Forex Update 28 September 2012

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Financial Spreads: Spread Betting and CFD Trading

Forex Trading: 28 September 2012

The unveiling of a Spanish austerity budget with €40 billion of spending cuts offered the common currency a bit of breathing space yesterday.

Forex spread trading investors seemed to assume that this will mean that a bailout is just around the corner. As a result, they rushed into the euro, boosting its price by 40 points to $1.2913.

This morning, the euro is still on the advance, taking the euro-dollar pair to $1.2930, as France is expected to announce its own austerity package in a few hours.

Forex Trading: 27 September 2012

The anti-austerity protests in Spain and Greece have highlighted, once again, that it is extremely painful to implement fiscal reforms, and success is by no means assured.

To make things worse, yesterday we saw something of a blame game as Germany, the Netherlands and Finland said that Spain should bear the cost of its banking system's problems.

Therefore, it was little surprise to see the euro dropping against the US dollar in the FX spread trading markets, with EUR/USD losing 30 points to $1.2873.

This morning has seen a slight recovery, with the currency pair trading at $1.2890.

Forex Trading: 26 September 2012

The fact that some ECB members had expressed doubts about the success of the bond buying program continued to weigh on the euro yesterday, with the EUR/USD pair falling 46 points to $1.2883.

In addition, the growing social unrest in Spain, as the country plans another round of austerity measures, is adding further downside pressure to the shared currency.

This morning, the risk adverse sentiment in the CFD trading markets has only seen the EUR/USD decline by a few points to $1.2870.

The bears have got their eyes on support at $1.2855 and $1.2830, whilst resistance is seen at $1.2950/70.

Forex Trading: 25 September 2012

Germany, Europe's biggest economy, showed some weakness yesterday as the IFO Business Climate figure dropped for a fifth straight month.

In addition, the whole pushing and pulling regarding Spain seeking a bailout does not help, casting further doubts on a short-term solution for the sovereign debt crisis.

Consequently, the euro pulled back 45 points to $1.2930 as it becomes increasingly apparent that Draghi's bond buying program will not solve every problem.

This morning, there's a hint of bearishness in the single currency, with EUR/USD trading at $1.2915 at the time of writing.

Forex Trading: 24 September 2012

In forex trading, the EUR/USD pair initially climbed on the back of speculation that European officials were planning to come up with a Spanish bailout agreement as early as this week.

However, the shared currency gave back the gains towards the close, finishing just 7 points up at $1.2964, as participants didn't want to stay exposed over the weekend.

Investors have clearly noticed that a number of recent Eurozone announcements have been released during weekend.

Forex Trading: 21 September 2012

In the forex spread trading markets, the US dollar has resumed its weak trend, but in truth the majors are still pretty much in the ranges that have dominated for years.

The euro/US dollar pair is having problems holding above the $1.3100 level, but is also finding support below $1.2950. Our clients are following the current trend, however, and are buying any weakness.

Forex Trading: 20 September 2012

The currency markets are continuing to meander around, with the latest returning fear being the US 'fiscal cliff'.

Nevertheless, realistically, we know that the Senate/Congress/President will cobble together some emergency package, as they have done over the last four or five similar instances.

The euro/dollar pair has bounced more than $0.10 from the July lows, and is now taking a breather by retracing back into the early 2012 trading range.

Forex Trading: 19 September 2012

Following growing social unrest, Spain is looking reluctant to accept austerity measures that will trigger a bailout call to the European Central Bank.

As a result, the euro was hit yesterday, losing 69 points to $1.3043, after rising sharply from around $1.26 in less than two weeks.

This morning, the EUR/USD pair is at $1.3070, just edging higher following the Bank of Japan announcement.

At the same time, the increased quantitative easing measures have caused some excitement for the yen. The EUR/JPY market has jumped over 100 points from the mid-¥102 area to the mid-¥103 area.

Forex Trading: 18 September 2012

The euro/dollar pair closed marginally lower yesterday, just settling above the $1.3100 level, as Eurozone finance ministers failed to agree on the banking sector union.

Nevertheless, pausing for breath after the last two weeks' impressive surge could be regarded as consolidation by the bulls before the next rally.

This morning, the single currency is at $1.3075, and forex analysis suggests that near-term support and resistance levels are at $1.3015, $1.2975 and $1.3140, $1.3170 respectively.

Forex Trading: 17 September 2012

We saw a risk-on day last Friday, as forex investors continued to sell the US dollar and rushed into the shared currency instead, pushing it 144 points higher to $1.3130.

The fact that the European Central Bank also expressed its support for a bond buying program during the week seems to have been of lesser importance as it became 'old news'.

This morning, EUR/USD is just seeing a little bout of weakness by trading at $1.3100.

The next targets for the bulls will be the near-term resistance levels seen at $1.3170 and $1.3205.

By Simon Denham, 28 September 2012

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