Risk Shift Triggers Asset Liquidation Boosting U.S. Dollar

The U.S. Dollar rose against the EUR USD and GBPUSD as worries about Portugal’sability to finance itself increased and demand dropped for risky assets andcommodities.

The U.S. Dollar rose against the EUR USD and GBP USD asworries about Portugal’sability to finance itself increased and demand dropped for risky assets andcommodities. The shift in risk sentiment is expected to continue as long asissues about peripheral countries in Europepersist. Traders are not waiting for confirmation, but instead are reacting tothe news as a precaution.

The weak close has put the Euro in a position to turn themain trend down on the daily chart. Watch for a break through the last swinglow at 1.3698 go trigger an acceleration to the downside. The chart indicates abreak to a major 50% level at 1.3434 is likely over the near-term.

The British Pound broke sharply on Tuesday into aretracement zone. The last main range is 1.5650 to 1.6298, setting up aretracement zone at 1.5974 to 1.5897. Uptrending Gann angle support is at1.5950. This angle moves up to 1.5970 on Thursday. This forms a support clusterat 1.5974 – 1.5970. A test of this cluster could attract new buyers.

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: