EUR/USD Fundamental Analysis March 26, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

The EUR/USD climbed today ending the week at 1.3264 after dropping under the 1.32 mark, it was able to must enough strength to hold move back up on the USD weakened on a disappointing new homes sales release, the report showed that there was drop in new home purchases but an increase in price. The markets were hoping for a better then forecast results, to show that the US economy was improving.

Economists may have set the bar too high, as the jobs market needs to continue improving before it will flow to the housing market and consumer confidence needs to increase. Although they are on course, neither has been better long enough to actually affect the housing markets.

Also weighing on the dollar the improving economic outlook in 2012 may no longer warrant ultra-easy monetary conditions, according to a top Federal Reserve official on Friday, who said the central bank should step back from doing much more in terms of monetary stimulus. His comments sent the USD falling.

In Europe today, it there were several minor economic reports released and a lot of public speaking to end the week.

Greece has a chance to escape its current “downward spiral” if it implements the “important reforms” that its Parliament has approved, Mario Draghi, the president of the European Central Bank, told German newspaper Bild-Zeitung in an interview published Friday.

Greece is likely to push back a deadline allowing private-sector investors holding some EUR9 billion of foreign-law Greek bonds to participate in a debt swap deal due to low interest in the second leg of the restructuring process, two officials said Friday.

With 449 votes in favor, the Italian government won Thursday a confidence vote in the country’s lower house, which gave its final approval to the liberalization bill-a package of reforms aimed at boosting growth and competition.

Italian government bond yields jump temporarily as Prime Minister Mario Monti looks to press ahead with controversial labor-market reforms.

Business confidence jumps in France — Statistics bureau, government raise growth forecasts — Unclear who will benefit in election race PARIS — France’s economy is showing signs of recovering from the turbulence of the euro-zone debt crisis, with business confidence

Europe’s finance sector is in a structural crisis as institutes that took state aid face huge uncertainty which is affecting the rest of the sector, says Deutsche Bank AG’s (DB) new board member Stephan Leithner

German labor leaders Friday called on General Motors Co. (GM) to meet and discuss its Opel and Vauxhall operations immediately, following news reports GM is preparing to shut one or two plants in Europe.

Economic Reports March 23, 2012 actual v. forecast

Mar. 23	GBP	Nationwide Consumer Confidence	44	49	47
EUR	French Business Survey	96	93	93
EUR	Spanish PPI (YoY)	3.4%	3.6%	3.7%
TWD	Taiwanese Industrial Production (YoY)	8.4%	10.1%	-16.8%
EUR	Italian Retail Sales (MoM)	0.7%	0.2%	-0.8%
GBP	BBA Mortgage Approvals	33.1K	39.1K	38.0K
CAD	Core CPI (MoM)	0.4%	0.3%	0.2%
CAD	CPI (MoM)	0.4%	0.5%	0.4%
BRL	Brazilian Retail Sales (YoY)	7.3%	6.8%	6.7%

Economic Events Scheduled for March 26, 2012

07:00 EUR GfK German Consumer Climate

The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions.

09:00 EUR German Ifo Business Climate Index

The German Ifo Business Climate Index rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers. The index is compiled by the Ifo Institute for Economic Research.

15:00 USD Pending Home Sales (MoM)

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.

Government Bond Auctions (this week)

Mar 26 09:10 Norway Nok 3.0bn NST 474 3.75% May 2021 Bond

Mar 26 10:30 Germany Eur 3.0bn new Mar 2013 Bubill

Mar 26 15:30 Italy Details BTP/CCTeu auction on Mar 29

Mar 27 09:10 Italy CTZ/BTPei auction

Mar 27 08:30 Spain 3 & 6M T-bill auction

Mar 27 17:00 US Auctions 2Y Notes

Mar 28 09:10 Italy BOT auction

Mar 28 17:00 US Auctions 3Y Notes

Mar 29 09:10 Italy BTP/CCTeu auction

Mar 29 17:00 US Auctions 7Y Notes

Originally posted here