U.S. Dollar Set Up for Weekly Lower Close

The U.S. Dollar is trading higher against most majorcurrencies at the mid-session, but still in a position to close the week lower.Technically, the Dollar Index is set to post a weekly closing price reversaltop which could lead to the start of a 2 to 3 week break if confirmed nextweek.

The U.S. Dollar is trading higher against most majorcurrencies at the mid-session, but still in a position to close the week lower.Technically, the Dollar Index is set to post a weekly closing price reversaltop which could lead to the start of a 2 to 3 week break if confirmed nextweek.

The EUR USD is trading lower after the four-day rally felljust short of a minor 50% price level at 1.2164. The daily chart indicates thata near-term break to 1.2014 is likely. This price could prove to be strongsupport if traders try to form a secondary higher bottom.

The weekly Euro chart paints a more upbeat picture as thismarket is poised to post a weekly closing price reversal bottom. Onceconfirmed, this pattern suggests a 2 to 3 week rally or a move to 1.2784.

The British Pound is trading sharply lower on risk concernsand bearish U.K.economic data. This week’s three day rally fell short of testing a main top at1.4769 and a 50% price level at 1.4810 before buying interest dried up. At themid-session this market is testing a short-term retracement zone at 1.4499 to1.4435. This area must hold or the current secondary higher bottom pattern willbe at risk.

The USD CHF is trading higher, boosted by the lower Euro andthoughts of another round of Swiss Bank intervention. The downside targetremains.1.1326 but the market may have to retrace to 1.1563 to 1.1603 beforenew selling pressure emerges.

The mixed trade in U.S. equity markets today iscausing a sideways trade in the USD JPY. At the mid-session, this currency pairis trading at a major 50% price level at 91.61. This price is acting like apivot. The Dollar/Yen will strengthen above it, but weaken below it.

The Dollar/CAD is trading slightly better at the mid-sessionbut inside of Thursday’s range. A drop in demand for riskier assets led by thebreak in U.S.equities is the catalyst behind today’s strength.

Weaker equity markets and the disappointing U.S. RetailSales Report are pressuring the AUD USD at the mid-session. Traders are paringlong positions on the notion that the global economic recovery may not be asstrong as previously estimated. Technically this pair stopped short of breakingout above the last main top at .8550.

The NZD USD is trading mixed after failing to follow-throughto the upside after attempting to breakout above the last main top at .6899.Buyers were probably reluctant to buy this breakout because of the 50% level at.6942. A lower close on the daily chart sets up a possible near-term break backto .6739.

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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