Euro Rebound after Nearly Changing Trend to Down

The EUR USD finished down on Monday after rebounding fromits low following early session weakness. The initial break in Monday’s session was follow-through sellingfollowing Friday’s closing price reversal top. This down move was short-livedbecause a not so friendly U.S. Industrial report triggered a short-coveringrally which lasted most of the day.

The EUR USD finished down on Monday after rebounding fromits low following early session weakness. The initial break in Monday’s session was follow-through sellingfollowing Friday’s closing price reversal top. This down move was short-livedbecause a not so friendly U.S. Industrial report triggered a short-coveringrally which lasted most of the day.

Besides the short-covering rally, nothing happened thatwould change the developing bearish reversal formation. As long as last week’stop at 1.4159 remains intact, this market could begin a correction which takesit back to 1.3373 to 1.3187.

The last swing bottom is 1.3775. A break through this levelwill turn the main trend to down. It could also trigger the start of anacceleration to the downside.

Shortly after U.S.equities closed, IBM and Apple Computer, Inc disappointed traders, sending U.S., stockindex futures lower. Traders may use this weakness as an excuse to book profitsin their long Euro positions. Weakness in the stock market could also fuel abreak in the EUR USD because it may lead to liquidation of higher risk assets.

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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