EUR USD Showing Signs of Topping

The EUR USD failed in its attempt to break out over the June top at 1.4337 and drew enough selling pressure to close lower for the day. The subsequent closing price reversal top indicates that that selling may be greater than the buying at current levels. A break through 1.4130 will confirm the reversal top and could trigger a short-term correction to 1.4060 to 1.4016.

The EUR USD failed in its attempt to break out over the June top at 1.4337 and drew enough selling pressure to close lower for the day. The subsequent closing price reversal top indicates that that selling may be greater than the buying at current levels. A break through 1.4130 will confirm the reversal top and could trigger a short-term correction to 1.4060 to 1.4016.

The GBP USD is showing signs of a secondary top formation. A close under 1.6362 could help accelerate a move to the downside but this market will not turn bearish until 1.5982 is violated. Traders have been driving up this market because of increased demand for risky assets, but fundamentally the Pound remains weak.

Early morning stock market weakness and end-of-the-month repatriation of profits earned in foreign countries helped weaken the USD JPY. The main trend is up, but the current chart formation suggests only a break through 93.08 will turn the main trend down.

The USD CAD made a new low for the year but buyers quickly surfaced after the old bottom at 1.0783 was regained. The trading action on Tuesday indicates the buying may be greater than the selling at current levels. Lower equity markets and crude oil prices could help trigger the start of a short-covering rally.

The Australian Dollar made a new high for the year on a breakout over .8264. At times during the New York trading session, the Aussie looked as if it would close lower on the day, but a late session rally in the stock market prevented a daily closing price reversal top. Traders will be looking for a follow-through rally today, but will be hesitant to buy if equity markets begin to show signs of weakness.

The NZD USD posted a new high for the year. The follow-through rally was weak but this currency pair still managed to close higher for the day. Like the Australian Dollar this market will be watching equity markets closely. Any weakness in the stock market is likely to trigger a profit-taking break. The charts indicate that if selling pressure does begin that there is plenty of room on the downside. Based on the current rally from .6194 to .6633, look for the start of a possible break to .6413 to .6362.

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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