Thursday February 3, 2005 - 10:20:22 GMT
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Forex Morning Meeting - European Session, 3/2/05
Good morning everyone from FXstreet.com. The Crude oil is trading around the $46.6 level, virtually unchanged with respect to yesterday’s levels. In the US stock markets, the Dow Jones Industrial continued to move higher and closed shy below of 10.600, despite FOMC’s rate increase by 25bp to 2.5%.
Forex Technicals at a glance
Euro/Usd : At the time of this writing, the pair is trading around the 1.3015 level. The single currency reacted somewhat negatively to the interest rake hike in yesterday’s FOMC announcement. The gap between the Eurozone and the US is 0.5% in greenback’s land favour. Not long ago the gap was 1% in Eurozone’s favour. Does this mean anything at all? Well, one’s lecture could be that the US economy is growing at a better and that it presents better fundamentals than Eurozone’s. But things are not that easy, and the reading I myself do of all this is that US economy, despite strong and adverse trade-deficit numbers, it is managing to hold a growth pace we are not seeing in Europe for some time now (Germany at its worst unemployment rate level since world war II ..). Therefore, one could think that this weak-USD policy is more a non-written agreement by politicians in both sides of the Atlantic, rather than a mirror of the real economic fundamentals in both areas. Technically speaking, and on a daily basis, nothing has changed and key levels are still holding for now, but I’m not sure they will hold much longer than the key US unemployment report due out in Friday.
Moving averages overview : EUR has its 200-day moving average today at 1.2548. We have a bearish cross from the 2 shorter moving averages for some time now, with the 20-day crossing down the 50-day.
Indicators watch : Indicators watch-level 1 (signal generator): EUR Neutral. Indicators watch-level 2 : EUR Neutral.
Gbp/Usd : At the time of this writing, the pair is trading around the 1.8855 level. The pair still trades between the 20 and the 50-day moving averages, sideways for now, pretty much in line with the rest of the majors. However, while capped below the 50-day moving average and the current short-term trendline, its outlook is negative.
Moving averages overview : GBP has its 200-day moving average today at 1.8397. We have the 20-day moving average cross the 50-day on the down for some time now. Pair is above the 20-day, and it is currently trading between them.
Indicators watch : Indicators watch-level 1 (signal generator) : GBP Neutral. Indicators watch-level 2: GBP Positive.
Usd/Chf : At the time of this writing, the pair is trading around the 1.1950 level. Keeps playing its own game with the key 50% retracement of the previous downleg level ... Looks like a “funny game”, that I’m pretty sure will end up on Friday. Technically still in good shape but it is unable to gain further out above the before-mentioned level. This could cause a m ajor sell-off if longers get disappointed and abandon the long boat.
Moving averages overview : USD has its 200-day moving average today at 1.2248. The 20-day holds above the 50-day after the bullish cross a few days ago. Pair is trading above them both.
Indicators watch : Indicators watch-level 1 (signal generator) : USD Bullish (signaled long on december 30, 2004). Indicators watch-level 2: USD Neutral.
Eur/Gbp : At the time of this writing, the pair is trading around the 0.6900 level. As presented yesterday, the fact that the pair is unable to re-gain the uptrend channel makes it look weak for the time being. Furthermore, today we have the confirmation of the bearish cross that I told about yesterday. Therefore, selling EUR vs GBP should at least yield some in coming sessions.
Moving averages overview : pair has its 200-day moving average at 0.6817 today. We have the bearish cross from the 2 moving averages confirmed today.
Indicators watch : Indicators watch-level 1 (signal generator) : EUR negative (signaled short on january, 10). Indicators Wacth-level 2 : EUR Neutral.
Indicators watch-Level 1 : Trend indicators Direction, providing some useful investment information.
Indicators watch-Level 2 : Momentum Indicators Direction (working in pairs), providing current market sentiment for the instrument.
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