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Euro Makes Low And More..
By Benny Nardino | October 2, 2008
LONDON: Euro dollar, EUR USD makes new 12-month low of 1.3746 in today’s trading after an early morning of choppy trades. The day started with Frankfurt riding the pair to 1.3965 in the first hour before it quickly descended to 1.3854 even before the main European currency markets opened in London.
With the halo of the Market Rescue Bill Vote (passed by the US Senate last night) hanging over the global market, this continued to put some pressure on the EURUSD as less traders commit to play.
New 12-Month Low
However, as far back as March 2008 we have warned you about the present trading condition saying and writing posts like these, (EUR/USD Surges Set For The Big Fall, EUR Retests Two Weeks High ) etc.. It seems at odd against the flow. But today we have been proved right.
On the contrary, looking at the global economic state of affairs at the moment, we are anticipating further fall to support level highlighted on the chart in the near-term unless geopolitical or natural disaster happens to sway this trend.
The fundamental economic numbers coming from America and Europe especially, does not favor positive outlook to suggest otherwise. For example, the months of constant crises of foods, high energy costs, soaring euro was weighing in on the euro-zone economy. The service sectors like tourism were been hit significantly. This ultimately translate to less sales on the high-streets, less exports of goods and services from the EU-Community because of the EUR strength.
At the moment, the World is gradually sliding into recession as consumer numbers recedes. Although Governments may hesitate to use the ‘r’ word. But unemployments are rising in key sectors like construction, banking and many more. This is a strong indication. The whole economy is feeling growth retardation syndrome. Where will the banks get more money as present economy does not encourage savings?
On the currency front, today saw most economic news coming as expected yet the market still found levels southward. An indication of lack of confidence in the market place. The chart above is an indication of the current volatile state in the forex market. The Euro is in the process of correcting itself having run wild in the past 12-month against the dollar.
Bearing these factors in mind, we are confident to tell you that it is grinding to acceptable levels of comfort with the dollar, USD. Although pairity stands around the 1.22/1.25 levels but we see a near-term support of around 1.3330. Don’t go wide. Trade with caution and protect your capital.
Tags: Currency, currency markets, dollar, economic news, energy costs, eur, euro, EURUSD, fall, Forex, Forex Trading, high energy, low, make, makes, Market, more, USD
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