Dollar approaches fast to recent highs against major rivals, and I would say that above those, we can start talking about a longer term reverse. One thing is however, making me doubt: we are in summer, we know summer equal ranges, and we know that we hardly have trend definitions in this time of the year. But well, nothing is 100% in forex,, and there is always a first time for everything ;)

I would expect also Pound to suffer the most these days, more if the pair remains under pressure and lose the 1.5920 area, recent daily lows. Daily chart is strongly bearish as you can see, and in that case, 1.54/55 comes at sight for next week.