Euro Recovering after Nearing Annual Low at 1.2143

The Euro is recovering at the mid-session after testing thelow for the year at 1.2143. If this low holds, then it will mean that lastweek’s reversal bottom is still intact while indicating that buyers havestepped in to support the currency.

The Euro is recovering at the mid-session after testing thelow for the year at 1.2143. If this low holds, then it will mean that lastweek’s reversal bottom is still intact while indicating that buyers havestepped in to support the currency.

The best sign that a bottom is being formed and that today’saction was a successful test of the low will be the regaining of theretracement zone at 1.2407 to 1.2345. Building a fresh support base in thisprice zone will be a sign of higher markets to follow, but the main trend willnot change to up until 1.2671 is taken out.

A break though 1.2143 will indicate that further downsidemovement is likely with the early 2006 price at 1.1825 the next likely downsidetarget.

The main catalyst behind the weakness in the Euro at thistime is concern that Europe’s sovereign debtissues are spreading, threatening the global economic recovery.

Traders have been selling the EUR USD since early Sundayevening when Spaintook over a struggling financial institution. The move accelerated to thedownside after the International Monetary Fund said Spain has been too slow tostrengthen its banking system. This statement by the IMF helped createuncertainty in the market leading to the current sell-off.

Technically, the Euro is oversold, but it is going to takean easing of concerns in the Euro region before any of these oversoldindicators will have any relevance.

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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