U.S. Dollar Losing Ground Ahead of ADP and ISM Services Report
James Hyerczyk from ForexHound.com at 11/04/09
The U.S. Dollar is trading lower against most currencies with the exception of the Japanese Yen as stronger equity markets in Europe and Asia helped drove up demand for higher yielding assets. Trading was thin overnight and is expected to remain that way until the Fed FOMC announcement later in the day. The first order of business today that traders will react to are the ADP Employment Report and the ISM Services Report.
The EUR USD is trading higher but inside of yesterday’s range. The market is also trading inside of a retracement zone at 1.4776 and 1.4707. A downtrending Gann angle at 1.4783 is providing resistance while an uptrending Gann angle at 1.4710 is the support. The tight range indicates impending volatility. It suggests that traders should go the way of the move once this market breaks out of the range.
The GBP USD is trading higher. Yesterday, this currency pair could not break a swing bottom at 1.6250 and turned around late in the day. Overnight this market is in a position to take out the recent swing top at 1.6603 to resume the uptrend. The October top at 1.6691 would then be the next upside target. Gann angle support is at 1.6346. Gann angle resistance comes in at 1.6531 and 1.6611.
The trend is down in the USD JPY but this market is showing strength overnight due to greater demand for higher yielding assets. Thin trading conditions are keeping this pair in a tight range between a pair of retracement levels at 90.75 to 91.12. Currently this market is sitting on a downtrending Gann angle at 90.82. A breakout over this angle indicates a move to 91.57 is likely. Up trending Gann angle support is at 90.49.
The trend is up in the USD CHF but the market is trading in a tight and narrow range inside a retracement zone at 1.0242 to 1.0292. Up trending Gann angle support comes in at 1.0192. A downtrending Gann angle at 1.0332 stopped the rally yesterday.
The USD CAD is trading weaker. The chart pattern and downside momentum suggests this market should correct to 1.0522 to 1.0446 over the near term. Up trending Gann angle support is at 1.0446. Downtrending resistance is at 1.0710.
The AUD USD is still trading inside of Monday’s range of .9121 to .8905. The longer its stays in this range the greater the volatility will be when it finally breaks out. Support has been established at a 50% price at .8948. The chart pattern suggests a rally to .9117 to .9129 is likely.
The NZD USD is also trading inside of Monday’s range. The chart suggests a possible breakout over .7267. If this occurs, then look for upside momentum to take the market to .7358 to .7423.
