[Branch closed!] EURUSD - Trends, Forecasts and Consequences (Episode 4) - page 208
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2011.06.08 17:42:04 MARKET TALK: Dollar declines on Fitch statement
USDCHF is on the rise.
And if you take the situation with Japan, it was a circus on the charts. To be honest, I worked it back and forth, but scratched my head for a long time afterwards.
The single currency fell against the US dollar as the likelihood that the European Central Bank will accelerate the pace of interest rate hikes this year has declined and markets expect that, having increased the cost of financing in July, the ECB will not change it again for a long time.
Moreover, during yesterday's press conference Jean-Claude Trichet announced that the central bank will not directly participate in the second bailout package for Greece. The ECB chief noted that the central bank is ready to adopt a plan under which investors could voluntarily agree to buy Greek bonds in exchange for debt maturing near the end of the year, but the ECB itself does not intend to conduct a "rollover" on the obligations of Greece under its ownership.
Analysts at Daiwa Securities expect the euro to weaken. Experts believe that Trichet is not going to compromise now, when the ECB has already shouldered the main burden of maintaining the Eurozone during the crisis. The European Central Bank began buying bonds of debt-ridden eurozone countries in May last year. According to estimates by Barclays Capital, during this time the central bank bought €75 billion worth of European debt under the Securities Market Program, which eurozone monetary authorities emphasize is temporary and not designed to finance debtor states.
Thus, the European Central Bank is trying to convince the leaders of the eurozone countries to prevent default without a forced restructuring. The tough stance taken by the ECB means eurozone leaders may have no choice but to ask their taxpayers to fund Greece, whose budget deficit will reach 90 billion euros ($130 billion) in 2014.
Deutsche Bank analysts note that while the ECB cannot buy bonds on the primary market, it could persuade the country's private bondholders to conduct a "rollover" if it starts buying bonds on the secondary market again. From their perspective, Trichet's comments clearly show how far the Eurozone authorities are from a mature solution to the region's problems.
On 23-24 June the EU itself will hold a bailout for Greece. Bloomberg news agency reports that according to 2 unnamed representatives of the European leadership, the second aid package to Greece will amount to 45 billion euros.
Currency strategists at Citibank say the ECB's attitude towards inflation and interest rates has not been as tough as markets expected, prompting investors to sell the single currency.
Experts expect the central bank to increase the cost of financing next month. However, economists are not sure that the ECB will continue to tighten monetary policy after that. In their view, the EUR/USD is likely to fall to $1.43/$1.42 in the near term.
Quite strong support for the euro is located at 1.4419, representing a 38.25% Fibonacci retracement of the rate hike from May 23 to June 7. Resistance for the pair is located at $1.46.
Analysts at BNY Mellon stress that the market is currently gripped by worries about disagreements amongst the eurozone leadership.
The single currency's two-week rise against the US dollar stalled this week around 1.4700, not far from the 78.6% Fibonacci recovery from May's rate cut.
Technical analysts at Commerzbank note that the short-term outlook for the EUR/USD pair has changed to negative.
In their view, the euro is now moving down towards the support of the Ishimoku Cloud at 1.4295 and towards the recent low near the 200-week moving average at 1.4007/1.3968.
The euro remains under pressure against major currencies as prospects of further ECB interest rate hikes diminish. Yesterday's comments by ECB President Jean-Claude Trichet on inflation and GDP forecasts for 2012 caused investors to revise their forecasts on the pace of interest rate hikes in the eurozone. The market now expects the ECB to take a pause for a while after the July hike.
That's what the Wavehunters are drawing:
I closed all my eu bets and don't forget greed will not do you any good.
Now there may be a strong pullback soon, but I'm tired and I'm done for the day.Mixon777 Dispute on https://www.mql5.com/ru/forum/133593/page198 confirmed
at the time of writing it had 5120 cents on it
1.432567 approximately here