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Euro Touches New Low for Year; No Solution to Debt Woes in Sight

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Apr 23, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    The Euro touched a new low for the year, taking out the late March bottom at 1.3267. Although the break to 1.3257 was met with profit-taking and bottom picking, the fundamentals are still suggesting that this pair has a long way to go before support is established.

    By all reports, Greece continues to move closer to sovereign debt default. It looks as if the bailout from the EU/IMF proposed earlier in the month will not be enough to meet Greece’s financial obligations. The cost to finance the debt is sky-rocketing so unless there is a plan in the works to rewrite Greece’s financial obligations it looks as if it has no choice but to default. Contagion is another concern for investors. As the Greek financial situation worsens, so do the financial problems in Portugal and Spain.

    The spread between Greece Bonds and German Bunds continues to be the best indication that there is risk of default. Yesterday this spread traded over 500 basis points. On Thursday, the Dollar rose against the Euro despite on-going talks to activate the loan agreement between Greece and the International Monetary Fund. Short-traders believe there is not enough money in this agreement to help Greece over the long-run.

    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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