With the recent reports on Greece and other European countries as to their financial status, debt payments and deficits mounting in high levels have prompted to aggravate the EUR/USD situation as it headed lower to its initial support price of 1.3585 low last Feb 05, 2010.
However, even before that announcement the EUR/USD has already been heading south of the charts due to the continued strength of the US Dollar since December 22 and some FX price reversal price signals since the last quarter of 2009. Although, the negative sentiments could not be shaken out from the market place that made it bias towards selling the USD on the way up. Until such time towards the end of the year 2009 and the beginning of 2010 when traders and some speculative sellers of the US Dollar threw in the towel where such market capitulation were seen. Position trades and investment shift from stocks to USD flight to quality made the US Dollar to move higher than most expected.
When the Euro came down on its support price of 1.3585 and the Bloomberg's most recent report on the 8 Billion short-sell of the Euro due to the European countries financial troubles with a particular attention to Greece. However, Germany's intention to provide assistance have made the EUR/USD pause from a high of 1.3840 and currently working at 1.3767 corrective move. Such confusion are present in the market as the relationship of the USD with the lowered DJIA have made investors weary of what is next to happen.
We do expect that the Foreign Exchange Market specially for the EURO to make some wild price fluctuations since a dramatic trading from 1.3585 to 1.3840 is wide enough for retail investors to get trapped in a volatile market.
Watch the lead currency as of now and try to analyze the market even before considering trading. Thank you and Good Luck in your trading!
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