Euro Trading Flat after U.S. Economic Reports

After trading sharply higher overnight due to a technical breakout to the upside, the EUR USD is trading flat. The Euro traded sideways to lower following a report that showed U.S. Retail Sales increased more than expected in February.

After trading sharply higher overnight due to a technical breakout to the upside, the EUR USD is trading flat. The Euro traded sideways to lower following a report that showed U.S. Retail Sales increased more than expected in February. After reaching a low at 1.3727, the Euro began to rally following a less than stellar consumer confidence report. Since then the Euro has traded sideways-to-lower, but has managed to hold on to its overnight gains. Technically, the main trend is up on the daily chart with 1.4009 a possible near-term target.

Most of the strength in the Euro this week can be attributed to the easing of the financial crisis in Greece as well rumors of a possible $50 billion bailout by France and Germany.

The GBP USD is trading better at the mid-session. Oversold conditions and renewed optimism about the economy is helping to boost prices. This should be looked at as a short-term move, however, as the fundamentals still suggest lower prices are likely. Concerns over the economic recovery, political uncertainty and the lack of confidence in the Bank of England could limit gains or trigger fresh selling after a retracement.

The USD JPY is trading lower after a strong surge to the upside following an early morning spike in U.S. equity markets. Technically, this pair reached a major 50% price at 90.95 before backing off. The direction of the stock market will dictate the moves in the Japanese Yen into the close. A weaker stock market should drive the Yen higher.

The stronger Euro is helping to pressure the USD CHF. The higher the Euro goes, the weaker this pair should get. The stronger Euro removes the pressure from the Swiss National Bank to weaken its currency through intervention.

The weaker Dollar and early demand for higher risk assets helped drive the USD CAD through the October bottom at 1.0205. At first traders approached this price level with caution out of fear of an intervention by the Bank of Canada. The BoC has been quiet however, due to the fact that the strength in the Canadian Dollar is being driven by economic reasons rather than speculation. Downside momentum is building which could send the Canadian Dollar to parity with the U.S. Dollar. It’s not suggested to get aggressively short at current levels since there is still a chance the BoC may intervene.

Strong demand for higher yielding assets and a spike in U.S. equity markets helped drive the AUD USD higher this morning. Selling pressure is weakening this market at the mid-session because of the drop in U.S. equity markets. Technically, we can see a closing price reversal top if the Aussie closes lower.

The NZD USD is trading slightly higher, but gains have been limited because of weaker demand for higher yielding assets. The direction of the U.S. equity markets should determine which way this pair moves into the close.

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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