4th April 2012

UPDATE

Technical Fundamental

The Euros vulnerability re-surfaces

in association with

Disclaimer

Authorised and regulated by the FSA

1.6017 High

The Euros vulnerability re-surfaces

Euro - US Dollar
1.4941 High

in association with

UPDATE Technical Fundamental

1.3149 Low

Diagonal bear trend res is tance from August 2011

Jun Jul Aug Sep Oct N ov D ec 2011 Mar Apr May Jun Jul Aug Sep Oct N ov D ec 2012 Mar Apr May Jun

1.52 1.51 1.50 1.49 1.48 1.47 1.46 1.45 1.44 1.43 1.42 1.41 1.40 1.39 1.38 1.37 1.36 1.35 1.34 1.33 1.32 1.31 1.30 1.29 1.28 1.27 1.26 1.25 1.24 1.23 1.22 1.21 1.20 1.19 1.18 1.17

WEEKLY CHART
The market has failed to rally back above and stay above the neckline resistance of the large bear Head and Shoulders Note too the combined resistance from the falling diagonal that has helped to repel the bulls. So the big bear H&S Top remains intact. The minimum move needless to say, is down a long way..

Euro - US Dollar

1.365 1.360 1.355 1.350

DAILY CHART
The triple failure of the market to re-penetrate the neckline is revealing The possible H&S reversal is unmistakable. Note first though the test of the rising diagonal If that breaks the test of the horizontal 1.3006 will also be the moment of truth for the bears. WATCH 1.3006!

50.0%

1.345 1.340

Neckline

1.335
1.3320 High

1.330 1.325 1.320 1.315

1.3149 Low

1.310 1.305 1.300

Potential Neckline 1.3006 Low

1.295 1.290 1.285 1.280 1.275

1.2628 Low

1.270 1.265 1.260

Disclaimer

5 12 D ecember

19

26

2 9 2012

16

23

30

6 13 February

20

27

5 March

12

19

26

2 April

16

The Euros vulnerability re-surfaces

in association with

FUNDAMENTALS: Since the Greek rescue deal was agreed, albeit after a tortuous period of negotiation, the Euro has enjoyed a reasonably robust correction, back from the lows reached mid-January when speculation about the Euros imminent break up was rife. The correction was all the more impressive as it coincided with a strengthening of US economic data which, given the disparity between the US and Euro zone economies, should have favoured the Dollar. But after a long period of Euro weakness, traders seized the Greek rescue deal as an opportunity to take profit and re-assess the outlook for the Euro, hence the correction. And although the Dollar staged its own limited recovery through February into early March, driven by signs of stronger job creation and re-emerging concerns about the Euro zone debt crisis, it was snuffed out by comments from Fed Chairman Ben Bernanke. At one point his remarks sounded as though the Fed might be open to yet another round of QE, and indeed, last week he noted in a speech that US economic growth needed to be much faster to create the volume of new jobs needed to bring down unemployment, which was taken to mean the Fed could still ease policy further.

UPDATE Technical Fundamental

But, despite the Dollar suffering a self inflicted wound, the Euro hasnt been able to gain a clear advantage and again looks weak.

Disclaimer

Authorised and regulated by the FSA

The Euros vulnerability re-surfaces

FUNDAMENTALS: CONTINUED
in association with

There are three reasons in our opinion for this: 1. The US Economy continues to release data showing a strengthening recovery, with unemployment looking set to fall further as the weekly initial jobless claims report has declined to around 350k, 2. The Euro zone debt crisis, isnt, as the French President and German Chancellor earlier declared, over. 3. The FOMC minutes released this week disappointed equity traders but pleased Dollar bulls by showing the Fed looks less likely to ease again unless the economy unexpectedly slows. In short, the Euro zone economy is either on the brink of, or already in recession as the austerity measures demanded by the Germans bite. The Greeks have already said that they will probably be back for more help in the not too distant future as the economy continues to contract. Similarly Italy is struggling to get through needed labour market reforms to bring about a recovery. Spain too has seen her unemployment rate climb to about 1/3 of the working population and there are fears that the austerity measures she has adopted will consign the economy to years of contraction. Elsewhere in the Euro zone periphery the picture looks similar and a new phase of the debt crisis can not be far off. But in the US the ISM surveys released this week show an economy clearly embarked on recovery, and if Fridays non-farm payroll report shows the pace of new job creation at least being maintained or accelerating, the Dollar should rally further. Currency trading isnt about absolutes but changes in relatives and currently we judge the Dollar has most of them in its favour.

UPDATE Technical Fundamental

in association with

UPDATE Technical Fundamental

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