Euro Rebounds on Renewed Asian Interest; Ireland Debt Still Concern

The Euro rebounded against the Dollar after early sessionweakness as Asian traders saw value and bought on the dips. The rally may beshort-lived however as selling pressure may return amid concerns aboutperipheral Euro Zone debt.

The Euro rebounded against the Dollar after early sessionweakness as Asian traders saw value and bought on the dips. The rally may beshort-lived however as selling pressure may return amid concerns aboutperipheral Euro Zone debt.

During a choppy trading session, the Euro fell into anuptrending Gann angle at 1.3838 before reaching its final bottom at 1.3823.Fresh buying from Asia and the Middle East mayhave stopped the slide, encouraging shorts to cover positions.

Traders may be turning bearish on the Euro because ofincreased concerns over sovereign debt issues in peripheral countries in theEuro Zone. The cost of protecting government debt against default in Ireland, Portugaland Spainhas risen substantially in the past week indicating fear and risk may bespreading.

After a strong rise in the Euro because of the Fed’squantitative easing move, a more risk-averse environment may be forming,favoring a rebound in the Dollar, strength in the precious metals and apotential corrective break in equities and commodities.

Technically, the Euro is still in an uptrend on the dailychart as long as the bottoms at 1.3698 and 1.3733 continue to hold. Overnightthe EUR USD found support on a Gann angle at 1.3838. The ensuing short-coveringrally may pull the market up to a retracement zone at 1.3698 to 1.3733. If thismarket is topping, then sellers are likely to re-emerge in this zone, thusforming a secondary lower top.

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

Disclainer: