The FOREX markets seem to love the US Dollar these days. I trade from a technical perspective – but I try to be aware of the principal fundamentals that drive (make that, should drive) the market for each currency pair I trade. One does not have to be a fundamentalist genius to wonder why the dollar is doing so well – it has to be that it is the least ugly of the choices. The Euro zone can’t seem to take three consecutive steps without one of them being a misstep – so the euro can’t find any sustainable love – and the euro is one of the major alternatives to the US Dollar (but keep an eye on the dark horse moving up on the outside, the Chinese renminbi (yuan).

The market’s interpretation of fundamental data makes me proud to me a technical trader. If there ever was a case for short term technical trading, today’s FOREX markets are truly a prime example – that’s why I like to take a little profit here and there during the day – and sleep well at night. Not only is it impossible to know what fundamental event is going to unexpectedly happen next – knowing how the market will react to it is even harder! Deep down I think that a crisis is brewing in the world currency markets – and it will lead to a Tsunami of problems of epic proportion. Of course I have no idea when all of that will occur. That is why I try to stay abreast of important fundamentals for each market I trade – and for FOREX that means reading the Daily Pfenning – if you do not already subscribe, you should do so immediately. Chuck Butler’s daily take on the FOREX markets is a must read for any serious FOREX trader – and believe it or not – it’s free!