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EUR/USD Daily Commentary for 2.26.09

Discussion in 'Forex Daily News & Outlook' started by FastBrokers, Feb 27, 2009.

  1. FastBrokers

    FastBrokers New Member

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    The Euro depreciated against the Dollar on Thursday, relinquishing all of its weekly gains. The selloff in the EUR/USD came in response to weakening equities amidst discouraging housing data. Investors will get another dose of economic data on Thursday as the U.S. releases more housing, unemployment, and durable goods numbers. EUR/USD will be paying close attention to what ECB President Trichet has to say. It is likely he will forewarn of an upcoming monetary shock considering the EU and Eastern European economies are weakening further. Even though Germany’s Unemployment Change was lower than expected Thursday, the EU money supply was a full a percentage point lower than expecting. 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 has stabilized above February lows, the currency pair still faces multiple downtrend lines to the upside. 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 find support of 1.2758 with 2nd tier and bottom-end supports resting at 1.2690 and 1.1.2655, respectively. To the topside, we see resistances of 1.2806, 1.2836, 1.2883, 1.2946. The 1.30 area will continue to serve as a psychological barrier. The EUR/USD is currently exchanging at 1.2770. Read More

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