EUR/USD Fundamental Analysis Jan. 19, 2012, Forecast
Economic Events: (GMT)
09:00 EUR ECB Monthly Report
The European Central Bank’s (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.
13:30 USD Initial Jobless Claims 385.00K 399.00K
13:30 USD Continuing Jobless Claims 3590.00K 3628.00K
Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.
Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.
A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD. If the report comes in under the 385K we can expect to see the USD fall against the Swissier, but if the report is at the 399K level or above expect to see the USD rally and trend upwards on solid economic news.
Analysis and Recommendations:
Support Levels at S1: 1.2979 1.2857 1.2824
Resistance Levels 1.2723 1.27 1.2627
Fact or fiction, dreams or reality, rumors or news, which ever this is, it is the driving forces in the currency markets this afternoon. The International Monetary Fund (IMF) is planning to expand its lending capacity to $1 trillion from the current $385 billion to protect the global economy from the negative consequences of the European debt crisis, according to an official at a Group of 20 nations.
The expansion discussions will probably take place at the coming G-20 Finance Chiefs meeting in Mexico on Feb 25-26, where contributions from (BRIC) China, Brazil, Russia, India, Japan and oil-exporting nations are the main base for the expansion. The question is will they be able to find contributions to do so, and how would these contributions be limited to the EU. The IMF charter
requires assistance to all countries. How would the US veto power work in this instance? Today’s report contains no facts just a fact that a discussion will be held.
The euro responded to this news, moving up in afternoon trading the EUR/USD rose to $1.2845 from $1.2728, the duet subsequently consolidated at 1.2839, jumping 0.81%.
The big story unfolding is in Greece where Prime Minister Lucas Papademos said he would consider raising legislation to force a private-sector haircut on the debt if a deal can’t be reached voluntarily. Greek talks remained stalled as it is becoming more and more obvious that Greece will sooner or later default regardless of the negotiations and this temporary solution.
The european currency was propped up when Reuters reported that an analyst at Fitch said the agency did not expect Italy to default.
The EUR/USD is currently trading at 1.2832.
Originally posted here
