What is stronger: the Fed’s printing press or the EU crisis?

By GG Analyst in Reviews 0 Comment

EUR/USD

The sure upward march of the US stock exchanges yesterday wasn’t taken up by Forex. From the technical side we see that yesterday the single currency was retracing after the preceding growth from 1.2750 to 1.3120. It’s however possible that the situation is quite the opposite and that growth was none other than a retracement (it would be the 61.8% Fibonacci retracement after the drop from 1.37). Since from this viewpoint the situation looks controversial, let’s turn to the fundamental factors. The single currency enjoys rather poor economic indicators, but the ECB firmly resists flooding the economy with money by purchasing more…

Cyprus bailout

By GG Analyst in Reviews 0 Comment

EUR/USD

The word “bailout” presupposes some aid, easing of the lot of the rescued. Earlier money allocations to the rescued Greece, Ireland, Portugal and Spain led to growth of the single currency, albeit the short-term one sometimes. Yet it is different with Cyprus, “rescued” last Saturday. EURUSD dropped by 1.5% after the EU’s decision to impose a one-off 9.9% levy on accounts with more than €100K. Smaller deposits will be taxed at 6.75%. Altogether, it should bring €5.8bln to the government of Cyprus. The EU will allocate another 10bln. Earlier it was calculated that Cyprus would need about 17bln, but the IMF more…

Double blow to EUR

By GG Analyst in Reviews 0 Comment

EUR/USD

The moderate buying of the single currency on Wednesday morning stumbled over the wave of sales. The growth momentum of the pair was halted at 1.3060. Roughly in the same zone there had been a reversal a day before , but this time the bears were prepared better. By the middle of trading in the USA the pair had fallen to 1.2922. There are two reasons for the bears to be that self-confident. First of all, the auctions were not a success – three of the four bonds of different maturity demonstrated a higher yield. In the meantime the yield of more…

Trim your sails to the wind

By GG Analyst in Reviews 0 Comment

EUR/USD

But for comments of Bundesbank President Jens Weidmann, the single currency would have continued to slip down yesterday. His words that the current policy of the ECB poses a threat to the monetary policy of the region have triggered a short rally in EURUSD. From the daily low of 1.2990, hit at the beginning  of trades in Europe, the pair grew to 1.3074. However, this mini-rally proved to be short-lived. Very soon eager selling brought the pair back to 1.3020. Actually, all these moves are trifle ones, but there is one fundamental moment. Today we will probably see breaking of the more…

Divergence of the markets

By GG Analyst in Reviews 0 Comment

EUR/USD

The US stocks continued their upsurge yesterday, Dow Jones grew by 0.3%, having recouped the previous decline and is now just 0.3% from its historic high. To some extent optimism in the stock markets (and simultaneous selling of the dollar) can be justified by Janet Yellen’s promise to continue stimulation of the economy, which functions poorer than its potential allows. This optimism boosts purchases of commonly-known risk-sensitive currencies, including the euro. EURUSD formally remains in the downtrend and on Friday the decline seemed to be even faster. However, as we warned, the level of 1.30 is too important both for bulls more…