$$$ Dollar – Breakout or Breakdown Nearly Inevitable on FOMC, GDP

 21 April 2012 00: 44 GMT 

 

fundamental forecasts for the US Dollar: neutral

The US Dollar (ticker: USDOLLAR) refused to break under resistance key or support important for another trading week as financial markets remain as undecided than ever. US Federal Open Market Committee (FOMC next week) can be particularly moving the market as traders look for clarity. The new monetary policy action, however, seems unlikely, and it can take a substantial change in the rhetoric of the Fed to push the dollar above its recent commercial range against the Euro and other major counterparts.

Disappointments in recent economic data U.S. the stage for a FOMC set more moderate rate of Wednesday the decision and leave risks to the decline of the dollar. But economists predict data on growth gross domestic product US end week will show robust us growth through Q1 and can provide support for the dollar.

However, it feels like we've been here before: major economic data on the folder and a surprise could theoretically force a discussion USDOLLAR or rupture. Time will tell whether or not we see actually these large jumps.

All eyes turn to the Federal Reserve as the FOMC announced a rate. New interest rate moves is extremely unlikely, but for the Fed will issue guidance on future economic conditions and their internal predictions for rate moves in the future. Non-agricultural mass pay recent weakness and us initial Jobless Claims figures could lead to more moderate forecasts. In addition, speculation remains rampant that slower job growth could push the Fed to adopt political accommodation through Quantitative Easing (there). It goes without saying that advice at low rates of interest or there could force losses of US Dollar.

The greenback could see volatility on growth of GDP for the first quarter Friday, and lofty expectations indicate risks remain downward on the increase in the probability of disappointment. Economists predict that weather favorable to the United States and better than expected, the area performance Euro has made strong economic growth in the first three months of the year. Indeed, robust national economic data supports these predictions. Optimism may limit the reactions of high price of higher growth than expected, while that disappointment could sink the U.S. dollar.

Then where we see resolution? If anything, it feels like global risks remain to the downside that Dow Jones FXCM Dollar index remains dangerously close to the substantial support, and financial markets remain fickle as traders seek direction in all areas. It is quite possible that a USDOLLAR escape could be a more major change for stocks and other asset classes. Our technique of strategist warns that the USDOLLAR is wrapped to the extreme. In other words, the next stage of the dollar could be large. What direction is anyone's guess, but we will keep a close eye on the main events of the upcoming week and their effects on the main pairs USD. -DR