Intraday U.S. Dollar Rally Fizzles near the Close

At the midsession, it appeared the U.S. Dollar was in a position to reverse today’s trend and finish higher for the day, but bullish news from Intel after the close helped drive up demand for higher risk assets.

At the midsession, it appeared the U.S. Dollar was in a position to reverse today’s trend and finish higher for the day, but bullish news from Intel after the close helped drive up demand for higher risk assets.

The EUR USD finished higher despite a less than friendly German consumer confidence report. Traders have decided to focus on the future rather than old economic data. This is helping to give the Euro its current boost. The Euro made a new high for the year today, but there was no acceleration to the upside. This is leading some analysts to believe that this currency pair is overbought at current levels.

This morning a bearish U.K. inflation report initially drove the GBP USD lower, but traders quickly bought the dip to trigger a higher close by the end of the day. The closing price reversal bottom does not change the trend to up, but indicates the start of a 2 to 3 day rally. The chart indicates a move to 1.5913 to 1.5962 is likely over the short-term.

The USD CAD was trading sharply lower for most of the New York session until Canadian Prime Minister Stephen Harper said that he was concerned about the rapid rise in the Canadian Dollar. His fear that the price appreciation would have a negative impact on Canadian exports helped trigger a strong short-covering rally. This currency pair came close to posting a closing price reversal bottom, but bullish news from Intel after the close helped trigger demand for higher risk assets.

Upside momentum slowed a bit in the AUD USD because of the intra-day weakness in U.S. equity markets. For some time today, the Aussie was in a position to post a daily closing price reversal top, but a surge late in the day prevented this from happening. Bullish news from Intel helped rally the stock market after the close but before the New York Forex session closed. This market is beginning to look tired and upside momentum appears to be slowing. Technical conditions may be approaching overbought levels as traders may have built in too much of a cushion in anticipation of next month’s expected interest rate hike.

The NZD USD closed higher but the chart pattern indicates a possible divergence pattern forming between the New Zealand Dollar and Australian Dollar. This could indicate a potential topping pattern. Today it New Zealand Retail Sales were reported better than expected. This indicates that consumers are helping to spend the economy through the recession.

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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