* Dollar Extends Longest Tumble in a Year, Conviction Still Lacking
* Euro Struggles but Doesn't Falter Under Unflattering Growth, Bailout News
* Canadian Dollar Traders Ready for BoC Decision with USDCAD Just Above Parity
* British Pound Maintains its Bearings Despite BoE Weale's Warning of Recession
* New Zealand Dollar Slides after 3Q CPI Data Eases More Aggressively Than Expected
* Australian Dollar Follows S&P 500 with Critical Break; but Follow Through Struggling
* Gold: One of the Few Advances that Can Continue if Early Expectations Fall Apart
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Written by: John Kicklighter, Senior Currency Strategist
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| Dollar Extends Longest Tumble in a Year, Conviction Still Lacking |
| The markets left us with a cliff hanger Friday as the S&P 500 overtook resistance and EURUSD positioned itself for a meaningful bullish break of its own. As speculators take up the reins for a new trading week, we see that risk appetite has maintained its bullish bias. Yet we are still lacking for the kind of conviction that would normally be associated with the development of a new trend. Besides the fundamental headwinds that keep risk under a fragile peace and tell us that rates of return will be anemic well into 2012; perhaps the most disturbing disconnect in the capital market's advance is the lack of volume. The development of a new trend should theoretically draw significant, new participation in that naturally accelerates and maintains the drive. However, when we check volume on S&P 500 or Australian dollar futures; we notice that participation has actually decreased as price action increases. This isn't a technical divergence, it's a fundamental one... |
Best regards,
DailyFX Research Team
research@dailyfx.com |
19:11
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