Japan Supports Euro Debt Issue

The EUR USD is trading slightlybetter overnight. Technically the main trend is down, but short-term indicatorsare oversold. The fundamentals are the main story this morning however.

The EUR USD is trading slightlybetter overnight. Technically the main trend is down, but short-term indicatorsare oversold. The fundamentals are the main story this morning however.

After briefing breaching support at1.2968 the Euro reversed higher in the Asian market, after Japanese FinanceMinister Yoshihiko Noda said his country plans to buy European FinancialStability Facility debt later this month.

Noda’s efforts seem to be a goodwillgesture, citing the following as the main reason for the investment, “The EuroZone is planning to issue a large amount of bonds in a cooperative manner latethis month to raise funds to assist Ireland, and it is appropriate for Japan,as a major economy, to buy some of the EFSF bonds to bolster confidence” inEurope’s efforts.

Portugal worries continue to weigh on theEuro. On Wednesday they will hold a bond auction that will likely set themarket’s tone for the rest of the week.

Although the Euro is ripe for aretracement rally, the bigger picture suggests the market is still vulnerableto the downside.

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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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