EUR/USD Analysis
Good Morning,
Fundamentals first. Claims came is as expected, but what I take away from this is that they aren't improving. Tomorrow we have inflation data, but as the Federal Reserve has said, there isn't any inflation out there and if there was, we created it by weakening our dollar and we rather have a weak dollar that possibly provides growth. Speaking of the Federal Reserve, Bernanke was on the docket today, but I guess it wasn't anything market moving as I will show below in the technical analysis section.
I have lectured quite a few times on the real inflation that isn't measured such as the cost of education and other costs such as health benefits and prescriptions and certain consumer necessities. As "austerity measures" are taken in various regions of the world and cuts are made in budgets (people), what happens to the service we are used to seeing? That answer remains to be seen, but I have a feeling we will see more layoffs as a result of austerity measures.
Technically, the story is pretty easy to read in forex and equities. Let's look at the EUR/USD which is so damaged. Really? Have you taken a look at it over the past few months? It hasn't done anything really as far as the news that is out there about the impending doom. Why hasn't it gone down more since it could be "going out of business"? Because there isn't a great choice other than maybe the AUD as far as interest rates go and for right now, a solid economy.
Past performance is not indicative of future results
Looking at the equity markets, we have a similar pattern. We broke down through one support level and now are coming back up to it. Overall, until we break 1350, that is a pretty strong support level given the past few trading days and the buying that came in at that level:
Past performance is not indicative of future results
I am going to make sure I keep an eye on economic data and listen to the news wires for any announcements about interest rate changes, QE, austerity measures, etc...
Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
