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Good day Koalas!
How is the harvesting?
Today is a speculation day!
The EUR/USD climbed for a second day after bouncing off the 1.3600 region.
Although the S&P 500 rallied, we have to note that yesterday’s rally went south by the end of the day. The market seems undecided for now as the S&P 500 ranged around.
In the meanwhile, oil is back above $70.
Gold is currently valued at $1070+. As the Greece uncertainty unfolds, i will be watching the demand as gold is a timeless currency and hence a possible investment when the global economy is unstable.
The ECB President Trichet left a meeting of policy makers in Sydney one day early and investors are speculating that this may be due to Greece and hence with such importance, officials may agree on aid for the deficit issue. Such speculations may bring about a relief in the risk aversion climate.
Furthermore it has been reported that the European Commission President Jose Barroso said that investors would be wrong to bet against the euro. Investors possibly see this as an indication of the EURO still having tricks up it’s shelves.
Finally to add on to the speculations, economists said that the ECB may be forced to delay the previously announced plans to withdraw the emergency measures taken during the financial crisis of 08. If indeed so, investors may be glad that the current recovery will not suffer a setback due to the withdrawal of emergency measures.
Tomorrow brings us the US Trade Balance release and investors may be trying to decipher future currency demands by looking at the ratio. A weaker currency may help a country’s economy at times and this is something we need to keep in view too.
While the EUR/USD is bullish today, do note that once again from a technical point of view, the current pattern looks similar to the ones happening week after week. A few days of slight bullish momentum, followed by a big bearish drop. I have circled both regions. Having said so, we do have 1.3600 just below the currency pair now and it may prove to be a strong support.
Bullish continuance may bring us to 1.3800/80.
Bearish comeback may target 1.3740/680.
Have you ever wondered that if you were the FED Chairman or ECB President for one day, what would you do?
Think about it and i look forward to seeing your thoughts! Trade safely
Read more Forex Articles and Views by The Koala at www.thegeekknows.com