U.S. Dollar to Open Mixed Against Majors

The U.S. Dollar is expected to open mixed this morning. The Greenback is showing weakness versus the major European currencies and weakness against Asian-Pacific markets.

The U.S. Dollar is expected to open mixed this morning. The Greenback is showing weakness versus the major European currencies and weakness against Asian-Pacific markets.

The Dollar is showing strength mainly because oversold conditions and economic uncertainty have encouraged investors to lighten up on their positions in higher yielding currencies and curtail fresh demand.

The G-20 wrapped up its meeting this weekend by agreeing to give emerging markets more influence at the International Monetary Fund and the World Bank. Look for the roles of the emerging markets to increase once the global economy begins to recover. This could help lay down the foundation for a diminished role for the U.S. Dollar as the world’s reserve currency.

Technical factors are helping to weaken the EUR USD overnight. Last week’s close formed a weekly closing price reversal that was confirmed overnight. This formation often leads to the start of a 2 – 3 week correction.

The GBP USD is still reeling from the negative comments from Bank of England Governor Mervyn King. Late last week, King stated his opinion that he preferred a weaker currency to help stimulate U.K. exports.

The Japanese Yen, on the other hand, continues to gain versus the U.S. Dollar as the Japanese government is not expected to intervene to prevent the Yen from rising. Last week Japan’s Finance Minister said he said he opposes government intervention in the currency markets.

The AUD USD is showing a little strength overnight despite last week’s technical closing price reversal top. This pattern is expected to exert a bearish influence on this market for the next 2 to 3 weeks. Weakness in the equity and commodity markets should help accelerate the move to the downside.

The NZD USD closed off last week’s high last but still finished higher for the week. Last night’s steady equity markets are helping the New Zealand Dollar maintain its firm status. Look for a steady market today unless U.S. equity markets continue their slide.

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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