Aussie Close over Parity

The Australian Dollar closed over parity onThursday, setting up the potential for an acceleration to the upside. With boththe Reserve Bank of Australiaand the U.S. Federal Reserve moving in opposite directions, it seems that onlyoverbought technical conditions could top this market at this time. The key tosustaining this rally is holding 1.00. A break back under this level couldsignal a short-term setback.

The Australian Dollar closed over parity on Thursday,setting up the potential for an acceleration to the upside. With both theReserve Bank of Australiaand the U.S. Federal Reserve moving in opposite directions, it seems that onlyoverbought technical conditions could top this market at this time. The key tosustaining this rally is holding 1.00. A break back under this level couldsignal a short-term setback.

The currency pair to keep an eye on is the USD JPY. Thesideway trading action the past few days indicates impending volatility. Eitherthe Dollar/Yen is going to blow through the low with conviction or the Bank ofJapan is going to intervene. The longer this market stays inside of a tightrange, the bigger the move will be once it clears either support or resistance.

The Fed did nothing to convince traders that a bottom isnear for the Dollar. This means the resumption of the downtrend. Unless theDollar Index can produce a weekly closing price reversal up, continue to lookfor weakness.

Strong economies are likely to continue to drive supportinto the Euro and British Pound. Demand for higher risk assets should keep thebulls happy in the Australian, New Zealand and Canadian Dollars.

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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