Dollar Trading Lower against Most Majors

The U.S. Dollar is trading lower against most major currencies after better-than-expected jobs data drove investors into higher yielding assets. The initial move in the Dollar was up after the U.S.

The U.S. Dollar is trading lower against most major currencies after better-than-expected jobs data drove investors into higher yielding assets. The initial move in the Dollar was up after the U.S. Non-Farm Payrolls Report showed fewer jobs were lost than estimated. Traders bought the Dollar on the belief that the better jobs number would move the Fed closer to hiking interest rates. Higher interest rates would make U.S. investments relatively more attractive. This move was short-lived however as investor demand for higher yielding assets overcame the desire to hold Dollars.

The EUR USD is trading better at the mid-session. Relief that the Greek budget deficit crisis may be easing is helping to drive out weaker shorts. Earlier in the week, the main trend turned up on the daily chart, but this market needs to move through 1.3735 in order to reaffirm this change in trend.

The British Pound is trading near the high of the day at the mid-session. Upside momentum seems to be building which could take this market to a 50% level at 1.5297 over the near-term. The current rally appears to be driven by short-covering and bottom-picking following a sharp sell-off earlier in the week. The driving forces behind the recent sell-off have been the weak economy, soft monetary policy and political uncertainty.

The USD JPY is trading sharply higher. The improving U.S. economy and demand for higher risk assets is putting pressure on the Japanese Yen as it resumes its role as a funding currency. Traders are also reacting to the possibility that the Bank of Japan will announce more stimuli at its upcoming policy meeting. Today’s rally completed the first objective of yesterday’s closing price reversal bottom when it reached a .618 price level at 90.61.

The strengthening Euro is helping to pressure the USD CHF. Traders are expressing relief that a higher Euro will encourage the Swiss National Bank from any further interventions. The main downside objective remains a major 50% level at 1.0513.

Demand for higher risk assets is giving the AUD USD and NZD USD a boost at the mid-session. The Aussie is one of the strongest currencies. Today’s trading action proved this by taking out the .618 resistance level at .9042. This price is now new support. Watch for a possible late session acceleration to the upside if stops are hit above the recent main top at .9070.

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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