Dollar Mixed; Trader Turn to Stocks for Direction

The Dollar is trading mixed at themid-session. The lack of any fresh economic news is encouraging investors toseek direction from the equity markets. It seems the only market moving withany conviction is the British Pound.

The Dollar is trading mixed at themid-session. The lack of any fresh economic news is encouraging investors toseek direction from the equity markets. It seems the only market moving withany conviction is the British Pound.

The British Pound erased early sessionlosses and opened better in New York following the release of the Bank ofEngland minutes which showed that the Monetary Policy Committee voted 8 -1 tokeep interest rates at historically low levels.

Besides voting to keep rates low, the BoEalso voted to maintain its asset-purchase program at 200 billion pounds. TheMPC discussed both easing and tightening at its latest meeting before votingoverwhelmingly to maintain the status quo.

The recent discussion has been about the U.K. inflation.Some believe that it is too high and not likely to fall back under the BoE’starget rate of 2.0%. Based on the conviction of the BoE members at its lastmeeting, however, it looks as if investors believe what the central bank issaying about the inflation rate easing back toward the target by 2012.

Technically the British Pound found supportearly this morning on an uptrending Gann angle from the 1.4229 bottom afterpiercing a key 50% level at 1.5560. Regaining this level has put the market ina strong position to post a daily closing price reversal today. This patternsuggests the possible start of a 2 to 3 day rally back to 1.5746.

The Australian Dollar is under pressure atthe mid-session. The Aussie weakened after a report measuring the number ofjobs available for skilled workers fell 0.3 percent in August. The decline inthis wage index is a signal that the economy may be cooling, leading to theselling pressure.

Technically, the Aussie may be completing a50% retracement of the recent short-term decline. A failure between .9039 and.9083 could mean a secondary lower top is forming. This pattern could mean thestart of increased selling pressure.

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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