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Masoud : EUR/USD Review 25 Apr 10

Hello Koala King and folks.

Good day to you!

The week started with risk aversion and high yield currencies were sold. Concerns regarding Greece and the problem of Goldman Sachs contributed to the negative sentiments. The demand for European stocks and the value of the Euro suffered as investors were increasingly worries about Greece’s ability to repay her debt obligations.

Greece began negotiations over the aid package by the European Commission and the International Monetary Fund(IMF). Greece in return for this assistance, would be required to implement domestic legislation to reduce the deficit itself. ( such as increasing taxes and cutting costs and this for people of Greece will be uncomfortable and may cause further unrest ) There is great uncertainty and hence without analysis do not buy the Euro.

Finally, Greece requested for a bail out from the European Commission and IMF. Angela Merkel, has defined the conditions for Greece and the pressure will increase and possibly riots. France fully agreed and announced that in the next few days, they will pay their share.

Apple reported earnings better than forecasts, and it improved the risk appetite. Stock indexes in Asia and America rose. Unfortunately for the Euro, because of the crisis in Greece, gains were temporary.

Goldman Sachs announced that earnings were better than forecast. Due to the alleged work that Goldman Sachs had done at the beginning of the crisis, this was sharply questioned by European governments. Apparently in late 2007, Goldman Sachs predicted the housing crisis and the worsening situation in America and took measures to get rid of the holdings in concern.

A point to note is that gold seem to be holding true to the correlation of an increased demand when risk is increasing. Lately, we can see the value of gold raising.

As the G20 meetings are on this weekend, we may have a gap and hence do be careful. In this meeting, they may be discussions on the Chinese Yuan too. Should the EUR/USD rise because of this meeting, i will be looking for opportunities to sell as i believe the effects may be temporary.

From a technical point of view. as I said last week if the daily trend line was broken, we must await the break of TL2. I still believe that the Euro may fall more and 1.28 seems not far from mind.

Have a great weekend.


Masoud is a businessman and a Senior Koala. Connect with him at our page on Facebook.

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