U.S. Dollar Rebounding Slightly at Mid-Session

Oversold conditions and rumors of possibleAsian market intervention are helping to boost the U.S. Dollar off of its lows.

While the Dollar continues to be drivenlower on speculation of another round of Federal Reserve quantitative easing,traders are watching technical indicators for any excuse to book some profits.

Oversold conditions and rumors of possibleAsian market intervention are helping to boost the U.S. Dollar off of its lows.

While the Dollar continues to be drivenlower on speculation of another round of Federal Reserve quantitative easing,traders are watching technical indicators for any excuse to book some profits.

Early last night the Greenback fell sharplyafter Singapore’scentral bank surprised markets by effectively tightening monetary policy. Thismove brought light to the fact that while some central banks in the worldbelieve their economies are strengthening enough to warrant a tightening, theU.S. Federal Reserve stands ready to provide liquidity to the U.S. ailingeconomy.

The Dollar was weaker across the boardearly in the trading session. The EUR USD surged to its highest level in closeto nine months before backing away. The Dollar/Yen fell to a 15-year low andshowed few signs of a recovery. Overnight the Canadian Dollar reached parity withthe Greenback. Early during Thursday’s session the Aussie Dollar was pressingparity as it rose to its highest level since the 1980’s.

Since everyone seems to know thefundamental story at this time, the technical indicators could begin to carry alittle more weight in the short-run. This could mean a “backing and filling”trade in the direction of the main trend. I believe the best technical tool atrader must have at this time is a trend indicator. Keep an eye on your changein trend levels and don’t panic if short-covering drives up the U.S. Dollar inthe short-run.

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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