3/11/2010 4:30 am: EUR/$..1.3651 $/JPY..90.46 GBP/$..1.5003 $/CHF..1.0696 AUD/$..0.9164 $/CAD..1.0260
China Recovery Heats Up by
Michael BoutrosAsian markets were mixed today as more data out of China suggests the economy may be 'overheating,' fueling concerns that the government may begin scaling back stimulus measures. With better than expected reports on GDP, CGPI, and inflation, investors fear increasing pressures for the government to slow growth by possibly raising reserve requirements for the third time this year, or even raising rates. Concerns about possible monetary tightening spurred risk aversion trades, putting a halt to the euro's 100 pip rally yesterday.
Euro Drifts
The euro was slightly softer after testing the 1.3660 resistance level early in New York trading yesterday. The single currency has been in consolidation for the past 2 weeks as easing worries about the sovereign debt crisis provided some support. Although a successful bond auction last week improved economic sentiment , public and private unions are planning a nationwide strike today to protest the government's recent austerity measures. The protests are expected to disrupt travel and close schools and other public services. The euro has dropped more than 4.5% year to date on concerns that national deficits may derail recovery from the region's worst recession on record. Resistance holds at 1.3660 with key resistance resting at 1.3750. Here the 61.8% Fibonacci extension taken from the Dec 18th and Nov 25th highs, converges with the upper bound of the downward channel dating back to Dec 3rd. A break above 1.3830, signals a possible trend reversal with targets at 1.4015 and 1.4170. Support sits at 1.3540 followed by the 1.35 handle. A move below 1.3450 could open the door to considerable looses for the single currency, with demand seen at 1.3330.
This article contains the following sections:
Euro Drifts
Aussie Hits Key Resistance
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