U.S. Dollar Wavering in Thin Holiday Trade

The U.S. Dollar is trading higher at the mid-session afterwavering for most of the morning. Thin holiday trading is the reason behindinvestor indecision today. Thursday’s action was most likely the day large traderssquared up positions for the month, leaving today open for smaller traders.

The U.S. Dollar is trading higher at the mid-session afterwavering for most of the morning. Thin holiday trading is the reason behindinvestor indecision today. Thursday’s action was most likely the day large traderssquared up positions for the month, leaving today open for smaller traders.

The EUR USD is trading flat to better at the mid-session. Sofar the majority of the price action during the day-session has been containedinside a retracement zone at 1.2345 to 1.2407. It needs to build a support baseinside this zone in order to continue on to its short-term objective of 1.2742.

The main trend remains down in the GBP USD but the market isbeginning to show signs of a bottom. The short-term range is 1.4229 to 1.4610.This creates a retracement zone at 1.4419 to 1.4374. Watch for a near-termpull-back into this zone. If this market is going to move higher then it mustbuild a secondary higher bottom at or near this zone. The daily chart indicatesthat this market has the potential to rally back to 1.4810, but a new higherbottom has to be formed to solidify the developing pattern. Traders have been alittle more optimistic about the British Pound because of easing tensions inthe Euro Zone and the positive steps to shore up the U.K. economy by the new government.

The daily main trend is up in the USD CHF, but the closingprice reversal at 1.1695 from earlier in the week indicates that a major topmay be forming. The current chart formation suggests that this market has roomto the downside with 1.1309 the next likely downside target.

The weaker stock market is applying pressure to the USD JPY.Traders seem to be taking a little more protection in the lower yielding Yenahead of the three-day week-end. This morning the Dollar/Yen failed to reachits main upside objective of 91.61 before sellers arrived.

The USD CAD is posting a modest gain at the mid-sessionafter breaking into a retracement zone at 1.0481 to 1.0394. The main trend isup but the market is showing signs of topping. There may be one more rally to1.0648 to 1.0696 before new selling pressure surfaces. Demand for higher riskassets will push this market lower along with a possible hike in interest rateson June 1st by the Bank of Canada.

The AUD USD is trading lower. Profit-taking is setting inafter the strong rally this week. Increased appetite for risk will rally theAussie over the near-term. The next upside target is a 50% price at .8727.Traders should watch for buyers to step in if this market breaks back to .8308to .8251. This market may be turning higher but needs to solidify the patternby forming a secondary higher bottom in this price zone.

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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