15/1/2009 - The Current Market Sentiment



As we have formerly expected, the single currency profit taken
pressure could take over after the recent massive decline of the
single currency waiting for this .5% widely expected cut with Trichet
upgrading the inflation outlook in the Euro zone by mentioning that it
will pick up in the second half of this year.
The next intermediate resistance is at 1.331 then 1.3475 then a major
resistance at 1.375 getting above this can meet a stronger resistance
at 1.382 whereas the recent fall beginning. The way down can face
further difficulties at 1.3 psychological supporting level then the
major support level at 1.284.

Trichet's comments could give the market a higher interest rate
outlook of the interest rate in the euro zone as rises of the
inflation upside risks in the second half were not discounted which
can not leave the door open for further massive cuts giving the single
currency a competitive mark versus the British pound and the
Trichet has mentioned that the ECB will take the necessary decisions
in the face of the growth slow down of the European economy in the
same time but reaching 0% interest rate level in the Euro zone has
become less possible right now and there can be a closer ECB pause
than what was expected.

Best wishes

FX Consultant
Walid Salah El Din
E-Mail: (e-mail address removed)


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