Forex Fundamental Analysis
The Euro has been the center of focus for most currency traders over the last few months. We have seen the currency fall over time, but it has been amazingly resilient in general as the markets will step in and buy as various bits of good news comes out, or just simple suggestions of the possibility of decent reforms in Europe.
Q1 2012 is going to see some interesting market fluctuations - see how one professional trader expects things to go for EUR/USD, AUD/USD and more major pairs.
On Friday, David Cameron confused himself with Winston Churchill and now Britain again stands alone against “fortress Europe”. Whilst Churchill’s leadership of wartime Britain in standing alone in resistance to Nazi-ruled Europe was truly heroic and inspiring, Cameron’s position seems more in keeping with King Canute than his Conservative predecessor.
Last week proved to be yet another difficult period for traders as we saw continued high volatility in the markets, often going directly against the fundamental analysis; making trading from trends a difficult task. Get the full recap here.
The putative accord between 26 EU states for tighter fiscal control and financial harmonisation came at the end of the trading week and has not yet been fully absorbed by the markets.
The EU leaders’ summit is still continuing, but the slim chance that all 27 EU nations would agree to Franco-German proposals aimed at fostering tighter fiscal union has gone. What now?
The Summit meeting of EU leaders which is underway in Brussels today has been billed as “make or break” for the Euro in many quarters of the press. It is clearly a critical meeting and if common ground can be found and a credible plan agreed, it could go a long way to moving us out of the dark forest of financial uncertainty that we find ourselves in.
It has often been said that, in economic terms, when America sneezes, Europe catches a cold. However, in an ever more interconnected world, a crisis in any major trading block will have repercussions throughout the trading world.
Traders need to recognize when the markets are waiting for something, and this is one of those times.
Australia was the only major economy not to fall into recession during the worst of the global financial crisis. It was also one of the first economies to restore interest levels on central bank rates to anything approaching normality; all of the central banks dropped interest rates to historically low values in order to spur recovery during the crisis and a good many remain at, or near these levels now.
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