Euro Rally Stops Short of Main Top at 1.2453

The Euro rally overnight stopped short of taking out theprevious main top at 1.2453 and turning the main trend up. The secondary rallyto 1.2394 during the New Yorksession also fell short of the top. The lack of fresh economic news is helpingto keep the market in a tight range.

The Euro rally overnight stopped short of taking out theprevious main top at 1.2453 and turning the main trend up. The secondary rallyto 1.2394 during the New Yorksession also fell short of the top. The lack of fresh economic news is helpingto keep the market in a tight range.

Following last week’s closing price reversal bottom, the EURUSD rallied sharply higher this week boosted mainly by short-covering. Earlierin the week, another sovereign debt scare from Spain put pressure on the Euro, butthe market reversed when a Spanish bond auction attracted very strong buyinginterest.

The weekly chart indicates there is room to the upside to1.2784, but the previous tops at 1.2453 and 1.2671 could mean the effort toreach this 50% level will be labored. The rally from the 1.1876 bottom is nowin its 9th day leaving analysts to wonder if real buying is drivingthe Euro higher or the lack of bearish news.

The GBP USD is trading slightly lower at the mid-session inlimited movement. The main trend is up on the daily chart but the market cannotseem to get away from a 50% level at 1.48100. A close over this price couldtrigger the start of a rally to 1.4947. A failure to hold this level couldtrigger a retracement back to 1.4599.

The action at the mid-session indicates the possibility of aclosing price reversal top. The formation of this pattern would be strongindication that a short-term top is being built.

Steady U.S.equity markets are helping to hold the AUD USD up and in a position to test amajor 50% price at .8727. This week’seconomic news indicating the U.S.economy is still weakening diminished the chances of the Fed hiking interestrates by the end of the year. This news made the Aussie a more attractiveinvestment over the Dollar.

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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