Forex technikal and fundamental analysis: Forex Crunch Rumor: Spain will ask for 280 billion euros of aid money

May 4, 2010

Forex Crunch Rumor: Spain will ask for 280 billion euros of aid money – Euro plunges

Rumor: Spain will ask for 280 billion euros of aid money – Euro plunges
EUR/USD Breakout Alert – Candle Breakout Technique
Forex Daily Outlook – May 4 2010

Rumor: Spain will ask for 280 billion euros of aid money – Euro plunges

Posted: 04 May 2010 03:51 AM PDT

A rumor that Spain will ask for 280 billion euros of aid money in order to deal with its debt is running in the past few hours in trade rooms. This is what’s bringing down the Euro.

EUR/USD now trades at 1.3120, very close to the 2010 low and approaching the 1.3080 support line. This line is the place where EUR/USD began the long term rally in 2009, and it’s about to return to this point:

According to Israel’s Globes (Hebrew link), Germany will not be able to back Spain on such a big request, more than two and half times the size of the Greek plan. So, the Euro’s fate is to fall. Due to the Greek debt issues and riots, the Spanish debt problems have escaped the eyes of many analysts, despite its 20% unemployment rate.. Contrary to Greece, Spain is already at the heart of Europe and its huge debt is a danger to the whole Euro zone. Germany was reluctant to help Greece, and cannot aid Spain.

A break below 1.3080 will send the pair towards 1.2886, which is the next line of support. A bounce from current levels will send it towards 1.3267, which is the immediate resistance line.

Stock markets are turning red The Spanish stock market is down 3%, and Wall Street futures are turning negative.

In a post earlier today, Jason Madison gave an alert on an expected EUR/USD breakout.

Update 12:30 GMT: Moody’s and Fitch have issued statements that they will not cut Spain’s credit rating, thus not following S&P. In the meantime, EUR/USD dropped to 1.3085 and is struggling at this point.

– More updates to come –

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EUR/USD Breakout Alert – Candle Breakout Technique

Posted: 03 May 2010 03:08 PM PDT

Guest post by Jason Madison, independent trader and founder of BeatWallStreetNow.com

Hello Everyone,

By now you all should be familiar with the inside candle breakout technique I showed you in my previous posts, and hopefully you have been making some pips with it.

Today I am going to alert you to breakout that is going to happen in the Eur/Usd before it does so that you can be in position to profit from this move.

Look at this daily chart of the Eur/Usd:

(Click to enlarge)

The price action of the Eur/Usd has been contained completely within in the daily candle from 4/27/2010 for the last 4 days.

This is a classic inside candle pattern and when a candle is able to close outside of this zone then price should continue to move in that direction. Just look at the two previous inside candle breakouts I have marked on this chart and how price moved down hard after the breakout.

In terms of the direction of the break and when its going to happen only time will tell, but given the size and direction of the last candle I going to say it will be to the downside. However, do not make a trade until a candle is able to close below the low or above the high of the containing candle, because until that happens there is no trade.

If you have never traded with this technique before then I suggest that you take this trade in a demo account because you should never try a new technique without demo trading with it first. Until next time.

Happy Trading,

Jason Madison

If you would like to learn about more patterns like these and how you can discover how you can learn the secrets to trading for a living then visit BeatWallStreetNow.com

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Forex Daily Outlook – May 4 2010

Posted: 03 May 2010 02:00 PM PDT

U.S. Pending home sales and factory orders reports are expected to drop while in Britain, optimistic winds before the upcoming political elections.
Let’s see what awaits us today.

In the US, Pending Home Sales excluding new construction is expected to go down from 8.2% to 3.3%, a temporary setback from the nice rise from last month.

Later in the US, a decline in the value of new purchase orders placed with manufacturers from 0.6% to 0.1%.

Finally in the US, Treasury Secretary Timothy Geithner testifies on the President’s proposed fee on financial institutions before the Senate Financial Committee, in Washington DC; may affect monetary policy in the market and foreign governments;

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, German Retail Sales, released monthly, showing change in the total value of inflation-adjusted sales is expected to decline from 1.1% to 0.0% most likely affected by the Euro crisis.

Also in Europe, Producer Price Index showing the change in the price of finished goods and services sold by producers is expected to rise from 0.1% to 0.9%

For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis.

In Britain, Tension is rising towards the elections on Thursday; Manufacturing Purchasing Managers’ Index is foreseen arise from 57.2 to 57.5 points which is a fairly good score.

Also in Great Britain, Halifax Bank of Scotland (HBOS) House price index, indicating the change in the price of homes financed by HBOS, is expected to go down from 1.1% to 0.6%, a bit of slowing down in the housing industry and a drop in the total value of new credit issued to consumers this month from 2.1B to 2.0B, may correlate to Pre-election uncertainty.

However, Nationwide Consumer Confidence is up from 72 points to 80 points expressing optimism towards the nearing election which will have a major impact on the future course of fiscal and monetary policy.

Finally in Great Britain, Price of goods purchased at retail stores is expected to remain around 1.2% and the Number of new mortgages approved for home purchases is expected a drop from 52K to 50 K.

Read more about the Pound in the GBP/USD forecast.

In Australia, Reserve Bank of Australia’s term interest rates are expected to edge up from 4.25% to 4.50%. RBA also issues a Rate Statement concerning monetary policy and future tendencies.

More in Australia, AIG Services Index which is a business conditions indicator released monthly, is expected to remain around 48.4 points.

For more on the Aussie, read the AUD/USD forecast.

That’s it for today. Happy forex trading!

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