Euro Holding Gains in Limited Trade

After gapping up and pulling back from its high, the EUR USD has settled into a range as traders await more details about the Greece bailout package.

After gapping up and pulling back from its high, the EUR USD has settled into a range as traders await more details about the Greece bailout package. In addition, traders are waiting for tomorrow’s Greek Treasury bill auction. Investors want to see whether there is strong demand for short-term Greek debt or if it is going to have to borrow to keep up with its financial obligations.

The commodity and equity markets are giving mixed signals today. Initially, both asset classes rallied as the Euro broke out to the upside. Some traders feel that this new agreement eliminates concerns about Greece’s ability to meet its short-term obligations. Some even feel that the funding is enough to ensure that Greece will have enough liquidity to implement its new austere financial measures.

The GBP USD has given back all of its overnight gains and is now in a position to post a daily closing price reversal top. The British Pound piggy-backed the Euro’s rally but turned negative when it broke off its high. The charts indicate a break back to 1.5297 is likely over the near-term.

After a sharp sell-off overnight, the USD CHF has settled into a range at 1.0670 to 1.0568. This market is mirroring the movement in the Euro. A strong Euro will drive the Dollar/Swiss lower.

Mixed equity markets are triggering a so-so trade in the USD JPY. Stronger equity markets will increase demand for higher risk assets which will put pressure on the Japanese Yen.

The USD CAD is trading flat at the mid-session. The lack of direction in gold and crude oil is contributing to trader indecisiveness. Technically, this market is oversold and getting support from the confirmed reversal bottom at .9975. A break in gold and crude oil will likely drive this market higher to the 50% level at 1.0138.

A worse than expected housing market outlook is putting pressure on the AUD USD at the mid-session. Overnight this pair rallied sharply higher on increased demand for higher risk assets. After the bearish report, the Aussie sold off, putting it in a position to form a closing price reversal top.

A similar pattern is developing in the NZD USD as traders sold this market in reaction to the move in the Australian Dollar. At the midsession, the Kiwi is finding short-term support at a 50% level at .7124.

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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