Thursday, April 12, 2012
Despite the low levels of trading volume and participation in the market, the EUR/USD pair has still managed to push higher over the last 2 days, primarily due to US dollar weakness. For today, the pair had rallied about 82 pips from the session low at 1.3102 to the session high of 1.3184, despite the growing concerns over higher borrowing costs for Italian & Spanish 10-Yr debt. There was news that Chinese & Middle Eastern sovereign accounts were helping to prop the euro and push the currency pair past the 1.3155 barrier in an attempt to take out stop orders and offers at that level.
However, the gains in the EUR/USD pair could have been a result of the market's expectation of another round of quantitative easing due to the poor employment numbers that have been coming out of the US. Initial jobless claims rose to 380,000 new applicants for last week and when you also consider last Friday's poor Non-Farm Payroll numbers, that may signal the start of a potential weakening or slowdown in the US economic recovery. What we are seeing in the EUR/USD is not the result of euro strength, but dollar weakness as the threat of QE(quantitative easing) measures become more apparent.
Tuesday, April 3, 2012
For the past few days, the EUR/USD pair has been trading within a range, as a result of market indecision. There are still some concerns over global growth and whether China would experience a soft or hard landing in their economy. But, most importantly, the sovereign debt concerns out of the Eurozone periphery are weighing more heavily upon investor sentiment. Worries about the fiscal situation in Spain and Italy are prompting investors to refrain from participating in the market for the time being and we may continue to see quiet rangebound activity ahead of this afternoon's FOMC minutes, since we have marginal US data this morning. Tomorrow's ECB rate policy meeting and Spanish debt auction may also provide a considerable amount of volatility to the EUR/USD pair, as investors & traders attempt to interpret what there outcome means to the market and whether the risk recovery has begun to stall out.
In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and we also place a few live trades using the Slumdog Forex trading system.