Euro recovers from 1.3723 low in the Asian Market - 18th October 2011

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by: fxsolutions
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Date: Tue, 1 Nov 2011 Time: 10:48 PM
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Chris Advincula, Market Analyst at FX Solutions (http://www.fxsolutions.com/), provides forex traders with an overview of currency market activity around the euro on 18th October:

"After the steep 193-pip drop yesterday from the intraday high of 1.3916 to 1.3723. the euro recovers with a marginal 60-pip rebound atrributed mostly to shortcovering and to the slight dollar weakness.

The euro weakens and erased all of the gains made yesterday stemming from the decline of the equity markets (almost 2 percent across Europe to Asia) as the G20 post meeting optimism fades and reality sets in as people realize that the EU leaders cannot truly provide a quick resolve to the European debt crisis.

In the works for the Oct 23 summit is a 4-point plan, 1) bolstering of the EFSF firepower, 2) fresh capital for banks, 3) new push to boost competiveness and 4) consideration of EU treaty changes to tighten economic management.

Angela Merkel poured cold water to the scene that sent the market spiraling down, "Dreams" that are taking hold again now that with this package everything will be solved and everything will be over on Monday-->will not be fullfilled." as per Merkel's spokesman Seibert to the German press.

Asian stocks continued to slide. Nikkei fell 1.5%, Australia S&P ASX lost 1.7% in the morning session.

Commodites fell. Copper slipped 1.9% to $3.3430 in New York. Lead, Brent Crude, Coffe and gasoline dropped at least 2 percent in 18 of 24 leading commodities tracked by S&P Goldman Sachs Commodity Index.

Moody's issued a warning to France that is could face the loss of its coveted AAA status.

Nikkei is -130.92 points to 8,748.68 (-1.47%)

Hang Seng is -630.68 points to 18,243.30 (-3.34%)

S&P ASX is -77.70 points to 4,197.70 (-1.82%)

The 30-day simple moving average bottoms out at 1.3735 and rose to 1.3775."

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