U.S. Dollar Rises as Investors Take Risk Off

The U.S. Dollar is rising sharply at the mid-session as risk aversion is back on following a surprisingly weak U.S. jobless claims report.

The Euro is now trading lower after a weak attempt to rally after the bearish U.S. report and on the heels of a better than expected forecast for German economic growth.

The U.S. Dollar is rising sharply at the mid-session as risk aversion is back on following a surprisingly weak U.S. jobless claims report.

The Euro is now trading lower after a weak attempt to rally after the bearish U.S. report and on the heels of a better than expected forecast for German economic growth.

Technically the Euro is still rangebound amid confusion by traders. Buying and selling interest appears to be even as the bulls want to buy Euros on speculation of renewed strength in the Euro Zone economy but the bears feel the need to sell because of a dim outlook for the global economy.

The charts indicate impending volatility but the direction of the next move is not clear. A breakout to the upside is likely to be met with selling pressure at 1.3033 to 1.3104. A breakdown through support could trigger a downside acceleration to 1.2605 to 1.2433.

The British Pound received a boost this morning following a better than expected U.K. retail sales report. This rally died, however, short of a breakout above the recent high at 1.5701 and after sentiment shifted away from risky assets.

Technically, the Sterling is trapped between a pair of 50% levels at 1.5560 and 1.5635. Major support is being provided by an uptrending Gann angle from the 1.4229 bottom at 1.5529 today. A close under this angle could trigger a tremendous downslide.

The USD JPY started the day in a potentially bullish position as it tried to build support inside of a retracement zone at 85.36 to 85.55. At one time today, it looked as if the Dollar/Yen was readying to breakout above the last swing top at 86.37. This move would’ve changed the daily trend to up.

This pair sold off sharply after the U.S. released a surprisingly bad weekly initial claims report. U.S. equities sold off on the news, triggering a flight to safety rally in the Japanese Yen. Unless this market can regain the retracement zone, look for 84.73 to fail.

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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