CASH YOUR PIPS FOR BEER DAY!!!!
Yes. This is my usual form of greetings for Friday. I hope you like it.
Yesterday brought us more concerns with regards to Greece. This manifested itself in the form of widening premium of yield demanded on her bonds versus Germany’s. The EUR/USD also tested a technical strong line of 1.3285 and bounced off it.
Lets begin the Friday review.
Looking at today’s EUR/USD, 1.3285 did indeed prove to be a strong line. The currency pair developed a bullish momentum.
In the meanwhile, the S&P 500 continues it’s bullish ascent. Hitting 1200 soon, this is a positive indication of the confidence towards the US economy.
Oil is back at $84+ for now.
Gold continues to climb. It is currently trading at $1161+.This may be an indication of risk adverse investors stockpiling on the precious metal due to risk aversion. Gold is probably an investment of choice during times of uncertainty.
Greece’s debt ratings was cut to the lowest investment grade by Fitch Ratings today. With such a crucial news in mind, one would have expected the US Dollar to soar big time due to extreme risk aversion.
This did not happen and this is why we must always be diligent in our forex trading.
A European Commission spokeswoman said that the Euro Zone stands ready to provide Greece with assistance. Furthermore, report states that the Euro zone deputy finance ministers and senior central bankers have decided on the terms of how emergency loans to Greece should be if the need arises. This appears to come across to investors as a more concrete form of action than the usual “words of support.” As Greece requires 11.6 billion euros to fund the debt redemption before the end of May, this possibility of concrete action comes as a relief.
Hence the knee jerk reaction that we saw brought the EUR/USD down to 1.3285+/- unwinds. Having said so, the future is unknown and should the differences between Germany and France on the aid mechanism surface again, we may see risk aversion.
Bullish momentum may bring this pair to 1.3500.
Bearish drops may target 1.3400.
Alright. Thats it koalas! Another trading week comes to a close. I hope everyone finishes green this week. Stay tuned for the EUR/USD Weekly Review tomorrow!
Cya and trade safely!