U.S. Dollar Remains under Pressure at Mid-Session

The U.S. Dollar opened down and remains lower against most major currencies as traders seem to be reassessing Friday’s employment report while brushing aside today’s jump in ISM Non-Manufacturing and the unexpected surge in pending home sales.

The U.S. Dollar opened down and remains lower against most major currencies as traders seem to be reassessing Friday’s employment report while brushing aside today’s jump in ISM Non-Manufacturing and the unexpected surge in pending home sales.

The Dollar seems to be holding its ground versus the Euro. At the mid-session the EUR USD is slightly lower. The strength in the U.S. economy should have been enough to weaken the Euro substantially along with the developing lack of confidence in the Greek financial bailout proposal. Instead, the Euro is hanging in there as it approaches retracement zone and trend line resistance.

The GBP USD is trading better, but having trouble with a key 50% level at 1.5297. Although recent reports have shown that the U.K. economy is growing, doubt continues to linger about the outcome of the election and the potential hung parliament that could hamper the country’s effort to reduce its budge deficit.

The USD CHF is trading in a tight range as traders await direction from the Euro. Traders are leaning a bit to the upside in anticipation of another intervention by the Swiss National Bank.

Early Sunday night, the USD JPY surged to its highest level since August 2009. Overbought conditions and position squaring ahead of tomorrow’s Bank of Japan meeting has put this pair in a position to form a daily closing price reversal top.

Stronger gold and crude oil is putting pressure on the USD CAD. Strong commodity prices and the outlook for a better economy are helping to drive this pair toward parity. Traders are also pricing in the strong possibility the Bank of Canada will raise interest rates before the Federal Reserve.

The AUD USD is trading higher on light volume and low volatility. Traders are awaiting the Reserve Bank of Australia’s interest rate decision on Tuesday. Expectations are for a hike of 25 basis points. 50bp will be bullish, unchanged will be bearish. If the market gets 25, then the language in the statement will move the markets.

The New Zealand Dollar is still under pressure because of last week’s International Monetary Fund report calling the currency overvalued. Traders also fear the high priced currency will hurt export sales and thus the chance of an interest rate hike by the Reserve Bank of New Zealand.

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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