EURUSD At Crossroads of The 61.8% Fibonacci Retracement; Fitch Cuts Ireland's Credit Rating

Fundamental Headlines

• Dollar Falls on Fed Speculation – Wall Street Journal

•Asian Stocks Climb as Gold Hits Record – Wall Street Journal

• IMF Chief Warns on Exchange Rate Wars - Financial Times

•Goldman Sachs Says U.S. Economy May Be “Fairly Bad” - Bloomberg

• Global Central Bank Action May Follow BoJ Moves On Rates– Bloomberg



EURUSD: Factory orders in Germany jumped 3.4 percent in August after falling some 1.6 percent the month prior, while the annualized figures soared 20.3 percent during the same period. Taking a look at the breakdown of the report, capital goods rose a massive 6.7 percent to mark the largest advance this year in the component, while consumer goods shed 3.9 percent to taper the advance. Despite today’s advance in factory orders, the euro was little changed against the U.S. dollar as focus turns to the ADP employment change for the month of September, which is being released ahead of the highly anticipated Nonfarm payrolls report.


At the same time, the EURUSD is at the crossroads of the 61.8 percent Fibonacci retracement on the December 3rd 2009 to June 7th 2010 downswing. Failure to break above this level will expose downside risks back towards 1.3512.


Meanwhile, the European Union during the overnight trade said that Greece’s 2006-2009 deficit will be revised to the upside, and went onto add that “areas of uncertainty” remain for Greece’s debt and deficit. This does not bode well for Greece as the country will implement tough austerity measures along with some of its neighbors, which will in turn weigh on growth. Thus, the EURUSD may return towards 1.300 during the first quarter of next year. Not to overlook, Fitch cut Irelands credit rating from AA- to A+.



Written by Michael Wright, Currency Analyst