Despite all the excitement
last week after the European Central Bank (ECB) declarations that were
interpreted as being the forerunner of strong easing measures in the Euro zone,
which if implemented would tend to weaken the Single Currency, the EURUSD pair
is still in an uptrend. Price is also still above the 200 Day Simple Moving
Average (SMA), although 1.40 seems to have been established as being the upside
resistance, at least for the time being.
The markets often come to
rest at round numbers. There is no significance in a round number in
mathematical terms, of course, but human psychology does create the illusion
that there is.
Meantime, the USDJPY pair has
actually touched its 200 Day SMA, and apparently been bounced off it. A little
bit more price movement will be needed to confirm if this is the case.
From the Fundamental Analysis
point of view, it has been announced that the annual Japanese trade surplus has
come in at its lowest reading since records began. This is both surprising and
disappointing for a country that traditionally exports so much of its
manufacturing output. There is even talk now of a slide towards a trade
deficit, driven mainly by the need to purchase more fossil fuel from abroad as
a consequence of the Fukashima nuclear disaster. On the other hand the balance of trade could have been affected by brought-forward consumer spending in advance of a new sales tax in Japan.
All of this might be of major importance for the value of the Japanese currency in the immediate future. This will particularly be the case if the energy situation in that country has brought about a structural change to the economy.
All of this might be of major importance for the value of the Japanese currency in the immediate future. This will particularly be the case if the energy situation in that country has brought about a structural change to the economy.
No comments:
Post a Comment