Better than expected German Factory Orders and Industrial Production had no positive impact on the Euro. The same holds true for the Dollar and the shrinking US current account deficit and worse than expected consumer confidence.
Actually, the US current account deficit with China widens, while net exports to Canada and the European Union were up. This is particularly interesting against the backdrop of Chinese foreign exchange reserves which are expected to rise above 2 trillion US dollars threshold last month.
A report from German newspaper Handelsblatt last Friday says the International Monetary Fund (IMF) holds talks with 10 Eastern European States on aid programs. This was the catalysator for the renewed EUR/USD move below 1.4000 on Friday.
There was no important currency news from the G8 meeting in Italy except a communique that the G8 group would avoid comparative currency devaluation. This might be a hint to the Swiss National Bank which is intervening in the FX Market to weaken the Franc against USD and EUR.
US quarterly results in the banking sector will be important next week. It is expected that banks like Goldman Sachs and JP Morgan will report pretty positive results. The effect on EUR/USD is difficult to predict but such news should be positive for US Dollar as European banks are still struggling.
EUR/USD has moved since early June 2009 in a consolidation pattern between 1.3747 and 1.4200. The recent move could be the beginning of a new down-trend, but needs further confirmation: The resistance at 1.4070 must hold and a break of the support zone between 1. 3747 and 1.3832 is required.
Weekly outlook
EUR/USD will move further sideways, a break of the support zone between 1.3747 and 1. 3832 will not take place. However, the greater risk will be trading EUR/USD on the Long side. Thus, for intraday trading the right timing is critical to benefit with both Long and Short positions. Position trader can use increases above 1.4000 to build short positions.
Actually, the US current account deficit with China widens, while net exports to Canada and the European Union were up. This is particularly interesting against the backdrop of Chinese foreign exchange reserves which are expected to rise above 2 trillion US dollars threshold last month.
A report from German newspaper Handelsblatt last Friday says the International Monetary Fund (IMF) holds talks with 10 Eastern European States on aid programs. This was the catalysator for the renewed EUR/USD move below 1.4000 on Friday.
There was no important currency news from the G8 meeting in Italy except a communique that the G8 group would avoid comparative currency devaluation. This might be a hint to the Swiss National Bank which is intervening in the FX Market to weaken the Franc against USD and EUR.
US quarterly results in the banking sector will be important next week. It is expected that banks like Goldman Sachs and JP Morgan will report pretty positive results. The effect on EUR/USD is difficult to predict but such news should be positive for US Dollar as European banks are still struggling.
EUR/USD has moved since early June 2009 in a consolidation pattern between 1.3747 and 1.4200. The recent move could be the beginning of a new down-trend, but needs further confirmation: The resistance at 1.4070 must hold and a break of the support zone between 1. 3747 and 1.3832 is required.
Weekly outlook
EUR/USD will move further sideways, a break of the support zone between 1.3747 and 1. 3832 will not take place. However, the greater risk will be trading EUR/USD on the Long side. Thus, for intraday trading the right timing is critical to benefit with both Long and Short positions. Position trader can use increases above 1.4000 to build short positions.
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