EUR/USD Daily Review 14 May 10

By IBTimes Staff Reporter | May 14 2010 1:00 PM

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CASH YOUR PIPS FOR BEER DAY!

Yes Friday is finally here. We jolly well do so. With the Euro in deep deep sh*t, who knows what will the weekend brings.

Growing tensions were reported in Spain and Portugal yesterday as their governments moved to plan measures to reduce budget spending. A 5 percent cut in public salaries was announced by the Spanish PM and in return, the largest union, Comisiones Obreras, mentioned that it was planning a ‘‘massive” response. In Ireland a number of protesters who were marching against the government attempted to storm the parliament.

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The EUR/USD slides further as the situation in the Euro Zone escalates.

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The S&P 500 is affected by the Euro Crisis and tumbles down like play blocks.

Oil is not spared and is currently at $78+.

While gold is slightly affected, trading at $1220+ now, we must compare this to the US Dollar which has strengthen quite a bit. This suggests resilience and hence probably demand. Risk aversion is probably the star of the party now.

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I heard a number of rumors about the Euro today. So much so that we can even name today ” The Euro Bashing Day” !!

A former Federal Reserve Chairman said he is concerned that the Euro Zone may break up. Deutsche Bank AG Chief Executive Officer said Greece may not be able to meet her debt obligations in full. Even global powerhouse China Premier said that the world recovery is not solid as the sovereign debt crisis worsens.

Earlier i heard rumors that Germany may leave the Euro Zone this weekend. Next i was reading a report saying that France threatened to leave the Euro Zone during negotiations previously. Something denied by the officials since. While these rumors shouldn’t affect you much if you do plan your trades well, what i would like to draw your attention to is the negativity towards the Euro Zone. As we approach the previous low of 1.2329+/-, where do we go from here? A Senior Koala said he read that 1.18 may be next. Whatever it is, at this rate the Euro Zone is being bashed, i won’t be expecting the Euro to go very high too.

This is almost like the 2008 crisis and hence PLEASE BE PRUDENT.

All remains now is the strong line of 1.24 before 1.2330+/- comes into the aiming reticle.

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