Forex Update 22 February 2013

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Forex Trading: 22 February 2013

On the economic data front, we've already seen the final German GDP reading come in as expected at -0.6%, so no surprises from the previous reading.

Later on, we will also see the German Ifo survey which, if Monday's ZEW is anything to go by, could surprise to the upside, even if it is already expected to come in higher.

Yesterday's Eurozone economic data disappointed again as manufacturing and services PMIs dropped by more than initially expected, implying a faster pace of contraction.

That doesn't bode too well for the Eurozone recovery and so the euro declined by 91 points, slipping below the $1.3200 mark for the first time in more than 6 weeks.

From a euro-dollar technical analysis point of view, the short-term trend has turned distinctly bearish, indicated by the crossing of the moving averages.

This morning, however, the currency pair is just about holding onto the $1.3200 level, with near-term support and resistance seen at $1.3135 and $1.3255 respectively.



Forex Trading: 21 February 2013

The latest Fed minutes caught forex spread trading investors on the wrong foot yesterday as they showed different opinions on the exit strategy.

That spurred demand for the US dollar and hurt both the shared currency and the equity markets.

The euro slumped 119 points to $1.3270, with the short-term EUR/USD chart showing a bearish trend.

This morning, that bearish trend is continuing, with the single currency slipping to $1.3250 at the time of writing.



Forex Trading: 20 February 2013

Yesterday's surprising rise in German economic sentiment, as indicated by the ZEW index, undoubtedly spurred buying in the common currency, pushing the EUR/USD pair 39 points higher to $1.3389.

This morning, the better-than-expected French business confidence figures have tipped the balance in favour of the euro once again, with EUR/USD breaking above the $1.3400 mark to $1.3410.



Forex Trading: 19 February 2013

We saw a quiet day's trading for the euro-dollar pair yesterday, ending unchanged at $1.3350.

The Presidents Day holiday in the US kept currency investors on the sidelines.

The lack of economic data releases for the Eurozone also limited euro trades, with participants waiting for today's economic sentiment report.

This morning, the single currency is still struggling for direction at $1.3345.



Forex Trading: 18 February 2013

Awaiting the conclusion of G20 talks in Moscow, currency investors appeared reluctant to commit too much and stayed on the sidelines, with the euro closing flat at $1.3357.

Traders wanted to see whether there would be any pledges or comments made by finance ministers or central bankers that would adopt a harder stance against government intervention to influence exchange rates.

In fact, there seemed to be no concern about the potential for fuelling a so-called currency war and, this morning, the EUR/USD currency pair is a little lower at $1.3335.



Forex Trading: 15 February 2013

The recession in the Eurozone looked to be deepening yesterday, as Germany, France and Italy reported shrinking GDP, which fuelled speculation about more intervention from the ECB.

Understandably, the euro tumbled against the US dollar, losing 87 points to $1.3358, with investors starting to price in extra quantitative easing.

Further weakness looks to be setting in this morning as well, with EUR/USD slipping to $1.3325.



Forex Trading: 14 February 2013

In forex financial spread trading, we initially saw a risk-on mood as US authorities hinted at embarking on another spending spree to spur economic growth.

That sent the shared currency above the $1.35 level, only for it to head back down later on, ending rather flat at $1.3445.

The reason for spoiling the euros party was a reminder that the European periphery is still struggling to stabilise: Portugal's unemployment rate increased to 16.9% from 15.8% previously.

This morning's GDP data has also knocked the stuffing out of the single currency as it trades at $1.3390 at the time of writing.



Forex Trading: 13 February 2013

Today's focus will be on the Bank of England's Inflation Report where they will show off their wonderful fan charts projecting the possible course of growth and inflation.

We can also expect some sort of explanation as to why their growth forecasts were higher than the contraction that was actually released for Q4.

There's a chance that they might even reduce their forecasts for the quarters ahead, which will make for grim reading for the Chancellor.

In terms of inflation, unfortunately crude oil and soft commodity prices simply have not been getting any lower.

Whilst the cost of petrol and food is likely to keep inflation ahead of target going forward, investors will want to know the BoE's view on how long that will last.

French President Francois Hollande's call for coordinated action to influence the euros exchange rate did not impress ECB President Mario Draghi, who said politicians should refrain from such comments.

If anything, the shared currency had a good day on the forex spread trading markets, rising 50 points to $1.3449; exactly the opposite effect to what the French statement intended.



Forex Trading: 12 February 2013

This morning, the economic data for the week starts to get underway, with UK inflation figures that are expected to show inflation remaining above the BoE's 2% target.

This is something that we've all had to get used to and this year's equity market strength has encouraged rising crude prices, meaning that petrol has remained stubbornly high.

As if the European Central Bank officials became concerned about last week's warnings of a strengthening euro, they now came out playing down those worries.

ECB member Jens Weidman said the shared currency is not 'seriously overvalued', which supported the EUR/USD buyers.

This pushed the euro 30 points higher to $1.3399, effectively recouping Friday's decline.



Forex Trading: 11 February 2013

Despite early signs of an agreement on the next EU budget, the shared currency continued its slump against the dollar on Friday, losing 33 points to $1.3365.

The falls were inspired by alarm bells from European Central Bank President Mario Draghi that a strong euro currency could slow the economic recovery.

No wonder the media is talking about currency wars again.

This morning, the EUR/USD market is neither here nor there, trading roughly flat at around $1.3375.


By Simon Denham, 22 February 2013


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