Market open Asian session hooked on a positive sentiment, sending dollar and yen down across the board. Asian stocks close quite positive, but Europe change things and market is now in correction mode.
With stocks turning to the red side, European producer prices fell more than expected highlighting the increasing risk of deflation in the region. Factory-gate prices in the euro region fell 1.8 percent from the year-earlier month, the most since April 1999, while retail sales fell 0.6% in February, for a 4% decline from the same month last year. Market was expecting a 0.4% monthly fall and a 2.5% YoY decline. Inflation pressures continued to ease at the wholesale level, with February producer prices falling 0.5% from January and 1.8% compared to February 2008.
Previous week rumors of an intervention in the forex market, has found bases today after Lorenzo Bini Smaghi, ECB Executive Board member said the bank can intervene in the currency market if needed. He said: “Exchange-rate markets are prone to episodes of overshooting and undershooting,” “Public intervention -- in the form of public statements or even outright interventions in FX markets - - may thus be warranted.” These words, are putting extra pressure in the hegemonic currency, that break under 1.3400 level at the beginning of American session.
Wall Street stocks and future slipped at the opening, with DJIA still unable to break above the 8000 and almost 100 points down with technology shares leading the retreat after a breakdown in IBM and Sun Microsystems talks. Sentiment has turn and is favoring greenback that continues pushing higher across the board, followed by Japanese yen that anyway remains weak at the moment, and holds above the 100.50 level against Usd.
Eur/Usd overview
Euro has turned bearish both in 4 hours and daily charts, and find support at the 60 EMA in the first one. With indicators pointing for further downside continuation, if price manages to move under today’s low, consider supports at 1.3311 and 1.3260 zone, probable minimum target for today. Being oversold in small time frames, the probably could return to the 1.3420 zone, and above 1.3470 if the mentioned 60 EMA holds the downside. Longer term perspective remains range bound between 1.3100/1.3700 levels. Either way, pair needs to confirm at least with a daily candle opening under or above the mentioned congestion zones to define a more certain direction for the rest of the month.
0 comments:
Post a Comment