Euro Rebounds amid Speculation of Greece Aid

The U.S. Dollar is down across the board at the mid-session led by the Euro which is rebounding amid speculation that Greece is in line to receive financial aid as soon as this week-end.

The U.S. Dollar is down across the board at the mid-session led by the Euro which is rebounding amid speculation that Greece is in line to receive financial aid as soon as this week-end.

The Euro is surging to the upside as shorts scramble to cover positions. Technically, the main trend is still down, but chart watchers are looking for a potential breakout to the upside once a long-term down trend line is pierced at 1.3517. There may be an acceleration to the upside once this barrier is crossed, but gains could be limited by a retracement zone at 1.3542 to 1.3610. The main trend will officially turn up on a trade through 1.3591.

The relief rally in the Euro is helping to boost the GBP USD. In addition, this morning’s bullish inflation report boosted the prospects for the start of an economic recovery. The Bank of England had been saying all along to expect a bumpy recovery and the last several months have proved this statement to be valid. Technically, the British Pound broke through a combination downtrending Gann angle and 50% price level. This helped trigger an acceleration to the upside which turned the main trend to up when it crossed the last swing top at 1.5381. The short-term upside target is 1.5419.

The stronger Euro is helping to pressure the USD CHF. Technically, downside momentum is indicating a potential break to 1.0609 over the near-term. As long as the Euro remains strong, traders expect the Swiss National Bank to refrain from intervening.

The USD JPY is trading lower at the mid-session. Today’s weakness could be attributed to speculation that China is ready to announce that it will allow the Yuan to appreciate against the Dollar. An increase in the value of the Yuan is likely to help the Japanese Yen while weakening the Australian and New Zealand Dollars.

Stronger demand for higher risk assets helped to weaken the USD CAD early in the trading session but a less than stellar Canadian Employment report helped trigger a short-covering rally. This morning this Forex pare failed to take out the last swing bottom at .9975, but the trend remains decisively lower.

Talk of U.S. interest rates remaining low for a prolonged period of time is helping to boost demand for the higher yielding Australian Dollar. The NZD USD is also breaking out to the upside for the same reason. Early in the trading session, the main trend turned up on the daily chart on the trade through the last swing top at .7132. Upside momentum indicates this market is poised to test the Fib retracement price at .7199.

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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