A warm welcome from OnlineForex.com- the Online Forex Trading expert! We are all about the fundamentals here: it's our view that you need a clear understanding of all the trends going on in the markets before you start trading for the day, so that you can trade with the overall currency flow or at least know when you are trading against it. Remember to think about your time frame- are you trading hourly, daily, weekly or monthly forex trends? You get the picture. Take a view on the trend that matches your timeframe, while keeping an eye on the amount of volatility in the markets.Friday update Few bounces around leave Euro near lows
With little in the way of a bounce for Equities or commodities forex markets seemed happy to trade in narrow ranges with EUR/USD 1.2900 and 1.2950. Elsewhere it was the same with EUR/JPY around 103.50 while sterling couldn’t quite make a test of the EUR/GBP 80.00 level before nudging back to 80.40.
Its the same old story. Greece in a political mess and Spanish banks causing worries. Greece looks headed to another election with few left to try and form a government. Greek far left leader Tsipras´s Syriza party has picked up in the polls to over 25% from 16% in the election causing fears the anti austerity party may yet gain power. In the end it may force the others into an unlikely coalition.
In Spain we are due to hear from pm Rajoy on banking plans but the 35 billion in new capital being talked about is considered by many to be way short of real requirements. Spain is desperate not to give up its fiscal independence by having to be bailed out. There is talk of them being given some slack in deficit targets , we shall see.
In any event these problems remain Euro bearish. I mentioned a bounce yesterday and with technical indicators very oversold for the Euro that still has to be a possibility although without some major positive in Spain or Greece sellers of Euros on any bounce will be seen.
Yesterday the Bank of England ( BOE) left things alone as we suspected. Inflation has been above BOE targets for so long a further bout of QE at this stage would leave them with a huge credibility problem. In the meantime the pound continues to benefit from self haven status in Europe. London property seems to have become a refuge for wealthy Greeks, Italians and even the French now. Spanish bank accounts are emptying leaving those banks almost out of LTRO funds. Quite how the ECB will unwind this remains a mystery in current conditions, and what’s more there will be pressure ahead for more. How the ECB reacts to that could be crucial. In any event not much to get positive about the Eurozone or their currency.
Headlines
- UK.. No change from the BOE on rates or QE. Manufacturing data was a little more upbeat then expected. The British pound should continue to strengthen against the Euro although EUR/GBP 79.50 to 80 level may take some time to give way.
- Spain… All eyes on announcements from the banking sector. Regional tensions are set to continue with Madrid
- Greece… Last chance saloon for parties to form a government with more elections in June looking most likely
- US… GDP forecasts moved lower while Fed´s Bernanke still sits on the fence on more QE
- EU.. Ministers to meet on Monday… EU meetings still seem to take on the mantle of fire fighting missions. No respite from Greece although it is Spain where the real battle remains and contagion the biggest fear.
- Oil… No bounce from its $10 fall over the last week. A decent fall in oil prices would be a huge lift to ailing economies and consumers.
- Gold.. $1580 has failed to get back above $1600 and not far away from what might be a big fall.
I am in Ireland again unfortunately in very sad circumstances. Talking around it seems that austerity fatigue is growing and the fiscal pact referendum on May 31st may be closer than polls suggest..By overwhelming consensus Ireland has a gold star from the EU on its efforts but at the moment there is little in the way of economic blue as reward. The economic climate remains as their weather is, grim
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