Dollar Still Trading Mixed; Light Fundamental/Economic News to Blame

The U.S. Dollar continues to trade mixed at the mid-session following a tight overnight trading range. The trade weighted Dollar Index is trading lower after confirming last Friday’s closing price reversal top.

The U.S. Dollar continues to trade mixed at the mid-session following a tight overnight trading range. The trade weighted Dollar Index is trading lower after confirming last Friday’s closing price reversal top.

The lack of major U.S. economic reports today is helping to hold the Forex markets in a tight range as investors await testimony from Fed Chairman Bernanke. His comments could move the markets. Today, he is expected to speak before the House Financial Services Committee about employment growth prospects and whether fiscal stimulus is needed.

Traders will be looking for Bernanke to give them clues about the timing of future U.S. interest rate hikes. If the Fed Chairman’s comments indicate tightening then the Dollar is likely to rise. A dovish tone will be bearish.

The Euro is trading lower as investor confidence is evaporating following a failure by the European Union to reach an agreement with Greece regarding its fiscal responsibility.

The GBP USD is trading flat to higher, but inside Friday’s range. Traders are covering short positions after the recent sharp sell-off in an effort to lock in profits. There has been no change in the fundamentals. The budget deficit, weak economy and lack of confidence in the Bank of England are the catalysts behind the weakness in the British Pound.

Risk sentiment is driving the USD JPY lower. Traders are a little jittery about holding on to risky assets. This is helping to support the Japanese Yen.

The weaker Euro is helping to support the USD CHF. Traders are reacting as if the falling Euro may trigger another round of intervention by the Swiss National Bank.

Lower gold and weakening crude oil are helping to underpin the USD CAD. Technically this market is in a position to form a daily closing price reversal bottom that could trigger the start of a short-covering rally.

The AUD USD and NZD USD are up but well off their highs. Both of these markets tried to break out to the upside, but risk sentiment is helping to limit gains today. Traders are waiting to take clues from Fed Chairman Bernanke’s testimony. These markets will be sensitive to stock market volatility and direction.

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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