Technical analysis of forex market April 05,2012

The failure of a Spanish bond issue and the fears of an economic recession in Europe,

precipitated on the Eurodollar 1.31 last night to 3150 in early European session. Our advice in the morning, the situation is still fragile and remains bearish in 3180/70. These levels should accommodate vendors with stoploss between 3195 and 3205 for a return to 3130/20.

3150 will serve as a staging area, namely that above it will be slightly bullish for 3180 and that below bearish for the mounting area 3120/10. On these levels the buyers will put their stoploss below 1.31 (until 3090) as the area is guarded by a barrier of options and as we take 1.31, EUR-USD is likely to bounce back or at least consolidate between 1.31 and 3180. Nevertheless a passage under 1.31 and 3095, we sent over 3080/70 and 3050/20, levels on which a larger decline should stop.
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Forex, the euro is not helped by the firewall

After you stop looking only to Greece, since after the last aid the country could breathe a sigh of relief now that wobbles dangerously Spain, with Portugal and Italy could still follow the Iberian country.

The firewall of the euro area has been strengthened to a sum of 700 billion euros, but it is still not nearly enough if the major Eurozone economies, like Italy and Spain, should you need to be saved.

This is a difficult balancing act, given that increasing too much the bailout fund would send a clear message that there are serious doubts about Spain and Italy on economic survival.
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For we must not always believe the rating agencies

Few days ago, Moody, note rating agency, has threatened the United Kingdom to pursue a downgrade in the rating of the country, which is now in Triple A. Even if the British government has sought to blame the euro crisis of this statement, something from which I could actually depend on, Moody explained that their decision is mainly the result of poor economic prospects of the United Kingdom, which is a lower growth and a increased debt, a deficit larger than that of the past.
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England could lose its triple-A

Britain and its ratings are threatened by the crisis in the euro area, Moody’s does know. The rating agency said that the Triple A of the United Kingdom is currently still not sure, but also indicated that there are new challenges to overcome to be able to maintain. The ability of Britain to absorb further economic shocks, while maintaining the stable outlook has worsened in the last year, due to weak economic growth.

The verdict is a blow to the chancellor George Osborne and his coalition. The outlook on the rating is probably also sensitive to future developments of the debt crisis in the euro area, even if the UK is not part of the monetary union.

A rating downgrade would be rather embarrassing for Osborne, but basically it will raise borrowing costs that may jeopardize the economic recovery already in trouble.
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The French attacking Britain

Relations between Britain and France are at their lowest, after London and Paris have exchanged accusations of the state of their economies. Tensions were inflamed when the French finance minister has become the latest in a series of characters to attack the French economic management of the British government.

Francois Baroin said that the economic situation in Britain is very worrying, you prefer to be French rather than English in economic terms.

David Cameron has not spoken with Sarkozy since the French president described him as “an obstinate child.” In contrast, David Cameron has discussed the problems in the eurozone with several European leaders, including German Chancellor Angela Merkel.
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USA, the next quarter, employers will hire new staff

Employers in the United States plans to hire more workers in the first quarter of 2012, indicating a growing optimism about economic prospects. Manpower, the world’s second largest provider of temporary workers, said its employment index rose to 9 percent, the highest reading since 2008. The indicator rose for the first time this year. Manpower itself has interviewed more than 18,000 employers in the United States has conducted a quarterly survey, in which usually the margin of error is about 0.6 percentage points.

Surely a recovery in the world of work would increase the likelihood that consumer spending, which accounts for about 70 percent of the U.S. economy, will support the recent gains in the coming year. The uncertainty surrounding the outcome of the European debt crisis and the war on the U.S. budget, can be fully addressed only if there is an ever-expanding workforce.
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The European crisis at the political level, Part 2

One of the problems commonly recognized for the euro area is at the political level. We take the latest cases of crisis. You can, for example, be sure the commitment of the reforms by the new governments in Italy and Greece, but you do not have the necessary powers to ensure the long-term fiscal discipline of the Member States. The greek government should last until March, while the new Italian government must have the support of Parliament to push through reforms. In both countries, however, the reforms of time before they can ask to have concrete economic results. In the meantime, you will create a difficult situation.
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How far will raise the EUR / USD?

This is the question that thousands of analysts should be doing and whose answer is not easy to find. The weekend European leaders met to advance the rescue and bailout policies of the complicated economic situation and we know that Wednesday 26 will be a key day for the markets because they announced the result of these negotiations and plans of action.

Despite the crisis and the uncertainty of what happens in the coming days, the stock markets and the major stock woke up on Monday and pulled upward to exchange more liquid creating an appetite for risk. In this context it is a fact that in the short term, the EUR / USD has every intention of seeking the coveted approx 1.4000 and advances candle after candle to that goal. Will the big players in the market and know what will happen on Wednesday?
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Italy is the center of attention

The ‘Europe is becoming overwhelmed by concerns about how the’ Italy could become the next Greece, that needs a bailout to avoid the worst. While waiting for the parliamentary vote in Germany for a global response to the debt crisis in the euro area before the second Wednesday on emergency EU summit, the ‘European Union is setting up a plan to buy Italian government bonds. The Italian government bond yields are still poised and close to the level of six percent, which is why you start to think of our country.

The ‘Europe that Rome wants to deliver the measures that they can show that there is no risk that Italy will become another Greece. In response, Berlusconi said that no one has nothing to fear, adding that there is no need to receive a lesson from the European economic partners. Meanwhile, Berlusconi has called yesterday for an emergency meeting of the Cabinet, but did not find even of the agreements on pensions and their reform.
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The 5 most useful economic data, Part 2

An analysis of the 5 most useful economic data, as we started talking in the last article, we see that the first fact to consider is the Non Farm Payrolls, which is the unemployment rate of non-agricultural sector. It is a measure of the strength of the labor market. One of the ways that analysts have to measure the strength of an economy is the number of jobs that are created and the percentage of workers who are able to provide jobs. Job creation is a sign of strong economic growth, as companies need to increase their workforce to meet the increasing demands for goods or services.

The second is that economic data in relation to the decisions of the FOMC interest rate. The FOMC decides the discount rate, which is the rate that the Federal Reserve Bank applies to overnight loans of banks. The rate is decided during the meetings of the FOMC, which meets 8 times each year. The same holds true for other economic areas, such as the BoE interest rate or the ECB.
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