Dollar Picking Up Strength

The U.S. Dollar is picking up strength this morning against most majors. It looks like traders are picking up the trend that developed late last week.

The U.S. Dollar is picking up strength this morning against most majors. It looks like traders are picking up the trend that developed late last week. Yesterday the Dollar was mixed. Gains were posted against the European majors while the Dollar weakened versus the Asian-Pacific currencies. M&A activity helped provide the fuel to power a gain in equities, but the lack of fresh economic news kept the Dollar in a tight range throughout the day.

This morning traders will react to the Case-Shiller Housing Price Index and Consumer Confidence. Investors want to see if the housing market continues to show improvement. A better than expected report may hurt the Dollar if trader appetite for risk increases on good news. The most important report will be the Consumer Confidence number. Investors want to see that the public is buying into the recovery. Although confidence may be up because of the stock market rally, consumers have not turned this confidence into actual spending. Nonetheless, the market wants to see consumer confidence continue to climb.

The EUR USD is feeling pressure this morning. This is a follow-through break following last week’s change in trend to down on the daily chart and the weekly closing price reversal top.

The GBP USD is up a little this morning. Technically oversold conditions are helping to boost prices today. Fundamentally this market is still weak and the Bank of England appears to be supporting a weaker Pound.

Weaker crude oil and equity prices are likely to weigh on the Canadian Dollar. This should help the USD CAD in its quest for 1.1124. A move through this price later this week will turn the trend up on the weekly chart.

The Dollar is gaining ground versus the Japanese Yen. Yesterday’s closing price reversal bottom is triggering a technical rally today. Oversold conditions are also contributing to the rally. Fundamentally, the repatriation of Yen by corporations could be easing. This too may be contributing to the weakness in the Yen.

Look for weakness to develop in the AUD USD and NZD USD if the stock market begins to weaken. Demand for these higher yielding assets could pick up after the reports this morning.

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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