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Euro Weakens on Slow European Economy

By:   James Hyerczyk
  • 24-07-2008
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The EUR USD continued lower for the week as business confidence dropped in Germany.  Speculators reduced positions in anticipation of the ECB leaving rates unchanged at its next meeting.

On Thursday, the IFO Institute said its German business climate index dropped to 97.5 in July, down from 101.2 last month.

Bund traders immediately started to buy back positions that were initiated in anticipation of an interest rate hike.

The charts indicate this market is going to go after stops under the last main swing bottom at 1.5610.

After this break, the pair may find support at a retracement price at 1.5583.

There are two up trend lines which have to be penetrated before this break takes place.  These angles are at 1.5662 and 1.5647.  Down trending support is at 1.5718 and 1.5878.

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Content Provided by:
James Hyerczyk

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association.

Mr. 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.


DISCLAIMER:
Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from James A. Hyerczyk and J.A.H. Research and Trading or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.


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