1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

EUR/USD Daily Commentary for 2.24.09

Discussion in 'Fundamental Analysis' started by FastBrokers, Feb 24, 2009.

  1. FastBrokers

    FastBrokers New Member

    Feb 23, 2009
    Likes Received:
    Los Angeles
    The EUR/USD sold off on Monday, exercising its positive correlation with U.S. equities. However, the currency pair found comfort in our previous 1.2669 bottom-end support. The EU released a plethora of economic data on Tuesday. While the German Ifo Business Climate was worse than expected, the EU’s Current Account came in strong. However, it remains to be seen if the better than expected Current Account balance was more a result of rising exports or declining imports. While rising exports could indicate an upturn in global demand and consumption, dwindling imports would forewarn of an increasingly cash-strapped consumer. Since Germany is the largest economy of the EU, the fact business managers are increasingly pessimistic is a discouraging sign. Therefore, a substantial rate cut at the ECB’s next meeting seems imminent. This detracts from the attractiveness of the long rate payoff of the EUR/USD. Even though the EUR/USD stabilized above February lows, the currency pair still faces multiple downtrend lines to the upside. Furthermore, if the S&P futures should fall below 2008 lows, then the EUR/USD will likely follow suit. Consequently, we maintain our negative outlook on the EUR/USD. Fundamentally, we maintain our supports of 1.2725 and 1.2669 with fresh bottom-end support of 1.2596. To the topside, our 1.2725 support turns resistance, with additional resistances of 1.2806, 1.2846, and 1.2883. The 1.30 serves as a key psychological barrier. The EUR/USD is currently exchanging at 1.2720.

    Read More

Share This Page