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Renewed Confidence in Greece Deal Triggers Big Gain in Euro

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Feb 17, 2010.

  1. forextrends24

    forextrends24 New Member

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

    The Euro soared on Tuesday as news that Greece is ahead of its deficit-reduction targets boosted investor confidence. Traders celebrated the news that Greece may not require any bailout from the European Union by driving the EUR USD higher while posting its biggest gain in seven months.

    Short-covering was most likely the driving force behind Tuesday’s rally which means a retracement is likely at some time this week. If this market is truly ready to change the trend to up, then fresh buying has to come in on the next test of the recent bottom. Bullish traders will try to set up a secondary higher bottom.

    The GBP USD finished the day higher. A report released overnight showed that inflation accelerated in January to its fastest pace in 14 months. This news helped trigger a short-covering rally. Inflation was up 3.5% which exceeded the Bank of England’s target of 2.0%. This prompted a response by BoE Governor Mervyn King to explain the rise. Traders are becoming less confident in the BoE’s ability to help the economy while at the same time preventing a surge in inflation. Demand for higher risk assets helped the Pound overcome the economic issues it is facing.

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

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