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Fundamental Headlines
? Tensions Rise Ahead of Portugal Auction ? Wall Street Journal
? Futures Rise as Debt Worries Ease ? Wall Street Journal
? Euro Stable as Japan Promises Support ? Financial Times
? Portugese Bond Sale May Make Bailout ?Inevitable? ? Bloomberg
? Japan Joins China Assisting Europe in Debt Crisis ? Bloomberg
EURUSD: The euro extended its gains against the U.S. dollar during the overnight trade as Japan joined China in assisting the 17 member euro area battle its debt concerns that continue to rattle the markets. The news comes a day before Portugal is expected to announce a 10 year bond sale, which will mark the first auction of any euro member this year. The sale is of particular concern due to the fact that market participants believe that Portugal is the next troubled economy to tap into the EU-IMF line, following both Greece and Ireland. At the same time, Spain is expected to follow suit subsequent to Portugal. As ongoing concerns surrounding Spain and Portugal?s troubles to raise funds weigh on the euro, I do not rule out a possible test of 1.290. Going forward, traders should caution entering into a short euro trade ahead of the release due to the fact that there is a possibility that the sale could elevate some short term fears. However, the bounce may be short-lived as governments in the bloc implement tough austerity measures in order to battle their boiling debts. Thus, euro bears should look to sell rallies. Conversely, short positions from the 1.34 area may want to remain short as the overall trend remains to the downside.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical?s, Weekly Spotlight, and Forex Trading Weekly Forecast
DailyFX provides forex news on the economic reports and political events that influence the currency market.
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