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10/9/2010 - The Current Market Sentiment

Discussion in 'Current Market Sentiments' started by fx-recommends, Sep 10, 2010.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
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    The single currency is still finding support at 1.265 versus the greenback but it is still unable to break above 1.276 after worries about the recent European Stress tests results could contain the market sentiment driving the European yielding curve up bring the doubts about the debt crisis end in the spot which hurt the single currency exchange rate across the broad this week after wall street Journal report highlighted the exposure position of the European major banks to the governmental debts.
    The market focusing has been taken from the European debt crisis consequences since these stress test results which have shown only 7 of 91 failed in these tests focusing on the grow easing pace in US and its potential impact on the Europe countries which got use of weak Euro this year as germane which boosted its exports up with the Japanese yen trading well below 110 versus the single currency and below 15 years low versus the greenback but this week the market has turned back to these results importance to the current debt positions of the European countries especially Greece, Spain, Portugal and Italy comparing to Germany which is still outpacing the economic performance of them driving the European growth outlook up while the actual position in the south of Europe is struggling and is still in need of the ECB and EU commission support and without it the position can exacerbate further. Recently, the ECB language was cheered of the growth rate in the Euro zone and especially in Germany and the restoring confidence in the single currency and its baked securities after the banking stress test results but the market is still unable to forget the single currency massive falling after the ECB report of June by these tests which highlighted the need of 800 billion euros by the end of 2012 suggesting that the European banks are in need to be ready for facing bad loans following the debt crisis which can reach 123 billion euros for 2010 and 2011 to reach 105 for 2011 and for facing the bad loans from 2007 till 2009 they should be ready with 238 billion euros.
    Now, technically, the pressure can come back on the single currency on the breaking of 1.265 opening the way for reaching 1.2586 again. The single currency could get above 1.332 touching 1.333 with the weaker than expected labor report of July release and Trichet's reference to that the debt crisis negative effects on the growth in the Euro zone are easing back expecting it to be better than what was initially estimated welcoming the stress test results which calmed down the markets relatively but with the worries about the possibility of the European following of the US growth slowdown containing of the market sentiment accumulating on the single in August. By god's will, The next major resistances are at 1.293 then 1.30, 1.333, 1.3352, 1.3415, 1.3704 and 1.3885 which is 61.8% Fibonacci retracement level of this same recent declining from 1.5142 to 1.1874 while the supporting levels are at 1.2586 then 1.255, 1.2452, 1.2165, 1.2044, 1.1954 and 1.1875 from 1.1875 which has been reached amid the increased worries about the debt crisis and could cap the pair from falling to 1.16 whereas the pair has started its rally to 1.604 before falling again to 1.233 amid the credit crisis and rising back forming a lower high at 1.515 in the beginning of last December.

    Best wishes

    FX Consultant
    Walid Salah El Din
    E-Mail: mail@fx-recommends.com

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