Euro Reaches New All-Time High
The Euro advanced against the Dollar to a new record high of $1.5983, marking the worst decline in Dollar value against the Euro since its inception in 1999.
Forecasts expect a weak manufacturing report in the Philadelphia region to cause the Federal Reserve to cut the benchmark interest-rate.
Michael Klawitter, a currency strategist at Dresdner Klienwort in Frankfurt said, “the bearish dollar sentiment is deeply entrenched. The market wants to see $1.60 printed, there’s not much doubt about that. It’s just a matter of time.” - Bloomberg
The Federal Reserve Bank of Philadelphia is expected to release general economic index data at 17:00 GMT. Following on from the past five months, the report has come out negative, signalling contraction in this area of the economy.
Write-downs
The worlds largest broker Merrill Lynch is releasing earnings figures today, with expected write-downs in the region of $6bn to $8bn on debt securities.
Citigroup are releasing earnings figures tomorrow. We reported earlier in the year on a Citigroup dividend cut, and huge write-downs of $20bn. We also reported on $39bn worth of bonuses on Wall Street despite huge losses.
The negative earnings figures are likely to hit the USD further in coming days, pushing the Euro closer to the $1.60 mark.
EURUSD Technical Chart
From the EURUSD 1-hour chart we can see a strong up-trend sitting within a channel of support and resistance.
Although the stochastic is breaking through the 80 (overbought) line, we would look for BUY signals, as the US data report later is predicted to continue on from five months of negative results.
The chart shows that the price approached an all-time high yesterday, then retraced through the 23.6% Fibonnaci line, before today rising to an all-time high of $1.5983.
Both the 20-day and 55-day moving averages remain in a strong up-trend lending agreement to further Euro gains in coming days. An entry point would be a drop of the stochastic to below the 20 (oversold) line, then hooking up above the 20 line giving us an entry. Also look for retracement to either the 23.6% or the 38.2% Fibonnaci line to give a stronger indication for entry.
[top]
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
Well in the UK we still have the Pound sterling rather than the Euro, however, the Euro is strengthening against the Pound as well as the Dollar.
The UK is incredibly expensive for practically everything. Income tax, council tax and incredibly high petrol costs. It looks set to go up further later in the year as well - but there we go. Such is life as they say.
How has the rise in the Euro affected life in Europe? Is it more expensive living on a day to day basis?