Euro Upside Momentum Falters after Gap Higher Opening

The EUR USD settled into a range after gappingopen and pulling back from its high throughout the New York session, as traders awaited more details about the Greece bailoutpackage.

The EUR USD settled into a range after gapping open andpulling back from its high throughout the New Yorksession, as traders awaited more details about the Greece bailout package. Inaddition, traders are waiting for Tuesday’s Greek Treasury bill auction.Investors want to see whether there is strong demand for short-term Greek debtor if it is going to have to borrow to keep up with its financial obligations.

 The commodity and equity markets gave mixed signals today.Initially, both asset classes rallied as the Euro broke out to the upside. Sometraders felt that this new agreement eliminated concerns about Greece’sability to meet its short-term obligations. Some even felt that the funding wasenough to ensure that Greecewould have enough liquidity to implement its new austere financial measures.

 The GBP USD gave back all of its overnight gains and posteda daily closing price reversal top. The British Pound piggy-backed the Euro’srally but turned negative when it broke off its high. The charts indicate abreak back to 1.5297 is likely over the near-term.

 After a sharp sell-off overnight, the USD CHF settled into arange at 1.0670 to 1.0568. This market mirrored the movement in the Eurothroughout the day. A strong Euro will continue to drive the Dollar/Swisslower.

 Mixed equity markets triggered a so-so trade in the USD JPY.Stronger equity markets will increase demand for higher risk assets which willput pressure on the Japanese Yen. Otherwise continue to look for the Dollar/Yento drift sideways over the near-term.

 The USD CAD traded flat most of the New York session. The lack of direction ingold and crude oil contributed to trader indecisiveness. Technically, thismarket 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 tothe 50% level at 1.0138.

 A worse than expected housing market outlook put pressure onthe AUD USD. Overnight this pair rallied sharply higher on increased demand forhigher risk assets. After the bearish report, the Aussie sold off, helping to aclosing price reversal top.

 A similar pattern developed in the NZD USD as traders soldthis market in reaction to the move in the Australian Dollar. The close underthe 50% level at .7124 indicates further downside pressure should beanticipated.

 

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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