After reaching 1.4051 last Friday, the EURUSD fell to 1.3826. Possible end of upward trend in the medium term.

[RTFX-Trading]

After reaching 1.4051 last Friday, the EURUSD fell to 1.3826. Possible end of upward trend in the medium term.

What's new?
South Korea: Raised its military alert level after threat to its northern neighbor.
United States: Increase of U.S. Treasury bonds.
Oil: Up 1.6% to $ 63 a barrel.
United States: The White House said that the bankruptcy of GM is an option.
ECB: Will probably buy more than €60 billion in bonds.
United States: Home re-sales up 2.90% in April.

Today:
08h15 Switzerland: April Trade balance (CHF), previous 151M
10h00 Germany: Unemployment Rate May, exp 8,40%, previous 8,30%
10h00 Germany: Unemployment Change, exp 67'000, previous 58'000
11h00 Euro-zone: Business Climate index May, exp -3.08, previous -3.33
11h00 Euro-zone: Consumer Sentiment index May, exp -30, previous -31
12h00 United Kingdom: CBI Quaterly Distributive Trades May, exp -10, previous 3
14h30 United States: Durable Goods orders April, exp 0.40%, previous -0.80%
14h30 United States: Initial Jobless Claims, exp 630'000, previous 631'000  
16h00 United States: New Home sales April, exp 0.360M, previous 0.356
17h00 United States: KC Fed manufacturing index, previous -6.
18h00 United States: Midwest manufacturing index, previous 82

Overnight Rates & Indices:
EURUSD: 1.3852 – 1.3793.
USDCHF: 1.0948 – 1.0915.
GBPUSD: 1.5978 – 1.5900.
EURJPY: 133.50 – 131.69.
USDJPY: 96.58 – 95.24.
DowJones: 8'300 -2.05%.
NASDAQ: 1’731  -1.11%.
S&P 500: 893 -1.90%.
Nikkei: 9’477 +0.41%.
Gold: $946

Comments:

Wall Street lost more than 2% yesterday, fueled by a sharp surge in U.S. Treasury bonds, which seems to indicate that individuals and businesses could face higher borrowing costs. In order to finance the Obama Administration’s proposed plans and the various measures to support the economy, the Treasury plans to issue $2,000B in bonds this year, an amount twice as large as in 2008. Tensions in Korea also lead investors to lighten their portfolios.

The European Central Bank will open its program to purchase bonds to the assets it already accepts as collateral for its supply of liquidity. This should encourage the distribution of loans to households and businesses.

After testing the 1.4051 high last Friday, the EURUSD fell to 1.3830. I note the presence of a Harami on Monday 25 May, which may signal a reversal in the medium term, I also note that our RTFX Trend dropped to neutral. This tells us that as long as 1.4050 does not break, the end of the EURUSD rise in the medium term is possible.

Good Day

Emman Xuereb

RTFX Ltd
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