Investors Shedding Risk; Pressure on Commodity-Linked Currencies

Earlier this week the Australian Dollar failed to breakoutto the upside and is now threatening to freefall to a major 50% price level at.8644. Investors are worried about tomorrow’s election. The polls are showing adead heat which is complicating matters for investors. Key issues includemining company taxes, tightening the budget, and slashing the deficit. Thechart indicates the Aussie could plunge to a major 50% price level at .8644.

Earlier this week the Australian Dollar failed to breakoutto the upside and is now threatening to freefall to a major 50% price level at.8644. Investors are worried about tomorrow’s election. The polls are showing adead heat which is complicating matters for investors. Key issues includemining company taxes, tightening the budget, and slashing the deficit. Thechart indicates the Aussie could plunge to a major 50% price level at .8644.

The New ZealandDollar has formed a new lower top at .7191. Lower demand for risky assets, thethreat of a slow down in the global economy and worries about the Australianelection are pressuring the Kiwi this morning. The charts indicate more room tothe downside with .6977 to .6879 the next downside target.

The Euro broke sharply lower after European Central Bankmember Axel Weber said the ECB should help banks through end-of-year liquiditytensions before determining in the first quarter when to withdraw emergencyleading measures.

Traders sold off the Euro because this comment is beingperceived as a sign of weakness. Many investors were pricing in the possibilitythat the ECB would begin its exit strategy before the end of the year. Shiftingthis outlook to the first quarter is encouraging investors to slash longpositions today.

The downtrend resumed overnight in the Euro when it crossedthe last swing bottom at 1.2732. A new main top was formed at 1.2921. Based onthe main range of 1.1876 to 1.3334, look for a minimum break to 1.2605.

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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