Expect US Dollar To Rise Higher In The Coming Weeks

The press conference after the FOMC Meeting yesterday in which Janet Yellen the new FED Chairman hinted that US interest rates can be raised in the coming six months made US Dollar soar 1% higher against the Japanese Yen and Euro. Market analyst think that this maybe the start of a US Dollar bull rally as economic data being released point to a strong recovery in the US economy. Strong recovery requires that FED increase the interest rates. Watch the CNBC video below in which Dominic Bunning, FX Strategist at HSBC, believes that the U.S. should see better economic data going forward, which will lift the greenback.

If the US Dollar gets strong in the coming weeks, then we should expect a downtrend in USD pairs like EUR/USD, GBP/USD, AUD/USD, NZD/USD etc while at the same time a strong uptrend in USD/JPY. Taking a look at the charts show that indeed this is the case and bearish divergence is already showing on D1 and W1 timeframes on EUR/USD and GBP/USD while a bullish divergence is forming on USD/JPY. As a trader we always recommend that you keep an eye on the market fundamentals because it is the market fundamentals that make the different bullish and bearish patterns to form on the charts. Perhaps the US Dollar rally is already underway with no sign of correction yet.