Euro Drops to 4-year Low ahead of U.S. Jobs Data

After holding steady for a few days, the Euro plungedthrough the recent bottom to post a 4-year low. This morning’s move came as asurprise to many traders who had expected the single-currency to hold its rangeuntil after the release of the employment number.

After holding steady for a few days, the Euro plungedthrough the recent bottom to post a 4-year low. This morning’s move came as asurprise to many traders who had expected the single-currency to hold its rangeuntil after the release of the employment number.

Traders are saying that this morning’s sharp break was areaction to new concerns about the health of European banks. Investors areconcerned that mounting debt issues across the Euro Zone will erode investorconfidence in the Euro and slow down the rebound in the global economy. Manytraders were surprised by this morning’s move which caught traders off guard asthey awaited the release of the important U.S. jobs data report.

The GBP USD is also under pressure because of the drop inrisk appetite. The charts indicate that a test of 1.4499 to 1.4435 is likelyover the near-term.

Plunging equity markets are triggering a possible reversaltop in the USD JPY. Traders are dumping risky assets following the plunge inthe Euro and the weaker than expected U.S. jobs data report. TheDollar/Yen is trading back under a .618 retracement level at 92.41 which makes91.61 a new downside target.

Falling demand for higher risk assets is helping to drivethe USD CAD higher. The main trend is down, but upside momentum is buildingwhich could trigger a reversal of this trend on a breakout over the last swingtop at 1.0573.

Demand for higher yielding currencies is falling in reactionto the weaker than expected U.S. Non-Farm Payrolls report. The drop in the U.S. stockmarket is pressuring the AUD USD. At this time the Aussie is testing a minor50% level at .8308. A decisive move through this level could trigger a furtherdecline to .8251. The NZD USD is also trading sharply lower after turning itsdaily trend to up on Thursday. The main trend will remain up until the bottomat .6701 is violated.

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

Disclainer: