Market bullish - Forex Traders buy Dollars

AS  Well Fargo Mortgage bank report restored confidence in US banking sector, the Forex traders started buying US Dollar across the board in the major pairs as better-than-expected earnings. As the trend was set in motion, Dollar is expected to receive a boost across US economy. There was a follow through break in this complex was seen when crude oil inventories rose above the expected estimates.

At this time there is no bottoms in the EUR/USD appear to be threatened since the shift in sentiment attracted forex traders to the Dollar this has still been seen has the appearance of a retrenchment. Down trend is expected only when the Euro starts making lower tops and lower bottoms. We can expect this break to continue at least 1.5825 to 1.5774 before stopping based on the current trend pattern. In order to test the key to this market turning bearish is going to be the secondary rally to test the 1.6038 all-time high. Market is topping then the test will fail. Supporting the potential failure and the first sign of a major top are the driving out factors of the bearish fundamentals out of the Euro Zone. ECB’s  interest rate hike are the factors for stifling growth on High energy and food prices. It is also witnessed that the economic reports are finally starting to indicate that global growth slowing down is also going to impact the Euro Zone countries.

In the other corner there was a news that the Fed Minutes reiterated that the recent statements by Bernanke and other Fed members that the Fed is great dilemma in supporting growth at one side and accelerating inflation on the otherside. This sign is expected to unchanged interest rates over the rest of the year. The CPI raise in June from 0.6 percent to 1.1 percent was the biggest increase since 2005. This news was already factored into market is one of the reason to rejoice.

Countering market trend

Before initiating a counter trend short be careful shorting too close to 1,5825 as a test of this price may attract new buying. Be patient and wait for a test until 1.6038 top. The entire trading community and the Wall Street rejoiced over the bullish news from Wells Fargo Mortgage bank as this stock arrested  the recent downtrend and rallied up to 20%.  The positive change in this stock spread throughout the Financial sector supporting the S&P 500 and Dow Jones Average produce a remarkable gain on the day. This notable positive rally in the stock indices took pressure out of traders who had been taking hard losses in the recent days.

The above event of positive market shift scenario reposed confidence in the Forex Traders community. Hence it enabled them to take a risk of procuring Dollars for their future trade activities.