Thursday, June 14, 2012
During most of today's trading session, the EUR/USD pair has been moving within a tight range ahead of Sunday's Greek Election. This price behavior further indicates the overall uncertainty & concern many investors have about the future of the Eurozone. Yields in the Spanish 10-Yr Bond have climbed throughout the trading day in response to last night's credit rating downgrade of Spanish Debt, 3-notches lower, by Moody. Spanish yields reached a euro-area record high of close to 7% for 10 -yr debt, which is an unsustainable level for the sovereign & brings to question the nation's ability to fund itself. Many institutions & bond funds are not allowed to hold debt at a lower credit rating and they were forced to sell their bond holdings after the downgrade, which caused borrowing costs for Spanish 10-Yr Paper to rise. In the past, when sovereign yields broke above 7%, there was an immediate need for an EU-IMF bailout for that country.
During today's webinar, we discussed the price action for the EUR/USD pair and how it was much different compared to other asset classes, like equities & commodities. Other markets showed signs of risk aversion as investors began to move towards safer harbours. However, in the currency market, price reacted differently and the EUR/USD was contained within a 52 pip range despite the negative news coming out of Spain. This proves that investors are choosing to sit on the sideline & wait to hear the outcome of the Greek Elections over the weekend before they place a position in the euro.
Tuesday, June 12, 2012
In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and the fundamental news pushing market prices. We also place a few live trades using the Slumdog Forex trading system.