{"id":11239,"date":"2010-07-21T08:12:54","date_gmt":"2010-07-21T12:12:54","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=11239"},"modified":"2010-07-21T08:12:54","modified_gmt":"2010-07-21T12:12:54","slug":"eur-higher-from-risk-appetite-ahead-of-stress-test-results","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/07\/21\/eur-higher-from-risk-appetite-ahead-of-stress-test-results\/","title":{"rendered":"EUR Higher from Risk Appetite ahead of Stress Test Results"},"content":{"rendered":"

Source: ForexYard<\/a><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/span><\/p>\n

For the moment, anyways, the EUR continues to enjoy the spotlight while the market awaits the results of the recent stress tests. Risk appetite in the market has surged from a wave of optimism. A number of analysts have been concerned about the EUR’s sudden surge, however, since there is little to support such movement. European debt concerns remain, growth continues to lag behind expectations, and the bank stress test results are due this Friday which may reveal just how bad off the region is financially.<\/p>\n

Economic News<\/h2>\n

USD – US Dollar under Pressure from Slow Growth<\/h3>\n

The US Dollar continues its decline against the other major world currencies. Concerns have been raised these past few weeks that the US economy is not recovering as quickly as previously anticipated. The decrease in expectations has put a damper on US investments and brought the USD down somewhat.<\/p>\n

Against its primary rival, the EUR, the greenback has experienced gradual declines to a current price level of 1.2900. Against the Japanese Yen, the greenback has actually fallen to a 7-month low near the 87.00 price mark. The buck doesn’t appear to be fairing too well against the British Pound or Swiss Franc either.<\/p>\n

Concerns about slowing economic growth may have increased with Tuesday’s housing reports, but today is expected to be a light news day. So long as market events continue to be ineffective at changing trends, the USD will continue its slide against the other major currencies.<\/p>\n

EUR – Is EUR Rising Too Quickly before Stress Test Results?<\/h3>\n

The EUR has experienced irregular optimistic movements these past several weeks. Despite a string of negative news releases, the 16-nation single currency continues to make gains on rising risk appetite. Some of the largest gains have been made against the US Dollar and Japanese Yen. The EUR\/USD has risen steadily in value and currently trades at 1.2900, while the EUR\/GBP sits at a present value of 0.8445.<\/p>\n

A number of analysts have been concerned about the EUR’s sudden surge since there is little to support such movement. European debt concerns remain, growth continues to lag behind expectations, and the bank stress test results are due this Friday which may reveal just how bad off the region is financially.<\/p>\n

For the moment, anyways, the EUR continues to enjoy the spotlight while the market awaits the results of the recent stress tests. Risk appetite in the market has surged from a wave of optimism. Since the EUR-Zone isn’t expected to publish any news today there is very little chance of a reversal and traders are still taking the opportunity to join the uptrend before it comes crashing down.<\/p>\n

JPY – Yen Trading at 7-Month High vs. US Dollar<\/h3>\n

The Japanese Yen has gradually gained against the US Dollar in this week’s trading. Asian stocks took a small hit last week, but they appear to be on the rebound as of yesterday. On the other hand, the JPY has been surging against the USD, with a current value near a seven-month low of 87.00.<\/p>\n

Against other currencies, such as the EUR and British Pound, the Yen has experienced similar gains. The EUR\/JPY currently trades near record lows of 112.50, while the GBP\/JPY also sits just above its all-time low with a current price of 133.23. So long as news reports come out neutral and with few surprises, there may be a strong chance for the JPY’s current trends to continue throughout the week.<\/p>\n

– Declining US Inventories Could Help Raise Oil Prices<\/h3>\n

The price of oil has been gradually rising this week as the US Dollar continues its decline. The volatility in the oil market appears to have subsided somewhat, following the successful capping of the gushing BP oil spill in the Gulf of Mexico. As long as the cap holds, speculators can take a more accurate gauge of market sentiment towards oil demand.<\/p>\n

The American Crude Oil inventories report is expected later today at 14:30 GMT. Inventories have been in decline these past 2 months and if they continue to fall we could see a continued rise in price. A target near $80 this month may not be far off the mark.<\/p>\n

Technical News<\/h2>\n

EUR\/USD<\/h3>\n

Yesterday’s steep decline may have brought the pair back in range as most indicators seem to be floating in neutral territory at the moment. Looking at the daily chart, it is evident that there might still be room for a continuation of the downward trend as the RSI is still floating in the overbought territory. Waiting on a clearer direction for the pair may be advised for today.<\/p>\n

GBP\/USD<\/h3>\n

The pair seems to be range trading at the moment, with most indicators floating in neutral territory. However, there is bearish cross evident on the Weekly chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short with tight stops appears to be preferable strategy.<\/p>\n

USD\/JPY<\/h3>\n

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. The 4 hour charts do not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.<\/p>\n

USD\/CHF<\/h3>\n

The typical range trading on the hourly chart continues. The daily chart RSI is floating in neutral territory. However, there is an impending bullish cross forming on the Weekly chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.<\/p>\n

The Wild Card<\/h2>\n

Silver<\/h3>\n

Silver prices are once again dropping, and it is currently traded around $17.60 an ounce. And now, the 8-hour chart’s RSI is giving bullish signals, indicating that silver prices might go up. This might give forex traders a great opportunity to enter a very popular trend.<\/p>\n

Forex Market Analysis<\/em> provided by Forex Yard.<\/a><\/span><\/strong><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":"

By ForexYard – For the moment, anyways, the EUR continues to enjoy the spotlight while the market awaits the results of the recent stress tests. Risk appetite in the market has surged from a wave of optimism…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11239","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=11239"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11239\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=11239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=11239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=11239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}