Economic Events: (GMT)
09:00 EUR German Ifo Business Climate Index 107.5 107.2
09:00 EUR German Current Assessment 116.8 116.7
09:00 EUR German Business Expectations 99.0 98.4
The German Ifo Business Climate Index rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers. The index is compiled by the Ifo Institute for Economic Research.
The German Current Assessment rates current business conditions in Germany, without considering future expectations. It is a sub-index of the German Ifo Business Climate Index.
German Business Expectations rates the expectations of businesses in Germany for the following six months. It is is a sub-index of the German Ifo Business Climate Index.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
13:15 EUR ECB President Draghi Speaks **** the event of the day****this can move markets
European Central Bank (ECB) President Mario Draghi (November 2011 - November 2019) is to speak. As head of the ECB, which sets short term interest rates, he has a major influence over the value of the euro. Traders watch his speeches closely as they are often used to drop subtle hints regarding future monetary policy and interest rate shifts.
15:00 USD Pending Home Sales (MoM) -0.5% 7.3%
The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
19:15 USD Interest Rate Decision 0.25% 0.25%
Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the USD, while a lower than expected rate is negative/bearish for the USD.
19:15 USD FOMC Statement
The U.S. Federal Reserve's Federal Open Market Committee (FOMC) statement is the primary tool the panel uses to communicate with investors about monetary policy. It contains the outcome of the vote on interest rates, discusses the economic outlook and offers clues on the outcome of future votes.
A more dovish than expected statement could be taken as negative/bearish for the USD, while a more hawkish than expected statement could be taken as positive/bullish for the USD
EUR/USD Fundamental Analysis Jan. 25, 2012, Forecast
Analysis and Recommendations:
The EUR/USD is currently trading 1.2982, opening this morning at 1.3013 and hitting a daily high of 1.3063. The euro improved slightly before noon on multiple economic reports within the eurozone, none were significant but together they gave a push to the shared currency. The combination of the German, French and EU manufacturing reports all staying pretty close to forecast, were interpreted as good news. As the Spanish Trade balances were reported, investors became more wary of the problems with the Greece settlement. The EU Ministers rejected the coupon or interest to be paid on the swapped bonds, even though a completed deal was not settled, everyone went back to the drawing board. At this time, investors are going to have to take such a big haircut and loss of future earning also, that a default might be in the works.
Standard and Poor's chimed into today, saying that once the negotiated settlement was reached that they would place Greece on a selective default. Anyway you interpret this it is a default, the IIF is being forced into a corner and eventually will be forced into a settlement of some sort, when you force your creditors into a settlement, that is a default.
The euro continued to lose strenght against the USD plain and simple.. Greece and the EU are running the markets.
As I said before, I think we will pretty much be in a tight range until some final decisions are made or forced. Wednesday, European Central Bank (ECB) President Mario Draghi is scheduled to speak, this will have definite effects on the markets, listen carefully to what is said and what is not said.
Later on Wednesday the FOMC will issue their statement, which might push the USD up again. The pair will move on news tomorrow.
Upcoming Govt Bond Sales Dates
Jan 25 10:10 Sweden Nominal bond auction
Jan 25 10:30 Germany Eur 3.0bn 3.25% Jul 2042 Bund
Jan 25 16:30 Italy Details BTP/CCTeu on Jan 30
Jan 25 18:00 US Auctions 5Y Notes
Jan 26 10:10 Italy Auctions CTZ/BTPei
Jan 26 18:00 US Auctions 7Y Notes
Jan 27 10:10 Italy BOT auction
EUR/USD Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3