U.S. Economic Data Fuels Surge in Euro, Commodity-Linked Currencies

The Dollar declined against the Euro andcommodity-linked currencies after U.S. manufacturing activity showeda surprise improvement last month. This news came unexpectedly and indicated thatdespite calls for a double-dip recession, there were identifiable areas ofstrength in the economy.

The Dollar declined against the Euro andcommodity-linked currencies after U.S. manufacturing activity showeda surprise improvement last month. This news came unexpectedly and indicated thatdespite calls for a double-dip recession, there were identifiable areas ofstrength in the economy.

Today’s down move in the Dollar began lastnight following the release of stronger economic data from Australia and China. Investor appetite for risk waswhetted with the news, triggering a sharp rally in the Australian, New Zealand andCanadian Dollars.

Earlier this morning traders shrugged off aweaker than expected ADP employment report, signaling that the focus would beon growth. The ADP number suggested that Friday’s U.S. Non-Farm Payrolls Reportwill likely be in line with pre-report estimates of 120K jobs loss and anincrease in the Unemployment Rate to 9.6%.

Technically the EUR USD changed the trendon the daily chart to up on the move through 1.2779. This sets up the strongpossibility of a retracement to a major 50% level at 1.2960.

The AUD USD is a big mover at themid-session, posting a strong 1.96% gain. The rally also exceeded a retracementzone at .8995 to .9049. This move sets up a potential rally to a downtrendingGann angle at .9131.

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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