The USD has come under further pressure over the last 18 hours after US economic reports have helped further diminish expectations for further near term interest rate increases by the Fed. The data shows tame inflation and an increasingly uncertain housing market which in turn will lessen price pressures in the US. In addition to the Fed continuing to pause there is now another factor beginning to weigh on the dollar and that is the pace of the slow down of the economy. Housing starts are down nearly 18 per cent from their highest level this year and yesterday the giant US consumer store, Wal-Mart, reported a fall in profits for the first time in 10 years. So we do expect this dollar to continue to weaken further, There is currently technical resistance for the Euro at $1.2860 which needs to be taken out but it looks like the new trading range is shaping up to be $1.2700 to $1.3200. FX Trend Trader
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