News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Traders Follow Merkel's Lead on Euro Doubts

Traders Follow Merkel's Lead on Euro Doubts

Benjamin Spier, Technical Strategist

The fear that was seen driving both the Euro and Sterling lower against the safe haven US Dollar in today’s European session, was fueled by comments made by German Chancellor Angela Merkel. Merkel said that the ‘European project’ is still in jeopardy and called on policy makers to work harder to help it succeed. Merkel then reiterated her opposition to burden sharing without increased joint oversight.

No sooner than Merkel’s comments were released, did German 2-year notes sell for a negative yield for the first time at a government auction, further showing an increased demand for safer bonds. The Euro also dropped against the US Dollar at the time of Merkel’s comments, falling from resistance at 1.2300 towards last week’s 2-year low at 1.2162.

EURUSD traders should also be aware of the 50% Fibonacci retracement level from the pair’s all time high to its all time low, at 1.2125, as noted by John Kicklighter is his daily wrap up.

Before dropping on Merkel’s comments, GBDUSD also sold off on news that the Bank of England is considering an interest rate cut, depending on the assessment of recent lending measures, according to the minutes from the BoE’s July meeting. At the same time, the 3-month unemployment rate dropped to 8.1% in May, which could reverse the pressure placed by the dovish minutes.

Later today, Bernanke will give his semiannual report to the U.S House at 14:00 GMT, and the Bank of Canada also releases its monetary policy report.

EURUSD 1-hour: July 18, 2012

Traders_Follow_Merkels_Lead_on_Euro_Doubts_body_eurusd_daily_chart.png, Traders Follow Merkel's Lead on Euro Doubts

--- Written by Benjamin Spier, DailyFX Research

“Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.”

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.