U.S. Dollar Forex Trading Forecast: More Weakness in the Near Term

U.S. Dollar Forex Trading Forecast: More Weakness in the Near Term

Currency trading with the greenback

The U.S. dollar forex trading forecast, for the short term, is likely to see more weakness. Indeed, there are a number of factors likely to affect the greenback in currency trading during the near term. Action Forex offers 5 items undermining the U.S. dollar in forex trading:

1. Concerns about the U.S. debt ceiling, and a downgrade of the sovereign debt rating.

2. Rally of risk is pressuring the dollar as forex traders no longer feel the need for a safe haven.

3. Possible rate hike from the ECB could further pressure the U.S. dollar as forex traders look for higher yields.

4. The long holiday weekend in the U.S. could mean that assets flow elsewhere.

5. Technical analysis currently favors the euro in forex trading.

And, of course, there are long term considerations as well. The U.S. dollar is vulnerable as scrutiny will turn from Greece after the austerity vote guarantees another bailout. Now, focus will be on the U.S. and its debt problems, and that means that the dollar will be under pressure in the future.