US Dollar Hits Key Resistance - Nearing a Turning Point?

Written by Terri Belkas, Currency Strategist

The outlook for the greenback for the next few weeks may hinge upon whether or not the drop signals a reversal or ultimately yields a break higher. Looking ahead to this coming week, there will be a handful of events that US dollar traders will need to watch as increased volatility could trigger sharp moves in the currency.

The US dollar ended the week mostly higher, despite big losses on Friday, as the DXY Index pulled back from resistance at the 2008 highs. The outlook for the greenback for the next few weeks may hinge upon whether or not the drop signals a reversal or ultimately yields a break higher. Looking ahead to this coming week, there will be a handful of events that US dollar traders will need to watch as increased volatility could trigger sharp moves in the currency.

On February 24 at 10:00 ET, the Conference Board’s consumer confidence index for the month of February is forecasted to reach a fresh record low of 36.0, down from 37.7. With record keeping having begun in 1967, the plunge in sentiment makes the extent of the recession even more clear. However, with Federal Reserve Chairman Ben Bernanke due to testify before the Senate on the economic and Fed policy at the same time, the consumer confidence result may have little impact on the markets. Instead, traders will be listening closely for more detailed outlooks on growth, unemployment, inflation, and the financial markets. Bearish commentary could weigh heavily on risk appetite, and as a result it will be important to keep an eye on the link between the currency markets and stocks, as the US dollar hasn’t been responding as strongly to shifts in equities but could still benefit from flight-to-quality.

On February 26 at 8:30 ET, signs that domestic demand is showing no sign of recovery should continue to emerge as US Durable Goods Orders are forecasted to have dropped 2.3 percent and even excluding transportation is anticipated to fall 2.0 percent. All told, this would mark the sixth straight month in which the headline reading failed to rise, and while this will have the most impact on forex trading, the markets should keep an eye on non-defense capital goods orders excluding aircraft, as this number serves as a leading indicator for business investment.

Finally, on February 27 at 08:30 ET, the preliminary reading of Q4 GDP for the US is forecasted to be revised even lower after initial estimates showed the index down 3.5 percent. The latest results may show a sharp 5.4 percent contraction, which would still be the worst since Q1 1982. The National Bureau of Economic Research (NBER) has already declared that the US has been in recession since December 2007, but a plunge in GDP in line with expectations will only suggest that the contraction in growth will continue to be worse than previously expected.

Use and distribution of this article is subject to our Publisher Guidelines whereby the original author's information and copyright must be included.

It is not really surprising to see the Forex trading market emerge as a leader in the world trade scenario. The response to these markets has been overwhelming with popularity touching the sky. Forex trading is the premier way to earn extra bucks in today's world. So it is just Forex all investors are looking up to now.

Forex trading is taking over stock trading which was perhaps the most preferred form of investment until a few years back. Stock and other related commodities are becoming more difficult to trade because of a very unstable economy at the present moment.

The Forex market is characterized by its steadiness and has thus risen to become the most sought after trading business among all investors. Moreover, forex is a market where you can earn profit both with price increase and decrease.

Forex trading is about trading one currency against another to make profit. The market is highly liquid as the currencies can be traded very quickly and you can earn huge profits within a short period of time. Moreover, the Forex market being operative 24 hours of the day traders are at an advantageous position to trade at whichever time is convenient for them from Sunday evening till Friday evening.

Online Forex trading facilitates a beginner to operate with a demo account and can continue to do so until he/she has gained some experience in the business.

Doing so the investor need not worry about incurring any losses as the trade is carried out with virtual money. The investor can also learn the details of Forex trading and after gaining confidence can graduate to open a standard or a mini account.

Online Forex market is coming up as a safer investment option compared to the stock trading business. It involves much lesser initial cost and you can start with a very nominal amount. Forex trading is also likely to bring in a steady income for every dollar you invest.

There is no commission too for online trading. Hence, every individual can be a part of this business and aim to make some extra money. That's not all. Many people have succeeded in such a way that they have given up their full time jobs for Forex trading!

So, Forex is undoubtedly the most profitable business to put your money on. In a volatile economy like ours under the prevailing circumstances, going with Forex trading is certainly the call of the day.

Forex Day Trading vs. Forex Swing Trading by James Smith

You heard all the stories about the millions of dollars that you can make by day trading the forex markets, how it's easier to make money with forex because it trends much better than stocks and there is more liquidity with over $7 Trillion dollars traded a day. You've seen the advertisements asking you to sign up for a broker with only $25 to start and your imagination begins running wild about

The truth is that the foreign exchange markets are a traders dream in the same way that Las Vegas can be a gamblers dream. It's open 24 hours 6 days a week, so there's always action and there's always a trade that can be made. But just like Las Vegas it can quickly turn into a nightmare.

The truth of the matter is that it is difficult making money in forex and it is even more difficult making money consistently by day trading the forex markets. The reason being that most people cannot think quickly and calmly enough to make the split second decisions needed to be successful at day trading. In his book Blink, Malcolm Gladwell details a computer generated war simulation competition set up between day traders and battle field generals. Surprisingly the day traders faired quite well against the battle-hardened soldiers at making split-second decisions that could cost thousands of simulated soldiers their digital lives. If you regard your trading capital as your soldiers and the goal is to go out and capture the enemy soldiers or other people's capital, then the analogy is a pretty good one. Not surprisingly the two groups got along quite well with one another after testing their mettle on the digital battlefields. What they found is that to be successful in either profession required a similar set of skills, namely being able to make split second decisions, the ability to take in and process lots of information at one time and disregard extraneous unimportant information, and obviously the ability to deal with pressure calmly and cooly. Most people lack these requisite skills to be successful as day traders.

Swing trading is a much easier and less stressful way to get into the markets, and you won't even have to sit in front of your computer screen for hours at a time watching indicators and squiggly lines. It's a gentler pace in which the trader can set limit, or stop orders and wait for the markets to come to them. In addition instead of having to make decisions at such a frenetic pace a swing trader can be more thoughtful and deliberate in the process.

There is money to be made in the forex markets, but it is not for everyone. If you are going to tempt these treacherous waters there are a few things that you should know first-

1.Have a well thought out trading plan, preferably one that has been back tested and has some statistical significance. 2.Make sure to use stop losses and you should also use a trailing stop loss 3.Don't use the rent money to trade with, or other money that you need to pay the bills. If you do then you will always make bad decisions.

If you'd like to find out more about forex trading and sign up to receive free trading signals please click on the link in resource box below.