Euro firm at resistance of 1.4410 - Forex Trading Update, 1st August

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by: fxsolutions
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Date: Mon, 15 Aug 2011 Time: 11:29 AM
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Chris Advincula is Market Analyst at FX Solutions (http://www.fxsolutions.com/). As an expert in forex, he frequently provides Forex traders with analyses of currency market activity and foreign exchange news. On 1st August, he takes an overview of movement around the Euro, Yen and Swiss Franc.

"The Euro is firm to stable in the upper region of 1.4410 and 1.4370 in a rather narrow trading range in the Asian and early European session. The support was also aided by the weakness of both the Japanese Yen and Swiss Franc after the U.S. reached an agreement to raise the debt ceiling late Sunday yesterday, just two crucial days before the Aug. 2 deadline averting a catastrophic domino effect to the global market should the U.S. default on their maturing debts.

President Barack Obama made the announcement last night that the U.S. congressional leaders agreed to raise the U.S. borrowing limit. The White House, and both the Republican and Democratic leaders said that a compromise had been reached that would cut about $2.4 trillion from the budget deficit in the next ten years.

The plans call for a two-step process for reducing the budget deficit. The first phase would cut about $900 billion in spending in the next decade and the next $1.5 trillion will be processed by a special congressional committee which Congress must act by December 23, 2011.

This was positive and welcome news to the Stock and Equity Markets. The S&P futures rose 1.4 percent, Most Asian Stocks rose by 1.7 percent, Gold fell by 1 percent. Dollar made modest gains.

Investors are still cautious however. The Congressional leaders will now have to gauge whether they have the votes to pass the deal tomorrow. (Sharp spending cuts and no new taxes). This may not necessarily satisfy Standard & Poor's to keep the same AAA rating as well and is not a guarantee. A U.S. downgrade still looms in the near-term outlook.

Nikkei: +183.63 points to 10,016.70 (+1.87%)
Hang Seng: +338.89 points to 22,779.10 (+1.51%)
S&P ASX: +78 points to 4,502.60 (+1.76%)
Shanghai: +3.97 points to 2,705.70 (+0.15%)

The 30-day exponential moving average rose from 1.4365 to 1.4390."

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About the Author

About FX Solutions

FX Solutions is a leading online foreign exchange broker with a focus on advanced trading technologies, transparency of transaction and unparalleled customer service. FX Solutions serves retail clients, white label partners, institutional trading partners and introducing brokers in over 140 countries.

FX Solutions' products are regulated in the United States, United Kingdom and Australia. FX Solutions in the United States is regulated as a member of National Futures Association, and registered with the Commodity Futures Trading Commission as a Futures Commission Merchant. In the United Kingdom, FX Solutions is a registered trading name of City Index Limited which is authorized and regulated by the Financial Services Authority. FX Solutions in Australia is a registered trading name of City Index Australia Pty Ltd. which is authorized and regulated by the Australian Securities and Investments Commission.

For more information on the FX trading platforms available at FX Solutions, please visit www.fxsolutions.com www.fxsol.co.uk and www.fxsolutions.com.au