EUR/USD Fundamental Analysis March 21, 2012, Forecast

Analysis and Recommendations:

The EUR/USD closed a rocky day, trading at 1.3226, as the pair moved up in early trading; the USD regained some strengths towards the end of the day pushed the euro down from its high of 1.3253

Markets are becoming worried about the overall effects of an economic slowdown in China, which started to become obvious over the past two weeks. The pair seem to be trading in a fairly tight range for the rest of the session, and should remain towards the bottom of this range over the next day or so.

Bond sales in Europe today went smooth with lower yieldsseen in both countries - T-bill offers in bailed-out countries sold quickly, EFSF sold EUR1.94 billion of six-month bills.  Sales of Spanish and Greek short-term debt went without a hitch

In the US today, construction on new U.S. homes fell 1.1% in February to an annual rate of 698,000, but permits rose 5.1%, the Commerce Department. Housing starts in January were revised up to 706,000 from an original reading of 699,000

Treasury Secretary Tim Geithner said that troubled European countries should take a steady, multi-year approach to fixing their budgets. "The path of fiscal consolidation should be gradual with a multi-year phase-in of reforms," 

Investors were increasingly bullish about prospects for global growth and a smaller number expected further rounds of quantitative easing (QE) by central banks, according to the Bank of America Merrill Lynch survey.

Economic Releases March 20, 2012 Asia, Europe and the US

10:30     GBP      MPC Meeting Minutes                 

The Monetary Policy Meeting Minutes are a detailed record of the Bank of England's policy setting meeting, containing in-depth insights into the economic conditions that influenced the decision on where to set interest rates. The breakdown of the MPC members' interest rate votes tends to be the most important part of the minutes.

13:30     CAD      Leading Indicators (MoM)

The Leading Indicators Index is a composite index based on 10 economic indicators, that is designed to predict the future direction of the economy. The report tends to have a limited impact because most of the indicators used in the calculation are released previously.

 15:00    USD      Existing Home Sales

Existing Home Sales measures the change in the annualized number of existing residential buildings that were sold during the previous month. This report helps to gauge the strength of the U.S. housing market and is a key indicator of overall economic strength.

Government Bond Auctions (this week)

Mar 22  10:10  Sweden  I/L bond auction

Mar 22  10.30  UK  Auctions 0.625% 2042 I/L Gilt

Mar 22  15:00  US

Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar

28 & 7Y Notes on Mar 29

EUR/USD Pivot Points (Time Frame: 1 Day)