The dollar continues to fall

We open the week of November 18th, with what has become a familiar trend; the dollar continues to fall. The...

... greenback finished off trading on Friday down against most major currencies as credit and housing worries continue to haunt the US economy.

Figures from the Department of Treasury regarding International Capital, Balance of
Payments, and Industrial numbers hindered any hopes of the greenback gaining on its
progress from early last week. Instead, investors start the week offering the
greenback in bulk. Another hit to the dollar came this weekend as the Gulf
Cooperation Council, made up of the lion's share of the Gulf States, discussed the
possibility of revaluating their currencies away from the greenback. This has become
a developing trend as China leaked several hints that they were doing the same, not
too long ago.

The greenback this week will have to rely more heavily than usual on outside events,
as the shortened Holiday week holds little relevant news in the US economic
schedule. Tuesday will see the release of the FOMC meeting minutes which should
highlight any suspicion about if and when the Fed will intervene once again to
change the economic outlook of the dollar.

US Housing will look to be a notable subject this week with two statements set to be
released. Today at 18:00GMT, we will see the release of the National Association of
Home Builders Housing Market Index, ahead of Tuesday's Housing Starts numbers.

Other than that the Greenback is expected to remain under pressure, as more and more
nations lose faith in the currency that once represented the symbol of economical
robustness, and is now becoming less relevant on a global scale.

* EUR
The Euro ended trading last week in a consistent fashion, rallying late against the
greenback to stay above the 1.46 level. The Euro has become a mainstay in the global
economic world, as some see it as the world's new dominant currency. It seems as if
any gain from the greenback is not substantial enough to deter the overwhelming
strength that the 13 Nation currency has had lately. A quick peek to the week ahead
could see a slight dip in the Euro, most likely in the early parts of the week. This
however will likely be a short lived trend as the Euro has consistently rallied from
falling positions over the last several weeks. This trend has affected the
relationship between the GBP and the EUR as well, as gaps between the two European
currencies are slowly closing.

The G-20 Conference in South Africa this past weekend was surprisingly mum regarding
any serious change in currency policies. Leaders mentioned that the state of the
world's economic slowdown was "difficult to predict", helping not one bit in shoring
up investor concerns.

The week ahead sees little relevant news from the EU economic calendar. This week
will see a speech by ECB President Trichet at the Frankfurt European Banking
Congress on Friday. As the President normally spurs market volatility when he
speaks, this time should be a bit different as his words come late in the week on
Friday. The Euro should continue to progress slowly barring any surprising news
events as investors have come to see it as a strong and stable option when trading.

* JPY
The JPY once again benefited from slumping housing prices as investors shied away
from high-yielding assets funded by the JPY. The Japanese currency was up against 15
of the 16 major currencies to end Friday trading and looks to continue its forward
progress. The presumption is that the upcoming housing numbers from the US this
week, will continue to push the JPY forward. The focus on Japan at the G-20
Conference in South Africa was geared toward structural reform and fiscal
consolidation. The Japanese would ultimately like to contribute more positivity to
the JPY via local events as opposed to being reliant on outside factors. BoJ
Governor Fukui touched upon his concern revolving the rapid appreciation in recent
JPY numbers.

The Japanese economic calendar stays barren of any important news events, as the
Holiday week also corresponds with celebrations in Japan. It will be intriguing to
see how investor behavior develops in regards to carry trading; it is likely we will
see a boost in the JPY as the week begins.

Technical News
* EUR/USD
There is a very distinct triangle forming on the 4 hour chart which appears to be at
a key level before a breach. If a move towards the 1.4620 will occur, it will
probably validate a deeper bearish move into the 1.4570 zone.

* GBP/USD
The cable has been trying to massively correct the intensive bullish move, and is
now trading around 2.0530. The sharp bearish channel is in a high spot at the
moment, and together with a strong bearish cross on the slow stochastic, represents
a very good potential for a short position.

* USD/JPY
The pair is showing a very strong bearish momentum that appears to be overlooking
the normal price movement proportions, and is now trading at the impressive 110.50
level. The direction appears to be down, as both RSI and slow stochastic strengthen
the bearish notion.

* USD/CHF
After touching a base at 1.1155, the pair now consolidates a bit higher at 1.1170.
all oscillators show that the bearish momentum will probably continue, and that a
breach through the next key level of 1.1150 is quite imminent. If the key support
level will hold, we might see a correction back to the 1.1220 levels.

The Wild Card
* Crude Oil
After a failed attempt to breach through the 90.00 level, oil is showing a very
strong bullish comeback, and is steadily heading to the 95.00 level and beyond. This
is a great opportunity for
forex traders, to rejoin the strong trend in its new journey up.

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