US dollar has been in demand for last many trading sessions led by the strong economic growth in US, the data that were released last week were full of positive surprises. Non-farming payroll added about 175k (approx.) jobs, which was much better than expected number, also consumer confidence in the US economy has increased. Here are some of the reasons why I am seeing USD to be bullish:
- Hurricane Sandy: If you go back to the history of US there has always been disastrous hurricanes, in 2005 when hurricane Katrina has affected the country, USD at that time appreciated for 3 continuous months.
- GDP Growth: We have seen good GDP numbers last week and they were also surprising, strong growth was seen. I am expecting the growth to continue as Hurricane will be generating more jobs in the medium term, hence growth to continue.
- Technical Support zone: Charts are suggesting USD index has formed a double bottom pattern on daily time frame, which is mostly considered as bullish pattern.
- US President Election: It will be done on 6th November and we are expecting this will also be one of the reason to be long/bullish on USD. As at the time of elections, parties focus more on progress and job creation, hence strengthen the confidence in economy.
So a forex trader must be long on dollar against the weak currencies like Canadian dollar, Swiss franc, etc. Did you like this article, join us on Facebook and Twitter or subscribe to our Free SMS List. Article published on 4 November 2012.