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EUR/USD Daily Review 26 Apr 10

Good Blue Koalas!

Yes. You read it correctly.. it is the Monday blues. I just had a great conversation with a koala reader who said that being humorous in my articles always made him smile. So i thought.. how about being irritating for a change? NAH 😛

We finished last week on a high note. After reaching the depths of 1.32+/- the EUR/USD bounced off like a game of ping pong. Greece requested for a bail out! I warned that strikes still threaten the aid process and the EU and IMF conditions have yet to be determined. If the conditions are deemed unacceptable by the market, we may see more risk aversion. This is probably a short term solution and there are more work to be done to solve the Greek deficit crisis.

The week begin with a small gap down after the G20 meetings over the weekend. After the previous EUR/USD gap, this seems nothing compared. However this old nag koala here wishes to remind again that a forex gap may ruin your day and hence know all about it. Read the article on forex gaps.

The S&P 500 continues it’s bullish momentum. Probably encouraged by the good home data last Friday.

Oil is trading around $87 for now. Going above $90 and holding there may indicate a new phrase of economy recovery as oil can be a clue for the economy’s health.

Gold in the meanwhile stays around $1154+/-.


Where is the Shikansen north you wonder?

Derailed for now. The Greek deficit crisis comes to play again just when i warned about it last Friday! With the bail out requested, there comes concern that Germany may not release the funds just as yet. Indeed there is a report stating that the German Chancellor mentioned that she won’t release Greek aids funds until the country displays a “sustainable, credible” plan to cut the budget deficit and a final decision may be in a “few days.” This is a cause for concern as the debt redemption is approaching.

The chancellor further said that Germany would aid Greece only after she agrees to take “tough” measures for the next several years. While this is probably the right thing to do for anyone, Greece faces a dilemma. Her citizens are unhappy that they are made to bear the consequences of a financial policy gone wrong. Strikes are happening and more may be on the way if more budget cuts are done in the sensitive areas. Greece’s fragile economy will be further tested.

Across the Atlantic, the US New Home Sales came in better than expected. Although home sales may be good for the economy, this figure may be a result of a last minute rush to enjoy a tax credit. If indeed so, future numbers may be less impressive.

As today is light on news, we can see the various support and resistance lines in play. Do note that ECB President Trichet is due to speak soon in New York and hence be careful of unexpected spikes. Tomorrow also brings us data releases such as the GfK German Consumer Climate, US CB Consumer Confidence and a testimonial by Fed Chairman Bernanke.

Bullish momentum may bring us to 1.3660/400.

Should risk aversion grow stronger, we may see 1.3285/200.


Wow! I worked hard on the articles over the weekend and today like a koala bee. No Monday blues here for me though as i love writing and sharing my opinions to you koalas! Harvest well and be green for the week alright?

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