Masoud : Midweek EUR/USD Review 6 Jul 11

Hello koala king and folks.

Good day to you.

The most important events in two days:

Euro Zone economic growth in the services sector fell in June for the third straight month. Thus bringing economic growth in the services sector to its lowest in eight months. Likely, the central bank meeting in Europe on Thursday will raise interest rates to 1.5%.

Finance ministers from Euro Zone countries on Saturday decided to approve 12 billion euros of aid. For the time being, Greece will be avail of liquidity.

Slow global economic growth is feared to be induced by the curb on the Chinese economy. China's manufacturing sector in June was reported to be the slowest growth rates experienced in the past 28 months. Purchasing Managers Index showed that business conditions and economic activities fell from 52 in May to less than 51 in June.

Moody's downgraded the ratings of the Portugal bonds to junk. The Institute on Tuesday (July 5) announced that the Portuguese government likely will not be able to reduce the budget deficit of about 9% of GDP by 3%.

From a technical perspective:

As you can see in the above picture, the EUR/USD has reached a strong support and resistance region. If the currency pair is successful in breaking this and closes below this level, it should be able to break the bottom line of the blue fork and come down to 1.41. While the EUR/USD is below 1.4460, the main trend is bearish.

Have a nice time.

Masoud.

Masoud is a businessman and a Senior Forex Koala. Connect with him at our page on Facebook.

Related Forex Articles from the Koala Forex Training College.

• Support and Resistance lines are never a single pip
• Risk aversion in the forex market

Masoud : Midweek EUR/USD Review 6 Jul 11

EUR/USD Daily Review 5 Jul 11

Good day forex trading koalas.

It has been sometime since we had a daily review. My sincere apologies. Times have changed since years ago when we first started. Nowadays, i am weaker in health and sometimes as much as i want to, i am not well enough. With the precious little time especially during the weekdays, i usually lie down on bed from a bad migraine. Having said so, my commitment to you folks is still the same and today i will like to share some thoughts!





Looking at the EUR/USD H4 chart above, i am pleased to announce that I LOVE IT WHEN MY RED LINES WORK !
( For folks who are new, these red lines were drawn from my past observations of potential support and resistance lines over the years )

The currency pair is currently bounded between 1.4565 +/- and 1.4445 +/-, probably due to a lower volume from the 4th of July US Holiday.

Since the beginning of the week, the EUR/USD has been slipping lower as the market eases off from the knee jerk reaction brought about by the positive sentiment towards the Greek budget deficit crisis. Furthermore, the Euro Zone Retail Sales came out weaker than expected and that will most likely further dampen the risk appetite.

It was also reported that China's effort to curb inflation are causing concerns among investors due to the possibility of a reduced growth potential for the major economy.

1.4445 is a previous low and should it be broken, 1.4 will probably be tested next.

Trade Safely.

Related Forex Articles from the Koala Forex Training College.

• How to identify support and resistance lines

EUR/USD Daily Review 5 Jul 11

EUR/USD Weekly Review 3 July 11

Good day forex trading koalas.

Did you make a profit from forex this week? I hope you did. Do remember that forex is not a path to instant riches! Slow and steady wins the race.

In the previous EUR/USD Weekly Review, we noted from a technical analysis point of view that the SMA 20 is still above the SMA 50 and hence a cross over would be more of a confirmation. Furthermore the previous upper trendline of a bearish channel continues to provide a sizable support for any bearish exploitations. From a fundamental analysis point of view, both the American and Euro Zone economies face respective challenges and the recoveries face the threat of a derailment.





Technical Analysis:

Looking at the EUR/USD Daily chart above, as mentioned last week the upper trendline of the previous bearish channel continues to function as a support. The currency pair bounced off the line and embarked on a bullish climb towards 1.46. This was also a result of the region of 1.42 holding it's fort.

SMA 20 = Downwards, flattening
SMA 50 = Downwards, flattening

I mentioned previously that having the SMA 20 crossing below the SMA 50 in a bearish momentum would be a stronger confirmation. It did not happen and since then, the EUR/USD had climbed into an ascending momentum. The SMA 20 is now above the SMA 50 and i will be looking out for both SMA 20 and SMA 50 to round the bottom and point upwards. As the 1.46 region is a strong support area, care must be employed. Early June also saw the EUR/USD failing to penetrate this region.


Fundamental Analysis

The bullish momentum of the EUR/USD and the ease at which it flew past 1.44 suggested that sentiments might be improving.

Earlier in the week, Greek Prime Minster garnered enough votes to implement the first phrase of an austerity plan. This was a relief as it meant that the European Union EU and the IMF will probably disburse further aid. I mentioned that the markets were pretty much going with the flow of the Greek budget deficit crisis and indeed the markets were. The US S&P 500 gained much too as a result of improved risk appetite due to the reduced risk of a Greek default.

Further positive developments were reported as the Euro Zone approved the aid disbursement to Greece. This was a big relief and the Euro Zone also pledged to push on for a formation of a new bailout package to further move the country away from a default. These actions give the markets the confidence that the Euro Zone will probably draw the line at the possibility of a default. Next focus will be the IMF's share of the assistance.

Across the English Channel, the pound declined to a 15 month low against the Euro as growth outlook for the UK economy falls. Manufacturing growth unexpectedly fell in June.

The US Non-Farm Payroll is due this Friday and caution is advised since the US employment market remains unstable.

Trade Safely.

Related Forex Articles from the Koala Forex Training College.

• Making use of moving average indicators
• US Non-Farm Payroll Review 3 June 11
• The US Unemployment Crisis
  

Read more about the EUR/USD at my buddy's great blog.

Forex Crunch writes a weekly EUR/USD outlook. It is a very popular write up and he is one of the best.

EUR/USD Weekly Review 3 July 11