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Friday, August 27, 2010

Current expectations for September, 2010

Expectations in short for September -
Dollar - down
Gold - down
Stock markets - up


Today the FED again has reassured the markets it will continue its monetary policy of easy money in order to stimulate consumer spending and get US out of the trap. This alone will give enough  strength of the Euro to continue its advance as there will be expectations of increasing the amount of available Dollars on the market. The weaker Dollar will give more competitive strength to US companies and further improve their financial results. As a secondary effect the Crude oil value could increase.

On the other hand such stimulus money (or any other type of government support) would give markets the long awaited trigger to start trading positive expectations again.

As markets turn positive using Gold as a hedging vehicle would become less popular. Having a big enough drop in demand of Gold would pretty much turn the tide. A considerable drop in Gold price would scare most of the last crowd that entered the Gold market in hope to make some quick profits which would increase the selling pressure further.

All these are an expression of an analytic point of view. Will wait for the end of September to compare with the real data.

Thursday, July 29, 2010

Euro/Dollar (EUR/USD) Technical Analysis - Daily, July 29, 2010

The Euro/Dollar pair was in quite an uptrend for the last weeks. The graphs however show this could be close to an end. We examined the weekly graph in our weekly technical analisys and now the Daily one looks promising.

The Daily Euro/Dollar graph (click on it for a better view) shows the pair was making new highs for the last several weeks while the MACD continued to make lower highs. Now its even on the negative side. The Stochastic shows the Euro is now in the overbought area.
The bearish MACD divergence combined with the overbought condition could trigger pretty soon selling of the Euro after all the buying power gets too exhausted.

A possible trigger for such a movement could be any of the news expected today - the Unemployment change in Germany, the Economic confidence in EU, M4 Money supply in UK or the Jobless claims in USA. One may follow these news (and even more) in our Economic calendar .