Dollar Gains after Downward GDP Revision

The U.S. Dollar ticked slightly higher following thedownward revision of Q1 U.S. GDP from 3.0% to 2.7%. Although the news signaleda weakening economy due to slower consumer and business spending, tradersbought the Dollar looking for safety in the lower yielding currency.

The U.S. Dollar ticked slightly higher following thedownward revision of Q1 U.S. GDP from 3.0% to 2.7%. Although the news signaleda weakening economy due to slower consumer and business spending, tradersbought the Dollar looking for safety in the lower yielding currency.

The EUR USD is trading lower in limited action. Pressure hasbeen on the Euro since posting a closing price reversal top on Monday followinga 10-day rally. Besides weak global economic news creeping through the market,the Euro has been peppered by fresh concerns regarding the European bankingsystem and renewed worries about European sovereign debt.

Technically, the closing price reversal triggered theexpected 2 to 3 setback, but the main price objective was not reached at 1.2171to 1.2102. Currently, this market is in a position to post a weekly reversaltop when could mean even more bearishness next week.

The question that investors have been asking themselves thisweek is whether to lighten up on the short side in the Euro because of thestring of weak economic data coming out of the U.S or tighten the grip on theEuro because sovereign debt issues simply will not go away. This question willbe answered by whether the retracement zone at 1.2171 to 1.2102 can hold assupport.

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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