US Dollar Sustaining its levels

with the help of . . . " GOLD "

The US Dollar Index is sustaining its price levels above the important key price of 78.50 mid-range support as it opened with a gap at 79.00 from the closing price of 78.88 last 14th of August 2009. Although, it may not be too significant opening the momentum for the dollar gained as Gold prices went to a Low of USD 929.10/ troy oz. as of this week ending the 21th of August 2009.

The Gold prices are experiencing some hedge liquidation as inventors are considering taking some of the average profits what's left of the previous quarter's and weeks trading that saw the prices went to as high as 971.55 registered two weeks ago dated the 6 th of August 2009. Which most analyst have predicted to breach the USS 1,000.00 levels as the US dollar continued to deteriorate to the low price of 77.30 US Dollar index.

In spite of the lower than expected consumer confidence report the US Dollar has been resilient of the negative report as it is within the 3rd quarter of the year corrective movement from its low price of 77.30 and the corresponding price for the Japanese Yen at the 91.50 low price levels.

As the stock market moved lower in most of the major stock exchanges due to the trend following sentiments that the recovery may not sustain due to consumers not totally convinced and are unwilling to spend at this time. This sentiment had spilled over to corporate earnings which may dampen growth in moving forward.

However, in Asia the Japanese Yen has been experiencing some " Carry Trades " which has subsequently increased the past few weeks as most investors have started increasing their carry trades as they have been expecting some steadier interest increase from hereunto the end of the year. Although, there really is no real support at this time. It is more a speculative move than anything else.

As the GBP/USD and the EUR/USD have shown their continued correction as both majors are trying to find a significant bottom to consolidate making prices stable for the next turn. The recent report on the GDP on Germany and France have left the Euro more favorable for the fundamental reports. However, volumes and open interest have not shown any improvement at this time. The overall bias on the bull side of the European currencies have significantly died down for the time being as traders are reluctant to take new long positions with a diminishing volume and open interest. And this also goes the same with the Aussie and the Kiwi as the pairs has had their days numbered from liquidation and profit taking from their recent rally.

For now consider watching the market's behavior for any unexpected movements that may trigger sudden changes in the price direction. As we have mentioned before that this Elliot Wave formation may take a longer period as most short term traders would not want to see.

Try looking at the GOLD prices and figure out whether the continuation of the down turn still has room to move even lower than the 925.50 levels. It all depends on the strength of the US Dollar if increase in VOI will prove to be a pressure for the precious metal.

Good Luck and Happy Trading!