The US Dollar (ticker: USDOLLAR) has rallied as the Dow Jones Industrial Average has fallen sharply following the re-election of the US President. Can this Dollar rally and Dow sell-off last?
Prosthat favor a US Dollar rally and Dow Jones sell-off:
Investors sell risky assets as they brace for Fiscal Cliff difficulties in Q4
Growth fears in Europe could keep pressure on Euro/US Dollar, European equities
We can’t ignore risks that this could be the start of a long-awaited EURUSD correction, however, and we see two key reasons for which this could be the start of a larger US Dollar bounce.
Consagainst continued US Dollar strength and selling EURUSD weakness:
USDOLLAR failure at key resistance could put Dollar rally at risk
The Euro/US Dollar trades near critical support and could bounce
Dow Jones FXCM Dollar Index Nears Critical 10000 Mark as Dow Jones Industrials Tumble
Source: FXCM Trading Station Desktop
It will be critical to watch the USDOLLAR’s next moves as markets react to clear uncertainty following the US Presidential elections.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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