U.S. Dollar Trading Mixed; Traders await Fed Announcement

The U.S. Dollar is trading mixed at the mid-session. Tradinghas been light, but the Greenback did get a boost following a plunge in the U.S. housingmarket. Gains probably would have been greater if volume was at average levels.

The U.S. Dollar is trading mixed at the mid-session. Tradinghas been light, but the Greenback did get a boost following a plunge in the U.S. housingmarket. Gains probably would have been greater if volume was at average levels.

This afternoon the Federal Open Market Committee is expectedto announce that interest rates will remain unchanged at historically levels.In addition, the Fed is likely to say that while the economy is improvingslowly, housing and employment conditions continue to remain weak. Look for theFed to reiterate its stand that rates will remain low for a prolonged period oftime.

The EUR USD broke after a report showing a drop in new U.S. home salesweighed heavily higher risk assets. Traders looked for safety in the Dollar asthe report indicated a still weak U.S. economy and the possibility ofa double-dip recession in the housing market.

At the mid-session, the Euro was nearing a key retracementzone at 1.2174 to 1.2102. A test of this area is necessary to help establishthe strength of the recent main bottom at 1.1876. The formation of a secondaryhigher bottom will be a strong sign that buying is overcoming shorting and thata change in trend to up is imminent.

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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