Forex Bull

US Dollar: Will Thin Liquidity Leverage or Thwart the Dollar’s Rally? Euro Forecast Bearish on Sharp Shift in Forex Sentiment Japanese Yen to Fall Against US Dollar on Bond Yields Outlook British Pound Breaks Out Ahead of BoE Minutes, Final 3Q GDP Report Swiss Franc Vulnerable To SNB Intervention With Euro Weakness Canadian Dollar Risks to Downside Ahead of Retail Sales Data Australian Dollar to Decline as Rate Hike Outlook Fades New Zealand Dollar To Hold Range Ahead of 3Q GDP

Australian Dollar to Decline as Rate Hike Outlook Fades Fundamental Forecast for Australian Dollar: Bearish – Australian Dollar Drops as Disappointing GDP Weighs on Rates Outlook – Meeting Minutes Show RBA May Pause Interest Rate Hikes in February The Australian Dollar may continue to decline as the seemingly resilient economy betrays signs of weakness and the central bank’s rhetoric turns limp, hinting that interest rate hikes may be off the table for the months ahead.

British Pound Breaks Out Ahead of BoE Minutes, Final 3Q GDP Report Fundamental Forecast for British Pound: Neutral – Retail Spending Contracts in November – U.K. Labor Conditions Unexpectedly Improve – Public Sector Borrowing Rises at Record Pace – U.K.

New Zealand Dollar To Hold Range Ahead of 3Q GDP Fundamental Forecast for New Zealand Dollar: Neutral – New Zealand Services Expands the Most Since November 2007 – Business Confidence Weakens For Second Month – Underlying Risk Appetite Has Yet to Break The New Zealand Dollar tumbled lower this week, but continued to maintain the broad range carried through from the end of November, and the high-yielding currency is likely to face increased volatility following the 3Q GDP report due out on Tuesday as economists forecast the $128 economy to expand at a faster pace in the second-half of 2009.

Swiss Franc Vulnerable To SNB Intervention With Euro Weakness Fundamental Forecast for Swiss Franc: Bearish – SECO Raises Its Growth Forecast to 0.7% from 0.4% fro 2010 – Industrial Production Improves by 3.4% for Consecutive Quarter – Swiss Franc Technical Outlook The Swiss franc continued to lose ground against the greenback with the USD/CHF reaching above 1.0500 for the first time since September 8th.

Japanese Yen to Fall Against US Dollar on Bond Yields Outlook Fundamental Forecast for Japanese Yen: Bearish – Bank of Japan Strikes Dovish Tone, Keeps Policy Unchanged – Japanese Firms Plan Record Spending Cuts in the Fourth Quarter

The EURUSD has another bearish week, bottomed at 1.4260 yesterday. My bearish target at 1.4250 is considered reached. Although technical view remains bearish and I don’t see any significant bullish correction signal so far, I think it’s time to think about the possibility of an upside correction in the upcoming week

Stocks should trade quietly as investors sit out until the start of the new year. Economic reports on home sales, jobs and manufactured goods in the holiday-shortened week are coming—and everyone will be watching retail sales.

Discussing where the dollar is headed, with Zachary Karabell, River Twice Research; Marc Chandler, Brown Brothers Harriman and Steve Moore, Wall Street Journal Editorial Board.

The dollar ended Friday flat against the euro after rallying to a three-month high on Thursday.