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EUR Declines On Morning Trades
By Rox Sweetman | April 24, 2008
Is this the first sign of the EUR crack in an overbought and overpriced currency? For two consecutive sessions running, it seems the EUR is experiencing two consecutive days of decline.
After the Asian session this morning, the European session opened tentatively with the German Ifo Business Climate Index Report lurking at 8am GMT.
The report fell short of expectation as indicated below and the EUR/USD dropped -100 pips decline within the first 45-mins of the news delivery. On the 15-mins timeframe there were slight consolidation.
On the contrary, the US economy riddled with bad news in the last few months, served up some good ones today with better than expected Unemployment Report. Unemployment fell by 30k. This resonated new optimism into the USD, dollar that pushed the EUR further down to 1.5700/5635 levels.
In recent weeks the EUR/USD has soared to new heights with little or no news at all. Within the next several weeks ahead we begin to see cracks on the euro zone economy when results of trades with the rest of the world would be coming clearer. The implication is that EUR/USD could also be faced with masive correction.
However, the chart here indicates a penetration into the 200-day moving average on the 4H-chart which indicates midium-term cracks. We believe a test on the 62% of the Fibonacci pivot could spiral a breakdown on the EUR front. In the mean time, we wait and see.
Below are the Economic News of the day - Forexfactory.com - Thu Apr 24
12:50am JPY All Industries Activity Index m/m -1.4% -0.4% 0.0%
12:50am JPY CSPI y/y 0.4% 0.7% 0.7%
09:00am EUR German Ifo Business Climate Index 102.4 104.3 104.8
09:00am EUR German Ifo Business Expectations Index 96.8 98.0 98.4
09:00am EUR Current Account 4.3B -7.9B
09:30am GBP Retail Sales m/m -0.4% -0.3% 1.1%
11:00am GBP CBI Industrial Trends Orders -13 4 7
01:30pm EUR ECB President Trichet Speaks
01:30pm USD Core Durable Goods Orders m/m 1.5% 0.5% -2.1%
01:30pm USD Durable Goods Orders m/m -0.3% 0.1% -0.9%
01:30pm USD Unemployment Claims 342K 375K 375K
03:00pm USD New Home Sales 526K 580K 575K
03:00pm USD Fed General Counsel Alvarez Speaks
03:30pm CAD BOC Monetary Policy Report
04:15pm CAD BOC Governor Carney Speaks
All Day AUD Holiday: Anzac Day
Have a great day of trading.
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