Good day to you.
After the US President announced the death of Osama bin Laden, currency markets were strengthening and the US Dollar weakened. Market risk appetite increased.
The currency markets seem to have normalized and the main driving factor for the EUR/USD is probably the interest rate differential between the US and the Euro Zone. Last week, Mr. Bernanke indicated that there is no need for interest rates to be hiked for the moment.
In Europe, comments were made that the reconstruction of state bonds and debt of Greece is not a good option.
Other news released on the market is that it is likely for China to increase interest rates again to counter inflation in this country. Currently the main focus of the market and traders is probably the European Central Bank interest rate decision and news conference that will take place tomorrow.
Technical point of view:
Due to the speculated interest rate hike for the Euro Zone, the EUR/USD touched 1.49 and I believe this week will touch also 1.50. Currently it is ranging approximately 140 pips between 1.4760 and 1.49 (Green Channel). If this range is broken, we will probably see about 150 pips. Main trend is still ascending, so only buy on floors.
Have a nice time.
Masoud.
Masoud is a businessman and a Senior Forex Koala. Connect with him at our page on Facebook.
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