Bearishness Towards The Euro

The tension is gripping markets still with the uncertainty over the stability in Europe and expectations for a Greek euro exit. The common currency is still trading sharply lower as hope dims ahead of the informal EU summit in Brussels today, where previous hopes for any action evaporated as Germany confirmed that its stance did not drastically change! Investors are still pushing the euro lower amid fear that Greece might be forced to default and exit the euro after the inclusive May 06 elections confirmed the wide rejection to the deep austerity measures. The market still sees high risks that the June 17 election might bring anti-austerity parties into the lead that will opt against austerity and refuse the bailout terms as Syriza did and that will cost Greece its membership. Investors ...

Major currencies are once again trending lower against greenback today after the Organization for Economic Cooperation and Development (OECD) downgraded its growth outlook for the euro area opposed to improvement in the United States. The U.S. economy is expected to strengthen this year and the OECD expects growth of 2.4% and 2.6% this year and next, lifting higher its November forecasts of 2.0% and 2.5% respectively. For the euro area the organization expects 0.1% contraction this year and 0.9% growth in 2013 which is worse than the previous expectations for 0.2% and 1.4% growth respectively. The OECD also downgraded its China growth forecasts to 8.2% and 9.3% this year and next from 8.5% and 9.5% leaving the U.S. economy till now the only with the positive expectations prevailing, ...

The Reserve Bank of Australia shocked markets with a 50bps rate cut this morning, the bank cut interet rate from 4.25% to 3.75% while markets were expecting an imminent cut of 25bps. Australia’s slowing economy and headache coming overseas from Europe in addition to the slowdown in its major trade partner China were the main reasons behind the aggressive move. Thus, we have seen the Australian and Newzealand dollar under pressure today. While most European markets were off for Labor day, the euro was well bid as the common currency bottomed at the support area and the 50-days SMA around 1.3220, to resume the bullish bias retesting areas near 1.3300 again, however 1.3300 seen the next important pivot for the pair over the short term. Above 1.3300 the door could be open towards March high ...

The week started with a flow of negative charges starting from downbeat data from China, elections in France showed anti-fiscal pact Mr. Hollande win the first round, followed by a deeper contraction in Euro’s manufacturing and services sectors. Markets were unpleasant; where risky assets took a harsh hit, looked powerless awaiting a helping hand, which may find in the awaited FED meeting Wednesday. With the lack of economic releases this afternoon, the negative sentiment is expected to continue dominating the scene. The EUR/USD pair fell sharply after completing a test of the 50-days SMA, where the overall ranging stance remains intact so far. The pair has formed a possible bearish pattern, thus we look for a retest of the major psychological support at 1.3000, which is the main barrier ...

Euro remained under pressure during the Asian and European sessions heading into the U.S. session down more than 55 pips. The pair has reversed from the descending resistance of the possible falling wedge pattern we mentioned yesterday. For now, we advise being cautious trading the pair as we are approaching the key technical support at 1.3000 psychological barrier, while traders anticipate the awaited bond auction from Spain tomorrow morning. Thus, the risk-on trade could be under threat within the upcoming hours. Technical wise, a breach above the descending resistance of the wedge could signal a short term recovery for the pair, for a possible retest of the latest high at 1.3215 and 1.3250. While taking 1.3000 shall be a major catalyst for further bearishness towards 2011 lows at 1. ...

Pessimism continues to dominate the trade, higher yielders extended their earlier losses against the green back today, as concerns over the euro’s recovery. The euro zone's outlook continues to be the push and pull game for markets, and pops up every now and then; today we saw downbeat employment and manufacturing figures that pulled the trigger once again. As investors seek shelter, the Japanese yen and the greenback found solid demand rallying against their major counterparts. The U.S dollar index fully filled the weekend bearish gap to trade back above the key short term technical resistance at 79.00, if we witness stability above this level the upside move could extend higher today, eying the 50-days SMA and the neckline for a possible bearish head and shoulder pattern around 79.30. ...

(Reuters) - The euro slipped against the dollar on Tuesday but stayed within its recent range as investors waited to see whether Greece will agree to painful austerity measures that are crucial for a rescue package to avoid a messy debt default. Optimism over Greece waned during the European session, dragging stocks and risk-sensitive currencies including the Australian dollar down from their highs. For Greece, failure to secure the 130 billion euro ($170 billion) rescue would mean it faces a messy debt default and destabilize the entire euro zone. "Clearly the tail-risk at this time is that developments in Greece lead to a disorderly situation and a sharp move lower in the euro," said Lee Hardman, currency strategist at BTM-UFJ. Citi's chief economist Willem Buiter raised the estimate ...

While talks between Greek government and institute of international finance progress, eyes and hearts are fixated to the long lasting story of Greece debt resolution, although reports suggested that a deal between the bond-holders and government is imminent the euro took a hit by weak start, after ending the last week at 1.3219, the pair dropped sharply on Monday to erase most of Friday’s gains printing a low at 1.3109. The jitters continue and market participant are anxious that today’s euro summit well maintain its latest trend of disappointments, as at this juncture the euro leaders are to continue discussing the measures they suggested before about approving and signing a treaty to create the euro rescue fund (ESM) of 500 Billion worth of Euros effective by July, and maybe combining ...

Fundamental News: Today's highlight; • Italian PPI (MoM). (EU, 9:00, GMT) • Housing Equity Withdrawal (QoQ). (GB, 9:30, GMT) The EUR/USD pair declined on Thursday, reaching the lowest level recorded since September 2010 after the Italian bond sale wasn’t as successful as expected, where yields on long-term bonds remained relatively high around the 7.0%, while the treasury was not able to sell as much bonds as targeted. Fears spread in the market after the Italian bond sale highlighted the inability of Italy to handle the high borrowing costs, where Italy sold bonds yesterday below the targeted quantity as yields remained unsustainable. After the major event ended yesterday (Italian Bonds Sale), volatility and fluctuations are expected to remain evident during the session today, ...