U.S. Dollar Rally Currently Battling Stiff Resistance
By Eric Parnell:A variety of fundamental factors are supportive of a continued rally in the U.S. dollar over the near-term. However, further gains are likely to remain on hold until it can work through currently stiff technical resistance.In a recent post on Wednesday I outlined several fundamental factors that have the potential to propel the U.S. dollar higher in the coming months. These included the following:
- Euro Crisis - As the sustainability of the euro currency comes under threat as the European sovereign debt crisis continues to unfold, the U.S. dollar stands to benefit. Nearly 60% of the direction of the dollar is determined by the euro.
- Safe Haven Status - Despite its fiscal and monetary challenges, the United States and its dollar currency remains a safe haven destination for investors. This was still true both during the 2008 crisis as well as during the uncertainty following the end of QE1.