Euro Surges; Top 1.2900 for First Time since Early May

The EUR USD surged to the upside this morning as a combination of weak U.S. economic data and better than expected demand for Spain’s debt triggered a sharp breakout to the upside.
The EUR USD surged to the upside this morning as a combination of weak U.S. economic data and better than expected demand for Spain’s debt triggered a sharp breakout to the upside.

Technically, this morning’s rally in the Euro took out a key 50% level at 1.2783 and now appears to have enough upside momentum to challenge the Fibonacci retracement price at 1.2998.

Following Wednesday’s weak assessment of the economy by the Fed, the U.S. released data today pointing toward low inflation and weakness in manufacturing. This news raised concerns about the near-term health of the U.S. economy, encouraging traders to think that U.S. fundamentals are making the Dollar a less attractive alternative to investors. Furthermore, now that the European Central Bank has taken steps to aid ailing nations, investors want to move on from the sovereign debt issues in Europe.

Stronger demand for the Euro is likely to continue until late next week when investors are likely to begin paring positions ahead of the release of the European bank stress tests. On Wednesday, rumors began circulating.

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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