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Good day forex koalas!
After not falling asleep yesterday while typing, i am determined to do the same today
Yesterday, we noted that the G20 meetings were inconclusive. Getting 20 different opinions to agree is probably a difficult task. The markets responded by trading in a somewhat horizontal fashion. A report observed that nowadays, the markets mostly react based on emotional triggers rather then fundamental data. Lastly we explored a report stating that the states in the US face a budget crisis which required immediate attention. Deficits need to be trimmed as soon as possible.
Looking at the EUR/USD chart above, it is obvious that the momentum is bearish. The currency pair merely hesitated at the various trendlines and supports before cutting through.
S&P 500 had a massive drop too and is now at 1046+.
Oil retreats to $75.
Gold drops to $1234, pressured by the stronger US dollar.
Risk aversion is out for the hunt.
A general strike happened in Greece today and it was the fifth one for the year. Over 9000 protesters marched and state services were affected. Investors do not like sovereign issues and this extinguished risk appetite. With an already weak economy, Greece cannot afford such issues. Investors will probably pull out of the country and further weaker the economy. This of course will also cause concern with regards to the Euro Zone on the whole.
Over in the US, the CB Consumer Confidence turned out worst than expected. As this data is often a leading indicator of consumer economy, it is important to the investors. Seeing the red result, investors are dismayed especially when the US seems to be doing a good recovery. I am always reminding that the US is not as “strong” as it seems to be. Housing and employment remain weak and the budget deficit makes Greece’s seems like peanuts!
If you are wondering why will the US dollar strengthen then, you need to head to the Koala Forex College ASAP! Risk Aversion is the key!
Tomorrow brings us the German Unemployment Rate. As Germany is the largest economy in the Euro Zone, this is significant news. In the US, one of the main highlight will be the ADP Non-Farm Employment Change which investors look at to get a prediction of Friday’s US Non-Farm Payroll.
If bullish relief arrives, we may see 1.22/1.23. Continued bearish momentum may take us to test 1.2135.
Ok! I am about to wrap up my article and i hope i don’t fall asleep during these last critical moments You know, since the longest i remembered, i always struggled to make everyone happy and everyone like me. I KNOW for a fact this doesn’t happens. However i simply can’t bear to see someone dislike me. It affects me too much for my own good.
Any tips on how can i deal with this? Arrrgghh.
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