Hello koala king and folks.
Good day to you.
G20 finance ministers at their last meeting on the stability of the banking system and financial markets around the world agreed that a bold plan is needed. The World Bank and International Monetary Fund IMF after its meeting Friday said in a statement that with regards to the debt crisis in the euro area, they will act decisively to protect the global economy. However there was no specification on whether if more capital will be injected into the world economic system.
Both the richest and most indebted countries in the euro zone again urged more cooperation to save the crisis of the Greek economy. Angela Merkel, German chancellor mentioned that Germany stands ready to assist Greece in anyway possible. In the meanwhile, the Greek parliament passed a new law to obtain property taxes.
Since the beginning of September, with investors worried about the debt crisis in the euro area and the future world economic growth, the US dollar was facing increased demand and prices in the foreign currency exchange market are reflecting that. The US dollar is still considered to be bullish.
The German parliament votes overwhelmingly to help fund the strengthening of the euro area. The vote in Parliament is also seen as a test for German Chancellor Angela Merkel’s authority. In the new scheme, Germany will increase the supply of funds from 123 billion euros to 211 billion euros. Having said so, many Germans are opposed to granting financial assistance to countries in crisis such as Greece.
It was reported that Morgan Stanley Bank stated that circulation transactions reflect an unprecedented buying of US dollars and pounds GBP. Data flow transactions which are collected by the bank Morgan Stanley suggested that trading volume in US dollars and pounds GBP in the last week broke the record and has the highest level.
From a technical perspective:
As I said in the last Midweek analysis and as per expected, the EUR/USD continued to fall. Also this week according to the prevailing fundamental conditions of the market, I believe the currency pair will continue to fall and as long as the EUR/USD is below 1.3750 level, the main trend is bearish. As you can see in the above picture, the EUR/USD after slightly rising and touching line A, it continued to decline. I am still waiting for the currency pair to touch FIBO 261%.(1.3250).
Have a great weekend.
Masoud is a businessman and a Senior Forex Koala. Connect with him at our page on Facebook.
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