Greenback Headed Lower?

Over the past 48 hours, the U.S. dollar has come under aggressive selling pressure and I think USD/JPY is set to test its year to date low below 87. Here is a chart of the Dollar Index that shows a break of a major trendline which suggests that the dollar’s weakness will not be limited to just the Yen. I meant to post this yesterday but got caught in FX360 work. Sorry!

U.S. fundamentals have taken a turn for the worse with retail sales falling short of expectations, manufacturing activity slowing and producer prices falling. Even the Fed who normally prefers to assure investors has turned pessimistic! This means that not only will the U.S. central bank leave rates on hold for the remainder of the year, but in the context of improving economic data and successful bond auctions in Europe, fundamentals have made the dollar has attractive.

As a result, I think that USD/JPY is headed for at least 87.00.

About Kathy Lien 236 Articles

Kathy Lien is an Internationally Published Author and Chief Strategist of, one of the world’s most popular online websites for currency research. Her trading books include the highly acclaimed, Day Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings (2005, Wiley); High Probability Trading Setups for the Currency Market E-Book (2006, Investopedia); and Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game (2007, Wiley). As Chief Currency Strategist at FXCM, Kathy is responsible for providing research and analysis for DailyFX, the research arm of FXCM. She also co-edits the BK Forex Advisor, an Premium Service with Boris Schlossberg – one of the few investment advisory letters focusing strictly on the 2 Trillion/day FX market.

Kathy is also one of the authors of Investopedia’s Forex Education section and has written for, the Asia Times Online, Stocks & Commodities Magazine, MarketWatch, ActiveTrader Magazine, Currency Trader, Futures Magazine and SFO. She is frequently quoted by Bloomberg, Reuters, the Wall street Journal, and the International Herald Tribune and has appeared on CNN, CNBC, CBS and Bloomberg Radio. She has also hosted trader chats on EliteTrader, eSignal and FXStreet, sharing her expertise in both technical and fundamental analysis.

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