U.S. Dollar Exposed to Year-End Profit-Taking
The U.S. Dollar fell overnight as traders took advantage of the thin, holiday trading by taking profits after the almost month-long rally. Demand for higher yielding assets also contributed to the weakness for the second day in a row buoyed by a rise in global equity markets. Finally, some of the selling pressure can be attributed to concerns over rising debt in the U.S.
Losses may be limited in the Dollar today due to the thin trading conditions and the release of a pair of positive economic reports. Investors expect today’s S&P/Case-Shiller October Index of Home Prices and Conference Board confidence report to reaffirm the turnaround in the economy.
The developing chart pattern suggests that the Dollar is vulnerable to a substantial correction before fresh buying resurfaces.
