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Originally Posted by ahefner33
Hey. So you say that traders realize that there will not be a rate cut, strengthening the dollar, but what about the ones that still speculate that there will be rate cuts, weakening the dollar? Would this cause most Dollar pairs to range? Thanks again. Reps.
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Yeah so in this tug a war of bulls and bears, when the USD bulls and the Bears become less sure of USD weekness, then the bulls start to win the moment by moment to day to day tug o war. The currencies with the higher interest rates, like AUD and NZD will continue to drag the USD bulls through the mud until they wave the white flag, others like the EUR are somewhat expected to raise rates, the GBP has the same rate as ours but has numbers to show that inflation may be a problem, but in general the USA is still expected to lower their rates, all the reports that are interesting to financial market geeks like ourselves are part of answering the question of whether or not the USA will raise their rates.
The JPY has a mind of its own with the USD, I get so confused with the USDJPY pair cause that is the only thing the USD is showing strength against. But JPY bulls are routinely losing their tug o war against everyone else because they have the lowest interest rates of anybody at .5%
Probably the best indicator for indicating a range or a trend is the ADX indicator, anything over 25+ and increasing indicates a trend and anything below 25 and decreasing shows a range.
My two favorite books on Forex so far is Day Trading the Currency Market and Technical Analysis for Dummies.
Bloombergs currency section always has good stuff on fundamentals, also check out the commodities and bonds section cause that also may indicate whether or not more fans will pull the tug o war rope for the USD or not.