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25/2/2010 - The Current Market Sentiment

Discussion in 'Current Market Sentiments' started by fx-recommends, Feb 25, 2010.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
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    The single currency is still finding support at 1.344 versus the greenback. The single currency which could close hardly last week above 1.36 could not break above 1.37 amid disappointing IFO germane business climate index falling to 95.2 in February from 95.8 in January while the market was waiting for 96 and slump of US consumer confidence of February to 46 from 55.9 as the market was waiting for 56 which underpinned the risk aversion sentiment and demand for the greenback from another side. The pair has made a new lower low at 1.3445 last Friday whereas the same bottom of last May. We have mentioned earlier that the pair can meet a support at this area in our previous reports which is still forming a support can be followed by 1.29 whereas the pair higher low of its rally reaching 1.513 in the beginning of last December while the next main resistance is still at 1.384 followed by 1.40 psychological level.

    The commodities and the energy prices have suffered too versus the greenback with worries about the economic growth stability which triggered after the data from another side. The data was not encouraging as the weak consuming can has negative impact on other sectors and the labor market as well which is already suffering form a sluggish demand.

    The market has not found new clue of further tightening action in Ben Bernenke's semi annual testimony in front of the house yesterday which could tackle the greenback progress for a while but the pressure has accumulated again on the single currency with the market focusing on the Greek debt and the worries about the other European countries sovereigns debt. As The required deficit to the growth ratio is below 3% while it's now above 12% in Greece and the solution is not looking coming soon at the current struggling growth rates which resulted from the credit crisis as even the ECB could not stop any of its accommodative easing actions worrying about the current nascent recovery until now which can put more pressure on the reforming plans in Greece from another side and the forex market is still keeping the pressure on the single currency as it has been realized that there is no bailing out plans currently from the other EU members to help Greece to sustain its debt at the current low levels of growth in the Euro zone satisfied by just the political underpinning waiting for reforming signs from Greece in the coming 30 days!

    God Willing, it is still important tomorrow to wait for US Q4 Preliminary GDP reading to be 5.5% from 5.7% in the first reading and US February Chicago PMI which is expected to be 60 from 61.5 in January and also February University of Michigan Confidence final reading to be 74.3 from 74.4.

    Best wishes

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

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