Dollar Weakening On Holiday Volume; Lack of Major News Events

The U.S. Dollar backed off a 3-month high overnight as volume began to dry up ahead of this week’s Christmas holiday. The relatively empty economic calendar along with holiday volume has the potential to create volatile trading conditions.

The U.S. Dollar backed off a 3-month high overnight as volume began to dry up ahead of this week’s Christmas holiday. The relatively empty economic calendar along with holiday volume has the potential to create volatile trading conditions.

The EUR USD is trading higher overnight. Traders will be monitoring Greece’s deficit problems as well as reassessing the possibility the Fed will begin tightening its monetary policy. Dubai debt issues may resurface today which could be a surprise for traders. Dubai is meeting with creditors to renegotiate credit terms. Look for the Euro to weaken if negotiations fall apart.

The British Pound is trading weaker. The chart indicates the next potential downside target is 1.5980. Traders are repositioning ahead of tomorrow’s Final Third Quarter GDP report. Economists’ are guessing an upward revision to -0.1% from an earlier guess of
-0.3%. This figure will be a positive for the GBP USD and indicate that the U.K is getting ready to return to growth during the 4th quarter.

The Dollar is trading slightly better against the Yen overnight. A wider-than-expected Japanese trade surplus helped to limit losses early in the trading session. The Dollar could lose ground this week in limited traded.

The USD CHF is trading lower. Profit-taking and signs that this pair may be overbought is helping to generate overnight pressure. End of the year position evening is also contributing to the weakness. Don’t be surprised by a pull-back to 1.0337.

The USD CAD is under pressure. This weakness began on Friday when the oil market began to strengthen. Today’s Canadian Retail Sales Report could be a market mover. Once again this currency pair is trading inside of a range. The upper boundary is 1.0691 followed by 1.0459.

The Aussie and the New Zealand Dollar are both under pressure overnight. Although U.S. equity markets are called higher, demand for higher yielding assets has been falling as traders reassess the Fed interest rate position. Lower economic expectations are also pressuring the NZD USD and AUD USD.

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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