Fundamentally the Dollar is set to rally to 12,240 - 12,250 following an upward revision in 1st quarter GDP data and the build-up to the June FOMC meeting in which the Fed is expected to raise rates by 25bp in line with the three rate hike forecast since December. The final hurdle to cross is the June NFP due this coming Friday - in which only a strongly disappointing report can derail this plan. Strongly disappointing in this context would have to show less than March job growth, with its low number of 98k. Inflation remains on course according to the Fed, and fears that they are falling behind the curve will sustain pressure on the FOMC to hike the Fed Funds rate. Technically the FXCM USDOLLAR has been locked in a falling wedge pattern since December and the reversal from Mondays low has reconfirmed the lower trendline. As the falling wedge approaches narrowing convergence; the FXCM USDOLLAR is facing an imminent breakout during the second quarter - with fundamentals poi...
Profit taking following a strong Euro rally as the market factored in Euro Zone resilience; along with a stronger US-DOLLAR will see the EURUSD correct to the downside in the short term with key support at 1.0900 levels. Overall Euro strength remains on deck in the medium term as the ECB is looking forward to possible tapering, along with a US-Dollar low which could see the EURUSD rally to 1.1400 - 1.1500 levels. These levels will not sustain, in the wake of German elections especially if the US-Dollar forms lows during June - July.