Consumer Confidence Data Turns Dollar Higher

The Dollar turned about mid-morning after a lower opening. Today’s U.S. Consumer Confidence Data came out better than expected, boosting the Greenback.

The Dollar turned about mid-morning after a lower opening. Today’s U.S. Consumer Confidence Data came out better than expected, boosting the Greenback. Evidence is beginning to build which shows the U.S. economy is recovering faster than the Euro Zone. This means the Fed is likely to begin raising interest rates before the European Central Bank. In addition, 10-Year Note yields have risen above the German Bund which is making an investment in U.S. Treasuries a more attractive investment. This is helping to pressure the EUR USD at the mid-session.

The GBP USD posted a strong gain this morning following an upward revision in Fourth Quarter GDP. The final GDP figure showed the economy expanded by 0.4% during the fourth quarter, up from the previous estimate of 0.3%. Economists claim upward revisions in services and construction were responsible for the increase. Despite the bullish news, this market is still in a down trend and struggling with a key 50% level at 1.5080.

Upside momentum slowed considerably overnight which helped weaken the Euro along with better than expected U.S. Consumer Confidence. The buzz over the European Union/International Monetary Fund Greece bailout plan seems to be fading also. As expected, the EUR USD broke back into a minor 50% retracement level at 1.3402.

The lower Euro is helping to underpin the USD CHF after breaking out above the .618 retracement level at 1.0628. The next upside target is another 50% level at 1.0703. The trend will remain down until 1.0751 is violated.

The USD JPY weakened initially overnight, but turned positive after global equity markets rallied and U.S. Consumer Confidence came out better than expected. Overbought conditions are still limiting movement in this currency pair along with a slow down in upside momentum in U.S. stock markets.

Speculators drove the USD CAD lower on expectations of a strong U.S. jobs report on Friday. Many traders feel that strong jobs data will also help the Canadian economy and bring the Bank of Canada closer to raising interest rates before the Fed. Sellers pressed this pair into a .618 support level near 1.0152. Shorts covered their positions following a test of this level and when it was reported that U.S. Consumer Confidence was better than expected.

The AUD USD continued its surge to the upside, buoyed by bullish comments from over the week-end by Reserve Bank of Australia Governor Stevens. The central bank leader said that improvements in the Australian housing market may warrant another interest rate hike in April. In addition, speculators are anticipating a bullish Retail Sales Report on Wednesday. Now that this market has crossed to the bull side of a retracement zone, look for a test of the last main top at .9251. A slow down in the U.S. stock market rally led to some position evening in the Aussie which is causing it to back off the high.

Greater demand for higher risk helped to drive the NZD USD into a key 50% retracement level at .7124. Sellers came in after this price was tested and U.S. equity markets weakened. A breakout over this level could trigger at test of the .618 level at .7199. A rally in U.S. equity markets today is likely to trigger a surge to the upside.

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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