Euro Still Suffers Aftershocks
The Euro has been hit by the Italian earthquake and by weak Retail Sales, and seems lost. Which direction will it take? I see a gloomy picture.
EUR/USD 
began the week with a neat weekend gap of nearly 100 pips. The new forex trading week sent EUR/USD above 1.35, and almost at 1.36. But this didn’t last for a long time.
The earthquake in Italy wasn’t good for the Euro. EUR/USD began declining. Later during the day, European Retail showed a fall of 0.6%, double the early expectations of a fall of 0.3%.
Image Credit: Sunrise Seven.
Also negative PPI (-0.5%) weighed on the Euro. Although this figure was expected, the previous figure was revised downwards from -0.8% to -1.1%.
So, deflation is becoming a real threat in Europe. Jean-Claude Trichet has no choice but lower interest rates lower. These figures may push him to move lower than the anticipated 0.25% to 1%. May’s rate decision may be more than a complementary step to April cut. It may go deeper, maybe to 0.75%.
All in all, the dollar is losing ground around the world – optimism of fast recovery lowers fears and sends traders to higher yielding currencies. But the Euro doesn’t enjoy it. It has it’s own problems.
Currently, EUR/USD is trading at 1.3364 and looks confused. It’s still looking for a direction. I believe that the direction will be down.
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Excellent insight! Many people who are just getting started with Forex fail to see the global impact of the market as a whole.
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German Trade Balance was better than expected… it didn't bring much momentum before 45 minutes later which was the French Trade Balance.
French Trade Balance was within expectations, and it stirred EUR/USD to go up.
But why German Factory Orders m/m was worse than expectation didn't stop the momentum created just now? Instead, it went soaring high near 1.3310.
Wait and see the FOMC Meeting Minutes…
good info for me…
when euro can stabil???