U.S. Dollar Trading Lower Versus Most Major Currencies

The U.S. Dollar is trading lower against most major currencies as traders take advantage of thin market conditions ahead of tomorrow’s key U.S. Non-Farm Payrolls Report.

The U.S. Dollar is trading lower against most major currencies as traders take advantage of thin market conditions ahead of tomorrow’s key U.S. Non-Farm Payrolls Report. Earlier in the session the Dollar rose slightly following a decline in U.S. Weekly Initial Claims before being overcome by aggressive buying of higher yielding assets. Signs that the global economy may be recovering faster than previously thought is helping to pressure the Dollar led by strong rallies in the British Pound and Canadian Dollar.

The Euro is trading higher one day after the main trend changed to up on the daily chart. Traders have chosen to ignore potential problems developing in Greece over its ability to finance its debt and instead have decided to focus on improvements in the Euro Zone economy. The charts indicate this market is on target to test a resistance cluster at 1.3610 to 1.3620 after regaining a 50% level at 1.3452.

The GBP USD is surging this morning following a better than expected U.K. manufacturing report and a positive poll showing that the chance of a hung parliament is decreasing. Close to the mid-session, the British Pound was testing a 50% level at 1.5297. Overtaking this level could trigger an acceleration through the last swing top at 1.5381, turning the main trend to up.

The stronger Euro helped trigger an acceleration to the downside through a 50% level at 1.0513 and a swing bottom at 1.0506. The sharp break came close to testing a .618 retracement level at 1.0423. The market stopped after testing 1.0434 before starting a massive short-covering rally on rumors of another intervention by the Swiss National Bank. Earlier this morning, the Swiss Franc reached a record high versus the Euro.

Strong demand for higher risk assets and the prospects of an economic recovery in the U.S. helped drive the USD JPY to a new high for the year. The market is continuing to gain at the mid-session after breaking the January top at 93.77. The initial rally began when a story broke that Japanese investors were putting money into foreign stock markets to seek a better return because of the lower yields being offered in Japan.

The USD CAD is accelerating to the downside after breaking through a minor support price at 1.0152. Greater demand for riskier commodities such as gold and crude oil is helping to pressure this pair lower. Recent government data suggests the economy is growing, putting the currency on track to reach parity with the U.S. Dollar.

The strong surge in U.S. equity markets helped the AUD USD regain is bullish trend after a one-day setback. News that the Chinese manufacturing index increased more than expected drove up the Aussie on the prospect of greater demand for Australian raw materials.

The NZD USD is trading lower but making a comeback in reaction to a pick-up in demand for higher risk assets. Earlier in the session the New Zealand Dollar weakened in response to trader concerns that a rate hike in June by the Reserve Bank of New Zealand may not be a sure thing.

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