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Investors Divesting Out of Euros

Discussion in 'Forex Daily News & Outlook' started by forextrends24, May 14, 2010.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
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    Today’s sample of Forex Analysis from ForexHound.com

    The EUR USD fell to a new low for the year, in effect, wiping out the $1 trillion bet placed by the European Union over the week-end. Now that the short-term fix has been eliminated by the market action, the downtrend can resume its normal course. It looks at this point that the EU and IMF are out of bullets so buckle your seatbelt. The European Central Bank may try to get creative by slashing interest rates to zero, but this move is likely to wear off quickly as it would indicate that it expects the Euro Zone to show no growth over the near-term. Thursday’s downside action also demonstrated that the hedge funds and large traders remain fearless.

    The GBP USD traded sharply lower on Thursday after breaking through a short-term retracement zone at 1.4763 to 1.4695. Earlier in the week, the British Pound rallied following the announcement of the formation of a new government. Reality set in rather quickly shortly after this event as investors began to realize that austere financial measures will be necessary to cut the budget deficit and reduce the sovereign debt. On Wednesday the Bank of England announced that economic growth will be slow over the next two years. This news also pressured the British Pound. Downside momentum appears strong enough to drive this market into last week’s low at 1.4474

    The weaker Euro helped to boost the USD CHF. The current chart formation suggests that the new low in the Euro is likely to lead to a breakout to the upside through the recent top at 1.1246. A new main bottom has been formed at 1.0923. A trade through this price will turn the main trend down.

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

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