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The Forex Pattern Price Time Report - EUR USD - Evening Session
By: James Hyerczyk - 27-08-2008
0votesThe EUR USD rallied early Wednesday as traders reduced speculation the ECB would cut rate before the end of the year. Comments from ECB Executive Board Member Axel Weber put an end to the talk that the ECB was considering a rate reduction. In keeping with the ECB mandate to get inflation down to an acceptable 2.5% level, Weber told Bloomberg News that any talk of an interest rate cut was premature. Axel also hinted that the ECB would be watching data until the end of the year before reaching a conclusion. He did not rule out another round of tightening.
Some traders interpreted Weber’s comments as hawkish, however, not enough to trigger aggressive buying. Others thought the comments were right in line with the usual ECB hawkish tone. It looks as if this pair has reached a balance point with both the ECB and Fed considering rate hikes.
Although Weber’s comments provided support throughout the day, a stronger than expected U.S. Durable Goods Report reduced the Euro’s gains. Higher crude oil also softened the Dollar. Traders will be watching crude oil all weekend as hurricane Gustav is expected to threaten a major refinery area. This could trigger another short-covering rally in the Euro. Second Quarter GDP will be released tomorrow. Estimates are for an increase. If there is a surprise this it will most likely be in this report. Everyone has been talking about a global economic slowdown so traders should watch to see if this report confirms the slowdown has reached our shores.
There may be a choppy two-sided trade tomorrow. A rally in crude oil would support the EUR USD, but a friendly GDP could curtail gains.
Next Analysis: The Forex Pattern Price Time Report - USD JPY - Evening SessionContent 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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