EUR/USD Daily Review 4 Jun 10

By IBTimes Staff Reporter | June 04 2010 12:19 PM

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Good day forex traders.

Today is cash your pips for beer day! I hope the US NFP did not make it a sad day for you.

Yesterday saw good economic data for the US. Positive sentiments with regards to the American economy were present and the US equities and the US Dollar rose in value. US unemployment claims were lower than the previous month, suggesting a stronger US economy.

Compared to the US, the Euro Zone continued to face negative sentiments. Retail sales dropped to negative for the Euro Zone. Spain is facing challenging debt redemption next month and apprehension was felt in the markets.

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Looking at the EUR/USD, a full frontal assault on the 1.2 strong line is underway.

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The S&P 500 dips down for now, testing 1080.

Oil is slightly lower at $73.

Gold drops to $1204+. Probably due to the strengthening US Dollar.

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US Non-Farm Payroll came and left. Life goes on. While the figure released were lower than expected, it was nonetheless positive. This indicated an increase in jobs. ( Although a majority of the hiring was probably due to temporary workers for the 2010 census ) Having said so, investors focused on the less than expected performance of the NFP and sentiments went down, dragging along the S&P 500. The unemployment dropped to 9.7%. It is an improvement but more is needed.

Over in Europe, the trouble just never seems to stop. A government official said that Hungary’s economy is in a “very grave situation.” This sparked major concerns about the Euro Zone budget deficit crisis. Speculations were wild that the crisis is spreading to Eastern Europe. The EUR/USD is severely depressed, hovering around 1.2.

From a technical point of view, a breakdown of 1.2000 will open up the 1.1000 region. Bullish relief may see us jumping back to 1.2100/135. A defeat of 1.2 may see 1.1934 next. Do remember that support and resistance lines are never a single pip. This is clearly seen as the H4 trendline resumes after the EUR/USD took a breather the other day.

G20 meetings are going on tomorrow, be careful of any potential forex gaps.

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