Concerns about Ireland once again reverberated and knocked EUR index off. Sharp downward movement on the main pair was for the most part driven by an information issued by Moody’s, stating that Irish rating is, in all likelihood, about to be dropped. Keeping in mind how Moody’s deepened Greece crises by changing Greek rating, we ought to pay extra attention to rating agencies releases in near future.
Today we also experienced two highly important data releases that came from States. Namely, annualized Gross Domestic Product in the third quarter and also annualized Existing Home Sales. Issued GDP turned out to be the highest for the prior three months. 2.5% in comparison with 2.3% expected and 2.0% previous. It is important to notice that explicit contrast between released GDP and both forecasted and previous, shows an important improvement of pace of U.S. economy recovery. Change was mostly driven by growths in consumer spending, government expenditure and export. On the other hand Existing Home Sales (Home Resales) release was worse than previous value and near to expected values set by surveys. Ongoing decline in existing home market lasts since November, 2009.
All mentioned factors contributed in final end of upward correction and led to breaking the level of 1.3429 which is a highly significant resistance/support level, the 50% Fibonacci retracement of long-term trend. Further significant resistance is a level of 1.3338 – the high from August, 2010.
To sum up, I will just notify that both, all of macroeconomic and technical indications are currently in line with further EURUSD downward trend, hence I am certainly biased towards bears’ scenario on EURUSD chart.
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