Masoud EUR/USD Forecast 24 Sep 12


 

Hello koala king and folks.

 

Good day to you.

Portugal sold bonds on Wednesday and the two billion euro sold was higher than the predicted rate. The returns over the period April declined.

Following the announcement of the new policy of the Central Bank of Europe’s massive purchase of government bonds of the countries involved with the debt crisis in the euro area, ten-year Spanish bonds trading indicators indicates that the demand has grown substantially.

A market analyst mentioned that over the past two months after a speech by the ECB chairman in July, the interest rate on the Spanish debt was reduced by two to three percent and of which during Wednesday and Thursday, faced with unprecedented demands to buy the securities.

On Friday it was announced that a stress test was being considered for the Spanish banking system to measure stability and strength to deal with the debt crisis. The results of which will be released on 28 September. Experts are predicting that the results of this test may suggest the need to increase the fifty-billion-euro aid to up to sixty billion euros.

Market Research in its latest report warns that due to the decline in financial markets and international concerns, the euro area remains in a deep recession. According to the Associated Press, in the nearly three years since the euro zone debt crisis is ongoing, European leaders has yet to put an end to this unprecedented crisis and they have not got a common solution.

Indicators of economic activity and trade in the euro area during the month of September has been low in the past three years. The central banks of Europe at its most recent meeting decided that the benchmark interest rate remains unchanged at 0.75%. A new program of bonds purchase of the euro zone was launched. This together with the announcement of further monetary easing in America is probably the cause of much of the increase in the euro’s value against the dollar in recent weeks.

 

EUR/USD Chart

 

Technical perspective:

The main trend is still bullish in terms of technical analysis and as long as the EUR/USD holds above 1.2850, the main trend is still bullish. If the EUR/USD closes below 1.2750 it is the first sign of a change in trend. The other side of the 4-hour time frame, the EUR / USD is in an uptrend channel and now EUR/USD is at the bottom of the channel.

Have a great weekend.

Masoud.

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