MORNING BRIEFING: Euro may resume downtrend, despite corrections

[RTFX-Trading]

MORNING BRIEFING:  Euro may resume downtrend, despite corrections

What’s new:
Euro: Bounces from yesterday’s lows but still weak
Euro Zone: Euro Zone ministers expected to set details for anti-contagion plan
China: Euro weakness may constrain possible revaluation of Yuan
Japan: Tankan report shows manufacturers turning optimistic


Today:



Rates in Asia and Indices:
EURUSD: 1.2422 - 1.2314.
USDCHF: 1.1379 - 1.1298.
GBPUSD: 1.4514 - 1.4407.
EURJPY: 115.37 – 113.74.
USDJPY: 92.96 – 92.33.
DowJones: 10’625.83  +0.05%
NASDAQ: 2'354.23 +0.31%
S & P 500: 1'136.94 +0.11%
Nikkei: 10’242.64 +0.07%
Shanghai 2’594.78 +1.36%  
Gold: $ 1'222.30
Crude Oil: $ 71.03
 
Comments:

Today Euro rebounds from its four year low reached last Monday. Expected levels for EURUSD today;  on the upside first support lies at 1.2462, whilst on the downside market should hold major support at 1.2171 according to RTFX Tradertip. Some traders see Euro as resuming drop later on today when German investor confidence and Euro Zone Inflation data are expected; projected forecasts for these figures indicate that figures should be disappointing.

One should note that measures taken are necessary to ensure long-term stability, however it does leave an impact on investor’s short/medium term expectations – which most likely translate in EURO remaining under pressure. Market Trend remains bearish as per RTFX Trend.

It is very unlikely that Euro Zone countries will be overly concerned about a weakening euro (unless of course volatility is too high). In terms of competitiveness Euro Zone may stand to benefit from a weaker currency.


Good day,


Rudolf Muscat

Trading desk

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