Forex Blog

Enough with the Blogger, its glitchy publishing system and the limited settings choice. I’ve decided to move my Forex blog to WordPress, as I find it very good CMS for my needs. Of course, in the beginning there will be a lot of things messed up because of it, but now you will probably have a better experience with the whole more clean blog. And the posts will be actually posted without waiting periods of more than 10 hours (because sometimes Blogger just didn’t want my posts to be published).

As to the Forex market, not much news here today. U.S. factory orders for December rose 2.3% instead of the expected 2.4%, but it was still better than 1.5% previous value. This news probably made some difference for euro and EUR/USD rose about 30 pips up today.

Euro is dropping down against the U.S. dollar for the fourth day in a row now. Declining stock markets force traders to cash out into dollars, increasing the demand for them. Today’s fall is minimal (less than 20 pips), but still keeps euro from rising and dominating over the dollar as it has been doing in 2007.

Leading indicators in U.S. released by the Conference Board showed a decrease in December by 0.2% after 0.4% drop in November, but still worse than 0.1% decline that was expected by the markets.

Reuters/University of Michigan released the preliminary results of its sentiment index today showing the unexpected rise from 75.5 to 80.5, while analysts expected a drop to 74.5.

Today EUR/USD hit 1.3738 mark renewing its maximum since 1995. So we are at the almost twelve years maximum now and the possibilities for going even farther are getting higher and higher. Not many reasons for such a strong Euro rally for today. The only good ones I can think of - oil prices rising and some Eurozone financial leaders speaking of support for an expensive Euro. Other than that - only some really powerful bullish speculators could EUR/USD in such a dramatical way. Anyway, it’s a good time to be in the market and get some more pips on falling dollar when EUR/USD breaks the 1.3800 level.

Euro is floating in a rather tight range since it hit its new long term high at 1.3688 on 04/27. The corridor for EUR/USD seems to be established between 1.3670 and 1.3590 levels. Even poor fundamental data seen on Monday hasn’t provided any help for Euro in breaking the new record. Possible reasons for this I see in two factors. First - French elections, although their outcome is known with almost no doubts, this factor still possesses some threat to European currency. Second - technical resistances - current EUR/USD rate is near several resistance levels (from long term highs to various waves ends), while weekly RSI is showing an overbought condition. We’ll have to wait for the next week to see if Euro is still able to rally and break new heights.