Euro Surges despite Better U.S. ISM Report

The Euro is surging at the mid-sessiondespite the release of a better-than-expected U.S. economic survey. The surprisedecision by the Bank of Japan to ease monetary policy further is alsocontributing to the rally because it almost solidifies the case for furtherquantitative easing by the U.S. Federal Reserve.

The Euro is surging at the mid-sessiondespite the release of a better-than-expected U.S. economic survey. The surprisedecision by the Bank of Japan to ease monetary policy further is alsocontributing to the rally because it almost solidifies the case for furtherquantitative easing by the U.S. Federal Reserve.

Traders for the most part ignored thismorning’s better U.S. ISM services report because they feel that other sectorsof the economy are still weak and need stimulus from the Fed. Investors also discountedrecent reports of additional sovereign debt problems in the Euro Region.

With one central bank actually easing andanother strongly considering easing, the Euro looks like a stronger currencysince the European Central Bank is not considering any change in its currentmonetary policy at this time.

Technically, today’s EUR USD rally negatedMonday’s closing price reversal top which was confirmed overnight but failed.Yesterday I had warned that the reversal pattern could indicate a short-termtop but did not mean a change in trend was taking place.

The chart indicates that the major .618retracement level at 1.3896 is still the main upside target.

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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