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Monday, 26 Sep 2011

EUR/USD Falls to a 10-Month Low amid Europe Crisis Fears

As this week's trading begins, there's little doubt that the debt crisis is the most pressing issue at hand. All eyes are currently watching what the European policymakers do with Greece's debt crisis. At the moment, the market seems rather pessimistic regarding the future of the European-Union and the euro is falling on all fronts.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddownnodownupdownup
Weekly Trenddowndowndownupdowndown
Resistance1.35101.553077.050.91650.97600.8765
1.34901.551076.850.91450.97400.8745
1.34601.548076.550.91150.97100.8715
Support1.33951.542075.950.90550.96500.8655
1.33651.539075.650.90250.96200.8625
1.33451.537075.450.90050.96000.86005

Economic News

USD - Dollar Closes a Bullish Weekly Session as Risk-Aversion Soars

The U.S. dollar rallied against most of its major currency counterparts during last week's trading session as concerns regarding the European-Union stability have turned investors to long the dollar as a safe-haven.

During Monday's morning session the greenback continues to strengthen against the euro amid skepticism that Europe's latest efforts to contain its sovereign debt crisis will be successful.

The dollar gained about 400 pips against the euro over the past week, and the EUR/USD pair has plunged to the 1.3360 level, marking a 10-month low. Against the British pound the American currency gained about 350 pips, and the GBP/USD pair is now traded around the 1.5440 level.

As for today, the U.S New Home Sales report is scheduled at 14:00 GMT. This report measures the annualized number of new single-family homes that were sold during the past month. Analysts are forecasting that 296,000 new homes were sold. If the end result is higher, the dollar has potential go extend its rally for today as well.

EUR - Euro Free-Falls amid concerns Europe's Sovereign Debt Crisis Won't Be Contained

The shared currency saw sharp depreciations against all the major currencies during last week's trading session. The euro fell on concerns that the euro-zone will not bail-out the Greek economy, which might lead to long-lasting bearish reactions in European markets, which will, eventually, sign the end of the euro-zone era.

The global press in now informing that European policymakers have begun working on new ways to stop fallout from Greece's near-bankruptcy from has further negative impact on the world economy. During the weekend the globe's largest economies, such as the United States and China, have raised their concerns regarding the debt crisis, and said that the European leadership must get more aggressive in their response.

The euro hit a 10-year low versus the yen during market opening this week, as the EUR/JPY pair tumbled to the 101.92 level. The euro also dropped to a 10-month low against the U.S. dollar and the EUR/USD pair is currently trading near the 1.3400 level.

Looking ahead to this week, traders are advised to pay close attention to each and every development regarding the European crisis, as this will surely be the main economic event of the week, which will have strong impacts on every global financial market.

JPY - Yen Rises to a 10-Year High against the Euro

The Japanese yen strengthened against most of its major currency-rivals last week as the decreasing risk-appetite in the market has boosted the yen's appeal as a safe-haven investment.

The yen's most notable uptrend took place versus the euro, as the EUR/JPY cross plunged into a 10-year low after hitting the 101.92 level. The yen rallied against the euro on concerns that Greece is on the verge of bankruptcy. Investors fear that if Europe will be unable to avoid Greece's default, the outcome will eventually be the teardown of the euro-zone.

Looking ahead to today, traders are advised to follow the ongoing news from Europe. It currently seems that as long as the European leadership is reluctant to solve the debt crisis, the demand for the Japanese currency as safe-haven will continue to grow.

Crude Oil - Crude Oil falls to $77.10 a Barrel on Concerns Europe's Crisis Will Damage Fuel Demand

Crude oil fell to as low as $77.10 a barrel during today's morning session on bets European crisis will cut global demand for energy following the biggest weekly decline since August.

Crude falls on concern that the euro-zone won't manage to contain the current Greek crisis, leading the Greece's economy to default. Investors estimate that the global demand for energy will decrease severely as a result, and thus oil prices are plunging.

Crude oil fell about 11 percent from $87.95 a barrel during recent midweek to as low as $77.10 during this morning's session.

As for this week, it seems that crude oil might face another bearish session as European leadership is for the moment failing to solve its debt crisis. Nevertheless, in case that European policymaker once again agrees to bailout Greece, crude price night soar once again above the $80 level.

Technical News

EUR/USD

The EUR/USD's free-fall continues and the pair has reached the 1.3360 level, hitting a 10-month low. Currently, the daily chart's MACD continues to provide bearish indications, signaling that the bearish momentum has more room to go. Going short might be the right choice today.

GBP/USD

There is a very accurate bearish channel formed on the daily chart and the cable is currently floating in the middle of it. Nevertheless, as both the Slow Stochastic and the RSI are providing indications for an uptrend, a mild technical correction might take place today. Going long with tight stops might be the right strategy today.

USD/JPY

The USD/JPY continues with relatively flat-trading, and the pair is currently trading near the 76.50 level. The next significant support level seems to be located at the 76.20 level. If the pair manages to breach it, another bearish session might be expected, with potential to reach the 75.00 level.

USD/CHF

The USD/CHF pair gained about 1,300 pips during the past three weeks and is currently trading near the 0.9080 level. However, as the daily chart's RSI has dropped below the 70-line, it seems that a bearish correction might be imminent, with a key-target level of 0.8900.

The Wild Card

Gold

Gold's bearish trend continues at full speed as the metal dropped to as low as $1,532 an ounce, marking a ten-week low. Currently, as all the technical oscillators on the daily chart are giving bearish signals, it seems that the bearish move could extend today. This might be a great opportunity for forex traders to join a very popular trend.

Current Time: 09/03 01:37 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
09/03
02:30AUD+ GDPq/q1.1%0.4%-5
04:20AUD+ RBA Gov Stevens Speaks***5
08:15EUR+ Spanish Services PMI56.255.5-3
08:45EUR+ Italian Services PMI52.851.7-3
09:00EUR+ Final Services PMI53.553.5-1
09:30GBP+ Services PMI59.158.6-5
10:00EUR+ Retail Sales m/m0.4%-0.3%-3
10:00EUR+ Revised GDP0.0%--1
15:00CAD+ BoC Rate Statement***5
15:00CAD+ Overnight Rate1.00%1.00%-5
15:00USD+ Factory Ordersm/m1.1%10.9%-3
19:00USD+ Beige Book***3
09/04
01:00JPY+ Monetary Policy Statement***5
01:00CAD+ BoJ Press Conference***5
01:00EUR+ Spanish 10-y Bond Auction2.69|2.1*-1
01:00EUR+ French 10-y Bond Auction1.77|2.7*-1
01:00GBP+ MPC Rate Statement***5
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