Dollar continues to Strengthen at Mid-Session; Euro adding to Earlier Loss

The Euro is trading lower at the mid-session on reports that a few Euro Region finance ministers are rejecting the idea of a bailout for Greece.

The Euro is trading lower at the mid-session on reports that a few Euro Region finance ministers are rejecting the idea of a bailout for Greece. Over the weekend ahead of the start of today’s two-day meeting in Brussels, German Finance Minister Schaeuble and French Finance Minister Lagarde downplayed the possibility of a bailout package. This news was contrary to reports last week which speculated on a $41 billion bailout proposal from German and France.

The failure to obtain financial aid could be a blow to the Greek economy as it tries to implement austere budget cutting measures. Pressure could continue on this currency from the hedge funds who are still believe in the demise of the Euro. Additional concerns about the credit ratings of Spain, Portugal, Ireland and Italy are also weighing on the EUR USD.

The British Pound is trading sharply lower at the mid-session as traders are speculating that the U.K. will be unable to service its debt, thereby increasing the odds of a credit downgrade by Moody’s. The CFTC is also reporting in its Commitment of Trader’s Report that the number of net short traders is at 67,549 as of March 2nd. Political uncertainty which could lead to a “hung parliament” is also contributing to today’s weakness. Selling pressure looks as if it will continue to build into the close.

The USD JPY has turned around after earlier strength and is now trading lower. An increase in demand for lower yielding assets led by the drop in U.S. equity markets is helping to send investors into the safety of the Japanese Yen. Earlier in the session, the USD JPY was trading higher on concerns that the Japanese government may begin implementing a plan to ease the rise in the Yen.

The decline in the Euro is helping to halt the recent slide in the USD CHF and is now boosting this pair at the mid-session. The Swiss Franc is falling on increased speculation the Swiss National Bank will intervene again to weaken its currency against the falling Euro. Technically, this market is in a position to post a daily closing price reversal bottom.

The USD CAD is trading higher after earlier weakness. Plunging crude oil and a break in Gold after earlier strength is helping to weaken the Canadian Dollar. Look for more upside pressure if trader demand for higher risk assets continues to decline throughout the session.

The AUD USD is trading lower at the mid-session after confirming Friday’s closing price reversal top. Lower demand for higher risk assets is driving this market down. The chart indicates that a move to .8997 is likely if traders decide to begin dumping risk more aggressively.

Lower demand for risk and concerns about the New Zealand economy are putting downside pressure on the NZD USD. The sharp break in U.S. equity markets today is contributing the most to the weakness.

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

Disclainer: