The greenback is still gaining ground, will it continue?

[RTFX-Trading]

The greenback stretched its gain in Asian session today as oil and gold prices slipped lower. The global economy heading to a steep slowdown fuelled more concerns and urges the selling of the Euro and other higher yielding currencies.

EUR/USD slipped to 1.4815 as ECB’s Executive Board Member, Lorenzo Bini Smaghi, was interviewed by an Italian newspaper on Tuesday. He said that the Euro zone’s economic growth is slowing down faster than what ECB has forecast. He also said that a “phase of protracted weakness” may be seen in the coming quarters.

Technically EUR/USD is way oversold, but some says that the downtrend is still intact based on the expectation that the growth outside of the US continue to worsen. The market stays cautious of any rebound in oil or commodity prices which may cause some reversal from the recent USD gains.

Moving on to more recent news. The USD reacted slightly to a positive trade deficit. Trading against EUR from around 1.4922 just before the report to around 1.4900 just after, then EUR moved up to 1.4964. This could suggest that the USD is reaching the top. US International trade came out -56.77 billion against a previous of -59.79 billion and a forecast of -61.50 billion. EUR/USD is trading at around 1.4940 now.