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Masoud : Midweek EUR/USD Review 18 Jan 11

Hello koala king and folks.

The most important events of the past two days:

Commodity prices in the euro area in December 2011 fell versus the year before. The annual inflation rate of the 17-nation euro zone dropped 2.7 percent this month and it was lower than was anticipated. 

Rating agency Standard & Poor’s gave the financial rescue fund for Europe a reduced rating. The ratings agency last week reduced the ratings of nine European countries, including France and Austria. Some European Union officials were critical of the ratings agency Standard and Poor’s.

Mario Draghi, president of the European Central Bank ECB mentioned it is essential that the commitments by the heads of state is obtained that actions to resolve the crisis is fully implemented in the least possible time.

China’s economy dropped to its lowest growth rate in the past two years. According to figures released by the Chinese government, China’s GDP in the three months leading up to the end of last year was 8.9 percent and it was 0.2 percent less than it was three months ago. Although the figure of 8.9 percent economic growth in China is higher than many other economies, the decline is of concern to Chinese officials.

On the other hand with the construction boom in this country, the Chinese government is concerned about the uncontrolled growth of this industry. After America, China is the world’s second largest economy.




From a technical perspective: The EUR/USD is still within the downtrend channel. While the currency pair is not out of the channel the main trend is bearish. The EUR/USD has already reached the ceiling of the channel and here is a high-traffic area which suggests the presence of resistance. Everything is clear in the above picture. But if the EUR/USD could break the channel and close above 1.2880, it is a sign of the change trend.

Have a nice time.

Masoud.

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