Rising from the Ashes: EUR Bull Run
Justin Burkhardt | FXFocus.com [9]
EU confidence sparks a Euro bull run. Both the EU’s strongest and weakest economies are positively shifting. The S&P has lifted Greece’s credit rating by 5 notches to a “B minus”, and Germany’s IFO survey came in strong for the second month running indicating that business sentiment is on the rise.
Talks of a Greek exit, which were so prominent in the past, will become less likely now that Greece appears to be moving in the right direction. This upgrade moved Greece from the purgatory of “selective default” to “junk territory”. Do I still think it’s prudent for Greece to get out the currency block, sure I do… but will it happen? No.
The economic situation in Greece is far from healed, and the fractures in the Euro-Zone still run deep. But this improvement has done well to spark the risk appetite for investors. Europe’s problem can now be viewed by outside investors as just that rather than a “global economic killer”.
On the other end of the spectrum in the United States, talks of resolving the Fiscal Cliff are ongoing and competing proposals lack any real traction… The first quarter of 2013 is sure to be interesting.
FOREX Insights
The announcements out of Germany and Greece combined were the catalyst for the recent bullish run in the EUR.USD. The run was met with resistance at $1.3306 this morning right around the opening of the U.S. session. I identified this point of resistance as a false breakout on the 4 hour trend and called a short to my faithful followers on twitter (@FXFocusGlobal [11]), the alert was worth more than 60 pips and is continuing to decline as I write this.
Indicators on Watch
EUR German Producer Prices – (Thursday)
USD Gross Domestic Product – (Thursday)
USD Initial Jobless Claims – (Thursday)
USD U. of Michigan Confidence – (Friday)
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Your currency analyst,
Justin Burkhardt
