Forex Technical & Fundamental Analysis Recap

The EUR USD tried to follow-through to the upside following yesterday’s closing price reversal bottom. The reversal was confirmed overnight and for most of the day session this currency pair traded higher. A stable equity market helped maintain a steady market but late in the day a collapse in the equity markets sent traders out of higher risk assets, causing the EUR USD to fall.

The EUR USD tried to follow-through to the upside following yesterday’s closing price reversal bottom. The reversal was confirmed overnight and for most of the day session this currency pair traded higher. A stable equity market helped maintain a steady market but late in the day a collapse in the equity markets sent traders out of higher risk assets, causing the EUR USD to fall.

The technical pattern is suggesting more downside to follow. The series of lower-tops and lower-bottoms the past month are strong indications of an impending top. Breaking an up trending Gann Angle from the April low at 1.2884 is also a sign that the selling is greater than the buying at current levels.

Falling crude oil and equity prices helped erase early session losses in the USD CAD. Traders are becoming more risk averse and selling commodity related currency markets. Talk of another stimulus plan by the U.S. is sending a signal to traders that the economy may be weaker than previously thought. Traders are beginning to wonder if the Bank of Canada is going to try to take action to stimulate the economy.

The GBP USD continued its decline following a top last week at 1.6743. The trend has turned down which means more downside pressure is likely. The next target is a low from June at 1.5801. Traders have to be careful selling this market too low because the current pattern suggests there may be one more rally to test the top before another leg to the downside begins.

Fundamentally traders are nervous the Bank of England is going to increase its amount of quantitative easing. This means the central bank may be planning to flood the market with cash which would weaken the currency. The break this week can be attributed to traders taking defensive positions ahead of the BoE’s next meeting later this week.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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