U.S. Dollar rallies as Traders Dump Higher Risk Assets

The U.S. Dollar was trading higher at the mid-session astraders sold higher risk assets after the SEC filed fraud charges againstGoldman Sachs.

The U.S. Dollar was trading higher at the mid-session astraders sold higher risk assets after the SEC filed fraud charges againstGoldman Sachs. The hardest hit market was the U.S. equities which dropped 1.50 to2.00% following the announcement. The news triggered a massive liquidation inspeculative commodities and equities, affecting almost all Forex markets.

The EUR USD, which was already trading lower at the time thebearish news hit the market, broke sharply while filling in the gap created onApril 11th. This market is finding some support at a 50% retracement level at1.3486. A failure to hold this level could mean an acceleration down to 1.3438.

The GBP USD is under pressure after breaking an uptrendingGann angle at 1.5437 and a .618 retracement level at 1.5419. The daily chartindicates this market is likely to test a 50% level at 1.5160 on April 20th.

The weaker Euro helped trigger a rally in the USD CHF. Afterseveral attempts to break a 50% level at 1.0609, the bearish Goldman Sachs newsfinally helped trigger stops above this level. Upside momentum could trigger afurther rally to a retracement zone at 1.0643 to 1.0676.

The hard break in the stock markets fueled a drop in the USDJPY as traders liquidated their stock positions and paid back loans afterbuying back the Japanese Yen. The first downside objective at 92.26 wasviolated sending this market into an uptrending Gann angle at 92.02 where itfound support. Further selling pressure could take this market down to a .618price level at 91.67,

The main trend turned up on the daily USD CAD chart afterthis market crossed a main top at 1.0127. A downtrending Gann angle at 1.0122stopped the rally. Falling crude oil and gold contributed to the weakness inthe Canadian Dollar. Further upside action could take this market to 1.0108.

The decline in U.S equities is helping to contribute to theweakness in the AUD USD at the mid-session. Look for this market to challengethe last main bottom at .9223 into the close. A break through this level willturn the main trend down. Beside the liquidation of higher risk assets today,speculation that Chinamay revalue the Yuan is putting downside pressure on this currency pair.

The NZD USD turned the main trend down on the daily chartwhen it penetrated a swing bottom at .7086. A break through .7150 could trigger an acceleration to the downsidelater today. The daily chart indicates this market is vulnerable to a hardcorrection to .6986 over the near-term.

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