[Archive!] FOREX - Trends, Forecasts and Consequences (Episode 7: September 2011) - page 70
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The main event of the last 24 hours is certainly the announcement of a global dollar credit line. The Fed, the ECB, the Bank of England and several other central banks will provide three months' worth of money in unlimited amounts. This will definitely help avoid tensions in the money market at the end of the year. In the absence of decisive action by the regulators there could well have been a real collapse, but liquidity is now ensured. The publication of these statements has "sunk" dollar LIBOR to multi-month lows. However, the news did not have a sustained negative effect on the dollar. The EURUSD only tried to test the resistance levels, which were support a few weeks ago. However, it looks like this test will not be successful.
The market understands that if such actions are necessary, the situation is close to critical. And in such circumstances it would be rather strange to see a sustained buying of risk. On the contrary, investors would probably prefer to sell it at every burst of optimism. Therefore, we do not consider it prudent to change positioning, even in light of the latest news. Many analysts remain convinced that today's Eurozone finance ministers meeting with Timothy Geithner will be key for the market. It is the outcome of that meeting which is likely to determine medium-term trends. Demand for the yen is likely to remain at high levels and in the absence of any qualitative breakthroughs, EURUSD will remain under some pressure.
A workout is possible:
Here comes Merkel's help to bring down the euro by saying there is no quick fix for the debt crisis. Back in the upward three-day channel.
Will the euro rise, only after the fall(second...), or not? :-)(mid-term)
Will the euro rise, only after the fall(second...), or not? :-)(medium term).