EUR/USD has traded down to as low as 1.2860, finding temporary support in the 200-day EMA and looks very soft in here.
Concern about Greece also resurfaced after European Central Bank chief Mario Draghi told the European Parliament Committee that Greece has made progress on reforming its economy, but has more work to do.
Adding to the negative sentiment, the IMF cut its global growth forecasts for the second time since April and warned U.S. and European policymakers that failure to fix their economic ills would prolong the slump
Hundreds of recessions since the 19th century show that most are short, sharp corrections, but the ones that linger can be disastrous.
As the euro-area faces a deepening recession, the International Monetary Fund warned that ‘the probability of falling prices is unusually high,’ and the group went onto say that the ECB has the scope to lower the benchmark interest rate further as the central bank outlook ‘may once again prove overly optimistic.’
As the debt crisis continues to dampen the outlook for the euro-area, the EURUSD appears to have made a failed run at the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3120, and the pullback from 1.3070 may turn into a larger reversal as the pair threatens the upward trend carried over from the end of July. 80c is the possible outcome according to Economist Shayne Heffernan.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service
Copyright Live Trading News All rights reserved.