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EUR/USD Weekly Review 29 Mar – 2 Apr 10

Good day Koalas. I hope you are enjoying your weekend so far.

In the previous review, we noted that the Greece deficit crisis continued to haunt the Euro. A downgrading of Portugal’s debt around midweek by Fitch Ratings triggered alarms and the EUR/USD broke through a few supports. Many traders were caught by this move and this is yet another reminder that we must always plan our trades well.

Late week, reports started to surface with regards to the leaders of the European Union agreeing to mix of IMF and Euro Zone led aid for Greece. Risk appetite increased.

I cautioned that we need to monitor the Greece deficit crisis for adverse developments.

This week saw the EUR/USD in a tug of war, a result of various market developments.

Early week, the bullish momentum from the previous slows to a trickle. While investors were relieved to see an agreement of sorts between the leaders of the European Union with regards to a combined IMF and Euro Zone aid package for Greece, trouble was just around the corner.

The managing director of the IMF said that if a loan is needed for Greece, it will be on IMF’s terms with no special privileges. This is opposite of what the leaders of the European Union hoped to achieve. They would want to maintain control over the process. In the meanwhile, Greek bonds offerings suffered from a low take up rate.

Late week, the Greece deficit crisis took a negative turn as Greece bond yields increased. This indicates that the market is demanding more of a premium to hold her debts due to a possible lack of confidence.

On Friday, the US Non Farm Payroll came out lower then expected. However this is the biggest gain of jobs in 3 years and investors welcomed the release. The aftermath saw the EUR/USD dropping through the chart, in favor of the US Dollar.

However as i was saying, there are a couple of points we need to consider.

As the March increase included 48,000 temporary workers hired by the US government to assist in the 2010 census, these workers will once again join the ranks of the unemployed when the project is over.
Furthermore in view of the bigger picture, the US unemployment rate remains at 9.7%. A high figure unhealthy for the economy.

A report came out late week with regards to China Central Bank’s view on the global economy. It believes that the rapid asset price increases since 2009 is caused by the extremely loose monetary policies of the major economies. This is dangerous as these speculative may burst. This may be a challenge as a balance needs to be sought. The containment of speculative bubbles must not come at the expense of the economy’s recovery. Risk aversion may happen if China tightens it’s monetary policy as investors are looking towards China to lead the global economies out of the recession.

On another note, i would also like to remind everyone once again that the Euro zone crisis is far from a simple fix. With Greece, Portugal and now Iceland implicated, who knows what the future holds.

Next Monday is a holiday for a number of major economies and hence we may see a lower volume. Nonetheless, we have a couple of important news from the US, including the Pending Home Sale. The rest of the week brings us other news such as the EURO Minimum Bid Rate and various speeches by important people including Fed Chairman Bernanke. You can find the list of the various economic releases in the Economic Calender below.

Last week, the EUR/USD stayed true to our range, capping at the test of 1.3600. We may see a range of 1.3300 – 1.3700 this week. However as usual, adverse developments may affect the range.

Trade safely and remember that proper money management is important.

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Read more about the EUR/USD at my buddies’ wonderful blogs.

Forex Crunch writes a weekly EUR/USD outlook. It is a very popular write up and he is one of the best.

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EUR/USD Weekly Review 22 Mar – 26 Mar 10

Good Day koalas.

I hope your weekend is well so far.

In the previous EUR/USD Weekly Review, we saw France and Germany disagreeing on the method of aid solution for Greece. Over in the US, despite the apparent positivity, a close look into the US economy shows the sign of a fragile interior.

I mentioned that we should look out for 1.3455+/-. A break of that will open up a new range of downside exposure.

Let us look at the EUR/USD and it’s current status.

Indeed 1.3455+/- failed and the currency pair went as low as the upper 1.3200s.

For most of the week, the Greece deficit crisis continues to haunt the Euro. A downgrading of Portugal’s debt around midweek by Fitch Ratings triggered alarms and the EUR/USD broke through a few supports. This may have caught many traders by surprise but if you have been following the reviews here on TheGeekKnows.com, you will know that the Euro Zone is not in a good shape. Besides Greece, countries like Spain and Portugal have their own firefighting to do.

Nonetheless, investors at the slight of a downgrade of ratings, probably rushed to exit risky positions, particular Euro based ones and seek the safety of “safe assets.” Risk aversion was strong.

Late week, reports started to surface with regards to the agreement of a mixed of IMF and Euro Zone led aid for Greece. Furthermore, the ECB decided to back down from it’s decision with regards to emergency lending rules. This will ensure that should Greece suffers a downgrade of it’s ratings to that comparable of a company, its bonds won’t be cut off from ECB’s refinancing operations next year.

This brought relief to investors and it probably caused the EUR/USD to climb back above 1.3400.

Having said so, i am saddened indeed. I had koalas writing to me saying that they had suffered a margin call. They stacked buy orders along 1.3400. Got stopped out when the price dips but now they are dismayed that it is back above 1.3400.

Dear koala readers. I have said before many many times. I have suffered 3 margin calls before and i know the pain. NEVER NEVER risk excessively. PLEASE! Forex is not an express ticket to riches. Hard work, patience and discipline must be there. Please plan your trades well and practice proper money management.

Over in the US, sentiments continued to be positive. The S&P 500 was relatively unaffected by the woes of the Euro. It remained above 1160 and that may be a sign of a bullish sentiment. Having said so, once again i urge everyone to have an open mind. We must not forget that the US is far from being out of the crisis. Home Sales which is good for the economy remains low and the unemployment crisis of the US is not over. The US’s massive deficit is still ticking time bomb.

Just in today, a report stated that China’s bank regulator ordered lenders to take more care when making real-estate loans as it attempts to increase its efforts to prevent speculators from causing asset bubbles and debt troubles. Once again being the second largest economy in the world, this may spark concerns with regards to a derailing of the global recovery and hence do keep an eye on this development.

Needless to say, next week’s price action will also be on the cues of the Greece deficit crisis. Investors will be looking at how this new apparent agreement on a mixed IMF and Euro Zone aid solution works out.

Next week brings us many economic data on both sides of the Atlantic including the US Non Farm Payroll. The NFP release on Friday coincides with a few Euro banks’ holiday and hence the lack of liquidity may bring surprises. You can find the list of the various economic releases in the Economic Calender below.

I am looking at a range of 1.3200 to 1.3600. However as we all know, exceptional developments may tip the scale and hence be on the lookout.

Trade Safely.

Read more about the EUR/USD at my buddies’ wonderful blogs.

Forex Crunch writes a weekly EUR/USD outlook. It is a very popular write up and he is one of the best.

Winners Edge Trading with his great technical analysis brings about much knowledge to learn.

Invest In Yourself And Get Premium Analysis
Less than 20 cents a day
Major Currency Pairs Analysis
Forex Sentiment Analysis
Understand The Market
10 days money back guarantee

View Subscription Options

Would you like to connect?
Get notifications on new forecasts and articles.

Sign up to our emailing list and get your FREE Stop Losing and Start Winning in Forex Checklist!

Trending Forex Articles

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