Euro Up Despite Potentially Negative News

The Euro is trading higher this morning despite potentiallynegative news regarding Irelandand Hungary.The market is currently mounting a rally after earlier weakness, putting it ina position to challenge last week’s high at 1.3006.

The Euro is trading higher this morning despite potentiallynegative news regarding Irelandand Hungary.The market is currently mounting a rally after earlier weakness, putting it ina position to challenge last week’s high at 1.3006.

The Euro was under pressure early in the session led by ajump in insurance costs for Irish and Hungarian debt. Insurance costs roseafter credit rating agency Moody’s Investors Service downgraded Ireland’sgovernment bond ratings to Aa2 from Aa1, citing the government’s “gradual, butsignificant loss of financial strength.”

A breakdown in talks between the Hungarian government andthe International Monetary Fund sent worries throughout Europe.Hungary wants to ease thefinancial austerity measures placed on the county while the IMF wants Hungaryto maintain its current fiscal deficit targets.

After an early session sell-off, Euro investors shrugged offthe news, triggering a short-covering rally. Technically as we approach the New York opening, themarket is in a position to challenge the psychological 1.30 level. A breakthrough this level is likely to trigger stops and a subsequent acceleration tothe upside. In addition, a rally through 1.3006 will negate Friday’s closingprice reversal top. As long as this top remains intact, however, there is thepossibility of a late session sell-off after traders confirmed the reversal toplast night.

The charts indicate .618 resistance at 1.2998. A break underthe 50% level at 1.2783 is needed to trigger an acceleration to the downside.

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

Disclainer: