Dollar Resuming Rebound after Durable Goods Disappointment

Source: feedproxy.google.com

Dollar is set to resume yesterday’s rebound after disappointing durable goods orders released in US. Headline orders unexpectedly dropped -2.4% in August versus expectation of 0.1% rise. Ex-transport orders was flat comparing to consensus of 0.8% rise. The greenback is additional lifted by crude oil’s fall to as low as 65.05 as well as Gold’s sharp decline through 990 level. US stocks are also set to open lower. G20 leaders are believed to be in agree for a plan to force banks to tie compensations to risk and tighten capital requirements. On the other hand, the G20 countries would likely maintain the stimulus measures to support sustainable recovery in the global economy. Also, a “strong consensus” is believed to be forming for a policy framework to narrow global imbalances, which could see China boosting domestic demand, US increase savings and Europe raising investments, which would stabilize the dollar. Technically, there are some near term levels to watch today. Firstly, break of 77.09 resistance in dollar index will confirm it has bottomed out at least in short term. Ideally, this should be accompanied by a break of 1.4611 support in EUR/USD which will then confirm that the greenback has made at least a short term bottom. Secondly, Gold might take on 983.2 support today on further pull back. Break of which will likely trigger more selling, which in turn support the greenback. Thirdly, DOW will probably sustain below 9700 level today which will provide support to the Japanese yen too. Source: ActionForex


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