U.S. Manufacturing Hints at Better Times Ahead

A better than expected U.S. manufacturing report, possible global expansion and an hike in construction spending is helping to increase demand for higher yielding assets at the mid-session.

A better than expected U.S. manufacturing report, possible global expansion and an hike in construction spending is helping to increase demand for higher yielding assets at the mid-session.

U.S. traders woke up to reports out of Europe and Asia of an improving economic picture buoyed by bullish manufacturing reports out of China, the Euro Zone and of all places the U.K.

These reports sent a message that the global economy may have bottomed and is now in a position to recover. Traders almost immediately began selling the U.S. Dollar in a resumption of the trend which started late last week.

One of the biggest movers was the GBP USD which continued its breakout rally and is now in a position to test a major long-term retracement level at 1.6644.

The EUR USD also broke out above the June top at 1.4337. The next upside target is a .618 retracement of the 52 week range at 1.4622.

The USD CAD continues to feel selling pressure. Stronger crude oil prices and the surge in the stock market are helping to boost the Canadian Dollar. This rally is likely to continue unless the Bank of Canada begins to object to the rapid rise in price.

The rise in equity markets is helping to support the USD JPY. Appetite for higher risk assets is up as traders gain confidence in a global economic recovery.

Demand for higher yielding assets is driving the AUD USD higher. This market crossed a key long-term retracement price at .8382. Holding above this price will indicate higher markets to follow.

The NZD USD has recovered nicely following last week’s short-term sell-off. This currency pair crossed a key long-term 50% price at .6553 today. This price must hold as support in order to support a rally to the next retracement level at .6945.

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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