The euro (EUR) dropped sharply against the US dollar (USD) before recovering somewhat. The pair touched a six month low at 1.2750 before correcting slightly to 1.2790. The single currency is seen tumbling almost daily the past two weeks as investors are looking at which will be the next Eurozone country to be ‘Cyprussed’. The list is long, starting with Slovenia, which has an overblown financial sector relative to GDP to Spain, whose banks have already been bailed out; but for how long? As a hit to depositors is seen as the norm by European policy makers, keep an eye out for any slow growth, high debt country which could be next in line.
§ Gold (XAU) gained inversely against the fall of major currencies including the US dollar (USD) and the euro (EUR). The precious metal touched 1607 before correcting to 1604.
§ The US 500 (SPI) has shown signs of fatigue as the index moved lower, touching 1549. From a technical standpoint, the largest US stock index looks to be within a pennant formation which may push it to higher highs in the coming days.
§ Weekly option volatilities for the EURUSD picked up at 10.35 from 9.25 yesterday. This shows that markets’ fears re-emerge and push options’ premiums higher.
Stay in tune throughout the day with foreign exchange bullets!
|.||EURUSD||1.2830||SHORT @ 1.2830||41% of deals buy EUR|
|.||USDJPY||94.50||SHORT @ 94.50||42% of deals buy USD|
|.||GBPUSD||1.5090||SHORT @ 1.5090||63% of deals buy GBP|
|.||AUDUSD||1.0465||SHORT @ 1.0465||59% of deals buy AUD|
|.||GOLD||1590||LONG @ 1590||71% of deals buy GOLD|
|.||OIL||94.85||LONG @ 94.85||78% of deals buy OIL|
|.||EUR||08:55||German Unemployment Change||- 2K|
|.||CAD||12:30||Canadian GDP m/m||0.1%|
|.||USD||12:30||US Unemployment Claims||340K|
The British Pound (GBP) has been gaining ground versus the US dollar (USD) moving from 1.5090 to 1.5150 in latest trading. The sterling has lost substantial ground since monetary expansion was incorporated into sterling pricing. However as money leaves troubled Eurozone economies in search of safe havens to park their cash, the sterling looks like the attractive destination. Look out for a reversal in the trend.
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