Good day koalas!
Yesterday, we saw the EUR/USD dip to the 1.3600s due to apparent risk aversion.
Investors were concerned when reports indicated a drop in foreign demand in US securities. Furthermore, there was apprehension towards any potential curbs to be taken by China and India with regards to their economic growth.
Looking at the EUR/USD, it is recovering from yesterday’s bear attack. It is currently testing the resistance of 1.3740.
On a similar note, the S&P 500 is once again bullish. Positive sentiment with regards to the US economy is apparently strong.
Oil is currently trading at $80+. This again suggests that the risk appetite is strong today.
Gold has risen to $1120+ at the moment.
The EU moves closer to having a drawn up plan of aiding Greece in the event of the failure of deficit cutting measures implemented by the Greek government. While investors are probably happy to hear this, we have to look deeper into the situation.
I always believe that the Greek problem won’t be solved easily. Concerns will probably surface with regards to the setback of the Euro Zone’s economy if the aid is required. Furthermore there were different views in the discussion so far on how the aid will be implemented. April and May will probably be testing times as debt redemption of a total of more than 20 billion euros is due for Greece.
Another possible reason for the positive sentiment may be the German ZEW Economic Sentiment coming in slightly better than expected. Furthermore, US Building Permits and Housing Starts came out close to their estimates. Home Sales create much economic activities and hence investors often appreciate a stable or positive housing outlook.
A report stated that economic officials from the Obama administration said today that the unemployment rate will probably not go much lower than the current 9.7% due to the economic outlook. We know that jobs drive consumer spending which in turn drives the economy and hence this unemployment problem in US may be an anchor dragging the recovery.
Folks, Federal Fund Rates will be up next and hence do be careful. Even if nothing unexpected happens, investors will scan, read, magnify, speculate, worry, etc etc over the accompanying statement release and hence be careful!
Tomorrow brings us important news such as the US Producer Price Index as well. Stay focused, alert and plan your trades well.
Bullish momentum may bring us to 1.3800/80.
A bearish comeback may see 1.3680/00.
Koalas! I added a site map for your convenience! You will find a list of articles i wrote over the year and more. Hopefully this will help in your navigation around TheGeekKnows.com .
I need to go meet Ms Sleep now. Feeling a little cold lately. I hope it is not the flu bug.
Trade Safely. ( Remember ! Add me on facebooook !! )