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Good day forex traders.

Today is midweek and i hope everyone is green so far.

We noted yesterday that the North Korean military was put on alert and this probably caused risk aversion. Furthermore after the announcement of the seizure of the Spanish bank, investors were speculating that Spain might be next in line for the budget deficit crisis limelight. As the paperwork for the aid program materializes, more Euro Zone countries might be declaring their budget problems to get a share of the pie. The credit markets seemed to be getting tighter too as banks became risk adverse towards lending money.

Investors were worried that the crisis might spread and equities fell globally.

The EUR/USD failed to break the strong line of 1.2330 earlier and is now approaching 1.22.

The US equity index is bullish for now after touching a low yesterday. Continued bullish momentum may indicate improving sentiments.

Oil is up above $70. I am paying close attention to the price as oil can be a clue to the global economy.

Gold in the meanwhile continues to rise and is now trading at $1210+. Demand is probably there to cause this and risk aversion may be still lurking around.

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Commodities and equities worldwide recovered today. This was mainly pushed up by the strong economic data flowing out of the US. During times of financial “darkness” everyone welcomes a knight in shining armor. Durable Goods Orders in the US came out higher than expected, suggesting that demand was good. New home sales in the US rose in April to a level not seen in two years. As home sales normally starts a chain of economic activity, investors are optimistic that it may boost the economy one way or another.

Now allow me to rain on your parade. This forex website is all about realistic expectations and trading. There are always two sides to a coin eh? While the jump in the purchases of new homes in the US for April seems like a clause for celebration, hold your horses for now. This was probably due to a rush to be eligible for a government tax credit before it expired at the end of the month.The main point of this bullish party is whether will home sales continue to be robust AFTER the end of the tax credit program.

Spain’s budget deficit is forecast to be 9.3% of the GDP. Investors may be worried that this is an understated estimate and further evaluation may bring the figure up. The seizure of the Spanish bank did indeed punched a hole in the sentiments department as investors and the media starts to shift their focus to Spain. The last time we saw this happen ( Greece ), resulted in much volatility and risk aversion.

Tomorrow brings us the German Preliminary CPI, US Preliminary GDP and US unemployment among other economic data releases.

From a technical point of view, the bearish momentum makes a test of 1.2200 likely but based on the previous support encountered in this region, we may see some tug of war before heading towards 1.2135. If the 1.2200 line holds, we may test 1.2330 again.

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Do you have back aches? I do and it is almost constant. There is nothing wrong physically as far as i know but it is just aching day and night. Could it be i am hunching often? Or i spend too much time at my computer desk instead of running. Arrghh how i wish i can put a metal rod behind my back to stop that hunch. May it will solve the problem!

Trade Safely.

Related Forex Articles from the Koala Forex Training College.

  • Gold can be an indication of uncertainty.
  • What is risk aversion in forex?
  • Oil may be a clue to the global economy’s health
  • Home sales can be good for the economy.
  • Read more Forex Articles and Views by The Koala at

    TheGeekKnows.com – Learn Forex Trading and view EUR/USD Reviews.

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