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Good day forex trading koalas.

In the previous review, we noted that President Obama had agreed to a two years extension on tax cuts. This was probably increasing the risk appetite of investors. On the other hand, the Euro Zone continued to bear negative news such as the speculations of bailouts and disintegration.

Looking at the EUR/USD chart above, the currency pair has slipped lower to test the 1.32 region. The continued test of the region for the last 12 hours suggests a tug of war between the bulls and bears.

The S&P 500 is currently slightly red. This is probably due to risk aversion from the increasing of China interest rate. As China is one of the largest economy in the world, many investors look towards it to lead the global economy out of the recession. Any action to cool it’s economy usually brings fears of a derailed recovery.

Over in the Euro Zone, there was talk of the failure of the earlier banks stress tests. Banks which apparently passed were subsequently told to raise additional capital. This probably did not go well with the investors’ confidence. Apparent signs of differences and complications are probably eroding the Euro Zone’s credibility in the eyes of the market.

Among the economic data tomorrow brings the ECB monthly bulletin which provides the detailed analysis of current and future economic conditions from the ECB’s point of view. US Unemployment Claims is also due and after the recent poor US Non-Farm Payroll, investors will probably be watching this.

Trade Safely.

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Related Forex Articles from the Koala Forex Training College.

  • Risk aversion in forex
  • US Non-Farm Payroll Review Dec 10
  • Read more Forex Articles and Views by The Koala at

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