When offering forecasts for 2011, I feel like I can just take the stock phrase “______ is due for a correction” and apply it to one of any number of currencies. But let’s face it: 2009 – 2010 were banner years for commodity currencies and emerging market currencies, as investors shook off the credit crisis and piled back into risky assets. As a result, a widespread correction might be just what the doctor ordered, starting with the Australian Dollar.
By any measure, the Aussie was a standout in the forex markets in 2010. After getting off to a slow start, it rose a whopping 25% against the US Dollar, and breached parity (1:1) for the first time since it was launched in 1983. Just like with every currency, there is a narrative that can be used to explain the Aussie’s rise. High interest rates. Strong economic growth. In the en
EUR/USD 1.2835 – 17 August 2010
EUR/USD Open 1.2812 High 1.2865 Low 1.2735 Close 1.2825On Monday the Euro/Dollar started to rise. The European currency appreciated from 1.2735 to 1.2865 yesterday, matching the positive Interbank sentiment projection, at nearly +2%, closing the day at 1.2825. This morning the bulls are trying to push further up. On the 1 hour chart new downward channel was broken upwards, while on the 3 hour chart the downward channel is on hold. Break above the nearest resistance and yesterday’s top at 1.2865 may trigger further recovery of the Euro. Going bellow yesterday’s bottom and first support at 1.2735, however, would confirm continuation of the bearish trend, towards next objective downwards 1.2640. Today’s focus is on EU 16 Current account and Germany ZEW economic expectations index at 8 and 9 GMT respectively. Read more…