Monday, November 15, 2010
We are seeing increased volatility in currency markets due to growing worries in Eurozone and unsettling harmony between G-20 nations. Last week G-20 summit failed to reach agreement on currencies, at the same time China, Japan and Germany criticised US of devaluing its currency by printing more money.
Earlier this month Fed decided to print $600Bn over next several months in anticipation that it will likely to aid US economy. Most analyst are worried that these dollars will trickle through to emerging economies and cause asset bubbles, appreciate their currencies and increase inflation.
EURUSD this week is going to be affected by decision from Ireland if they are going to need help from EU to deal with debt issue. Other EU countries are insisting on Ireland to accept bailout to increase confidence.
Looking at weekly charts EURUSD dropped sharply from Weekly upper trendline last week and looking to head lower. If Ireland refuses to accept help then EURUSD could fall below 1.3500 and find support at 1.3300