Euro Zone Looking For A Life-Line To Sustain Gains

Yesterday, the Euro begin to slowly unravel last week’s gains against the USD as it reacted to Mario Draghi’s comments on where he saw the markets moving.

We see “Super Mario” to the Euro Zone what Greenspan used to be to the USA stock market. Traders would study Greenspan’s body language and facial expressions and the markets would gyrate up and down like a YoYo as he spoke. Mr. Draghi now has that ability and we see the market zigzags whenever he delivers a speech.

Without much to support last week’s rally, the struggling Euro Zone, in tandem with other world markets, looks for a life-line or at least some kind of offering. With European banking sector in turmoil we could see some sell off later in the week unless a miracle cure comes to their rescue.

The Euro Zone And The Emerging Pattern With The Greenback

It appears this is the pattern we can expect; as the Euro slowly weakens against the Greenback, we see miraculous strength from the Euro as it recovers, and then in a flash, the Euro Zone currency is again put back under pressure. We have seen this at least a half a dozen times in the last 8 months.

This will be a telling week and if there is no new found strength, I believe an attack on parity is a strong possibility. With no major upcoming Euro Zone announcements this week, it will be a test of the Bulls and the Bears. By weekend we will know if the selloff will intensify or if last week’s rally still has some breath left in its lungs. We will just have to “wait and see.”

Let’s Not Forget China and Oil

Of course China resumes business as usual after a long holiday week, and its start to the week was nothing but painful as Chinese stocks lost their footing. Similarly, oil fell on Monday and will also be watched closely as the week progresses. Up until now, we have seen selling off and then recovering and vice versa.

As I said earlier it’s a “wait and see” week. The pundits are stumped right now and as far as I’m concerned it’s become a guessing game with no clear direction emerging.

Forex Trading This Week

Nonetheless, at ForexSignal.com we will be intensely watching the Forex market and as our criteria confirms, we will send out Forex Signals to our subscribers around the world. As the market changes, our Forex Trading Team is willing to adapt to new market conditions. This is in conjunction with one of our Forex Golden Rules.

Golden Rule #4 -DO BE FLEXIBLE: There is no single surefire method to trading because there are so many types of market conditions. The Forex markets trend,reverse, break-out and consolidate. For each market condition, there are various rules and trading criteria. No single strategy to date that we know of has held up under all trading conditions.

Trend Meters

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