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Euro Posts Strong Gain as Banks Borrow Less from ECB

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jul 1, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    The EUR USD rallied sharply higher on Wednesday after the European Central Bank reported that demand for three-month loans by member banks was weaker-than-expected. This news came as relief for traders who were looking for European banks to be a little more active at the lending window given the bleak outlook for the Euro Zone economy. The news tempered concerns that the European banking sector was weakening and would need to continue to borrow from the ECB to shore up finances.

    Technically, the Euro found support at a key 50% level at 1.2171. The rally from this level gives bullish traders a ray of hope that the market will form a secondary higher bottom to help drive it through the most recent high at 1.2367. Bearish traders point out that the short traders still control the Euro based on the recent Commitment of Traders Report. Some feel that lower prices are coming and that today’s rally was just a technical glitch in the down trend. The chart indicates that a failure to hold 1.2171 should trigger a fast move to 1.2102.

    Gains in the Euro may have been limited on rumors that Moody’s rating service was getting ready to downgrade Spain’s sovereign debt. Some believe that this may already be priced into the market because Fitch and the S&P Corp. had already downgraded Spanish bonds weeks earlier.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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