Today is Thursday and soon it will be the end of the trading week. I hope you are making money from forex. The currency exchange market is no easy feat!
With the continued conflicts in the Middle East and North Africa regions, risk aversion is in the markets. The EUR/USD while weighed down, slowly makes it's advances beyond the 1.38 line.
Looking at the EUR/USD chart above, we witness a breakout in progress. While many folks believed that the 1.3880 line may hold strongly, the currency exchange market surprises all again. The currency pair shot through the 1.39 line and seems to be on it's way to touch 1.3940 and beyond. We must always remember that trying to pick tops and bottoms excessively is dangerous.
A quick look at global equities suggests that sentiments are doing well today. Most equities index are clocking green.
Moments ago, the US unemployment claims statistics was released. It was lower than expected and in fact it was reported to be the lowest since May 2008. Many investors see this as a sign of improving labor conditions and optimism towards the US economy increased. While folks may be expecting an increase in the US Dollar, the current increase in demand for the Euro is the opposite of risk aversion. Investors are encouraged by the good statistics and are selling relatively safe assets such as the US Dollar for higher yielding currencies and assets.
While the ECB held on to the current interest rates, inflation risk are mounting and investors are speculating that an interest rate hike should be due by year end. This is causing an increased take up of the Euro too.
We have the US ISM Non-Manufacturing PMI due soon and tomorrow brings us the important US Non-Farm Payroll among other economic data. Do be careful of unexpected spikes.
Trade Safely.
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