Euro Rallies into Key Fibonacci Retracement Level

The Dollarfell overnight against most majors as investors continued to weigh thepolitical situation in the Middle East and North Africa.The lack of fresh news from these regions encouraged traders to lighten up safehaven positions placed in the Greenback over the past few days.

The Dollarfell overnight against most majors as investors continued to weigh thepolitical situation in the Middle East and North Africa.The lack of fresh news from these regions encouraged traders to lighten up safehaven positions placed in the Greenback over the past few days.

Upsidepressure helped drive the Euro back above 1.37 overnight, taking out three daysworth of highs. Standing in the way of further upside action is a majorFibonacci retracement level at 1.3744. The Euro turned around on Tuesday afternews reports suggested the European Central Bank was likely to put inflationconcerns back into their March 3 policy statement. This action may be proofthat investors have pushed aside the situation in the Middle East for the time being and are focusing on economic developments.

Followingthe release of the Bank of England minutes, the British Pound rallied to withinstriking distance of its February 3 top at 1.6278. With upside momentum building,don’t be surprised by a breakout over this level.

Traders arereacting to the news that the BoE minutes revealed a hawkish 6-3 split. Thereport shows that despite another vote to keep interest rates low, policycommittee members may be getting ready for a rate hike should the economycontinue to show signs of picking up after an unexpected fall in GDP at the endof 2010.

For furtherinformation on this and other Pattern, Price & Time products visit ourwebsite at http://patternpricetime.com.

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: