2/6/2011 – The Current Market Sentiment |
The pressure has started to accumulate on the Single currency again after the release of weaker than expected May EU PMI Manufacturing index which came at 54.6 from 58 in April with strong easing of May Germane PMI Manufacturing index to 57.7 from 62 while the market was waiting for just 58.2 and this pressure has started to gain momentum following the release of US ADP unemployment index which has shown rising by just 38k from 175k in April while the market was waiting for adding 175k and also the weak figure of May US ISM Manufacturing index which eased to 53.5 from 60.4 in April and it was foreseen to get down to just 57.5 to accelerate the greenback back buying back as an investing funding currency pushing the single currency to 1.4306 before rebounding currently trading around 1.435
The single currency could get over 1.4344 reaching 1.4457 earlier this week on easing of the market concerns about the Greek debt outlook after released report of WSJ telling that Germany is considering not pushing for rescheduling the Greek governmental bonds which can reduce the probability of Greece default and open the door for having the required 12 billion Euros by the End of this month which is containing 2 EU finance meetings by EU summit on 24th June for bringing back the lost market confidence in the EU Debt markets which has been lost by the credit agency downgrading of Greece which has been followed by worrying about another countries do not face the same risks it faces like Belgium which could be downgraded by Fitch and S&P, if it is to miss its budget deficit target and Italy which has a negative outlook from S&P too.
That's beside the unrests against the austerities measures which temper the single currency exposing both of the Spanish and Italian governments to be brought down beside Greece which has no reached deal yet among its parties for taking another package of austerities measures which are required by its lenders and the IMF for having another 12 billions euros God willing by the end of June and without it, Greece will be exposed to default by the end of July.
God Willing, The single currency next resistance versus the greenback is now at 1.4457 and breaking it, can open the door for 1.45 psychological level then 1.459 as the lower high below 1.4939 while easing back can meet support at 1.4306 which is the reached low of this week and breaking it can lead to 1.4182, 1.4056.1.4011 then 1.3965 which has been reached last week amid the market increased worries about Greece debt developments.
About the author: Walid Salh El Din
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