The highlight of the G20 meeting which may or may really not dictate the pace of the market will soon be seen this mid-trading week. Whereas the rescue package that may bring to a closing of the European Debt crisis is in full swing. Of course this is based on those reported issues that came about to even expand the bailout, an establishment of a recapitalization package and more importantly a reduction of as much as 50% of the Greek sovereign debt problem.
This has led some strategist and financial analyst to digest and course a plan of action especially for the FX market. The time frame we are looking at is the price behavior of the major pairs before the Oct. 23 and Nov. 03 where it is expected to be unveiled at the next G20 heads of state meeting.
Now between now and then, the initial market movement we have seen so far has been an overall corrective movement for the US Dollar and a considerable rally of the Euro from last week's trading. Except that the pullback of the US Dollar has been extended down to its previous low of 76.44 based on the US Dollar Index low establish at the opening of this week's trading. Pls. compare the inverse chart relation of these two pairs and see what you can derive from the market psychology of their market behavior at this early trading week.
The technical configuration of the USDX from the chart's perspective, as we have mentioned then on our 09.27 market view analysis, that the expected Ladder-like upward movement for the USD Index came true to its form. And completing the measurement of the previous consolidation channel and breaking away from the channel. Pls. refer to the Daily USDX Candlestick chart formation. Wile reaching a high at the 79.70/84 basis point on Oct. 04 trading. Had it not been for the fundamental news of Chancellor Merkel & Pres. Sarkozy support for the Euro, the rally would have found some impetus to move on but it did not.
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