Euro Soars as Traders Express Relief Over Bank Capital Agreement

The Euro is up over 1% against the Dollaras an agreement by global regulators on the size of a bank’s capital reservesfueled trader appetite for risk.

The Euro is up over 1% against the Dollaras an agreement by global regulators on the size of a bank’s capital reservesfueled trader appetite for risk.

Over the week-end, global banking regulatorsagreed to close to triple the size of capital reserves that banks must holdagainst losses. The requirement, however, is not expected to kick-in until 2019which took the pressure off banks to begin increase capital immediately. Thenew regulation also gives the banks time to raise the new capital requirementthrough earnings rather than through the shifting of current capital.

The EUR USD is trading sharply higher atthe mid-session after piercing a downtrending Gann angle which has been holdingthe market back since August 6. Upside momentum is strong but has to continueto build in order to reach the next chart objective at 1.2960.

The size of the support base built recentlyand the three bottom formation at 1.2587, 1.2625 and 1.2644 suggests thismarket has a strong chance to break out over the last swing top at 1.2919 andreach a .618 price level target by September 16.

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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