Financial spread betting weekly update 14th February 2011

This week’s financial spread betting update is now available and can be read by clicking here.

So far this morning the dollar has continued to gain, pushing the Euro back down through the $1.35 support area that we have been writing about for some time. We may now see the Euro move down further towards the $1.32 area and this will lead to a test of and likely break through resistance on the dollar index around 7900. The next resistance area on the dollar index is around the 8000 level. As we have written before many times, the dollar has been so beaten up of late that it is only a matter of time until we get a bounce higher for the dollar. As to whether this actually leads to a substantial rally and change of long term trend remains to be seen.

It will also be interesting to see what impact such a rally may have on other markets, with stocks and commodities generally enjoying an inverse relationship with the dollar. This has translated of late to a weaker dollar equaling higher commodity and stock prices. At the same time, we have also seen higher yields on Treasury Bonds and notes in the US and this normally favours a stronger dollar. This could lead to a reversal of trends in several markets and sectors at some point this year. Whatever happens, this could lead to some decent moves in many markets, which will be ideal from a trend following perspective.

This week’s financial spread betting update begins with:

Both stocks and the US dollar have moved higher over the past week with stocks in particular looking bullish and reaching new multi-year highs in the process. The long term trend still clearly bullish as it is for most commodity markets. The trend is still down for the dollar but seems to be improving slightly in the short term……continue reading by clicking here

Good trading

Phil Seaton

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