U.S. Dollar Mixed at Midsession in Volatile Trade

The U.S. Dollar is trading mixed at the midsession following a morning that featured the most volatile trading of the week.

The U.S. Dollar is trading mixed at the midsession following a morning that featured the most volatile trading of the week. News that the recession eased in the U.S. was not enough to support the Dollar across the board this morning. The markets are also reacting to reports that FDIC reserves are reaching low levels or may be depleted are raising concerns about banking deposit position. Finally a sharp drop in equity prices is leading investors to question whether this is the beginning of another round of aversion to risky assets or an opportunity to buy.

The EUR USD is trading in a tight range but slowing mounting a comeback. News that the U.S. GDP was better than estimated was not enough to encourage traders to buy the Dollar.

The GBP USD remains under pressure. Traders still feel the British Pound will lack both the U.S. and the Euro Zone during the global economic recovery.

The USD CAD is under pressure despite the weaker energy and equity markets. A flat GDP and reports of possible banking problems could be the catalyst behind the weakness.

The Dollar is also losing ground versus the Swiss Franc. Although the USD CHF has traded inside of a tight range for months, it does seem poised to break out at anytime. Concerns over U.S. banking issues could be the driving force behind the strength in the Swiss Franc.

The USD JPY is trading lower at the midsession. Weakness in the U.S. stock markets is triggering repatriation as Japanese investors try to avoid a risk and a possible sell-off in equities.

Despite the sharp drop in U.S. equity markets, the AUD USD and NZD USD are mounting strong gains at the midsession. News that Australian business investment unexpectedly rose in the second quarter is another sign that the economic recovery is strengthening. Traders had been expecting a sell-off today with stock market weakness because of the return of risk aversion.

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