U.S. Dollar Mixed at Midsession

The U.S. Dollar is trading mixed at the midsession despite weakness in commodity and equity markets.

The U.S. Dollar is trading mixed at the midsession despite weakness in commodity and equity markets.

Early morning weakness in the U.S. equity markets triggered a break in the EUR USD but the inability to break the stock markets hard has triggered a short-covering rally in the Euro which has put it in a position to challenge the high for the week at 1.4447.

News that the Bank of England is considering putting a temporary halt on its asset buyback program is providing support for the GBP USD. Unexpected better results from U.K. Industrial Production and Home Prices Reports helped fuel a rally to a new high for the week.

The USD CAD confirmed yesterday’s closing price reversal bottom at 1.0630 but the follow-through rally was weak. The subsequent sell-off has put this currency pair in a position to test minor support at 1.0707 to 1.0782. A significant drop in the equity markets late in the session could put the USD CAD back on its upside path.

Weaker equity markets are encouraging AUD USD traders to take a little of the top after a significant rally. A lower close today by U.S. stock markets will form a reversal top which may trigger further weakness in the Aussie the rest of the week.

Less demand for higher yielding assets and technically overbought conditions are helping to put downside pressure on the NZD USD. A late session sell-off in the U.S. equity markets may trigger a further decline in the Kiwi into the close.

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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