The euro has everything to please but fails to break resistance techniques

Brussels - July 1, 2008 - While awaiting the decision next Thursday on interest rates from the European Central Bank (ECB), investors still penalizing little convincing comunicado of the U.S. Federal Reserve last week. The inflation data for June in the euro zone has also been a good reason to encourage the trading of the euro. Almunia admitted that the euro exchange rate is "overvalued".

The euro, which traded at the moment around the 1.5766 dollars, has moved today from a high of 1.5838 and a minimum of 1.5739. The euro needs to break certain resistance to try to beat their record high of 1.6019. The first is at the level of 1.584 dollars, then in 1.596.

The euro has now found a good ally to continue to rise against the Green ticket in the preliminary CPI in the Eurozone. The data showed an increase of 4% in European prices surpassing the 3.9% expected by analysts and 3.7%.

"The latest data from European prices are so widespread beating expectations and the market is starting to decant a greater likelihood of increases in short rates in Europe than in the United States. Proof of this is how close we are of historic highs crossing ", highlighting analysts X-Trade Brokers. "Just this morning we set up at 1.5835 and much of the blame for this situation is also the price of a barrel of crude seems dsbocado again, after a phase of consolidation," added.

"Mindful of a possible cut in the crossing euro / dollar, as RSI or stochastic indicators are in overbought zone and would not be strange for a small vent in price. Besides cuts recovery of the dollar seems that is going to have to expect ", envisages Alexander Hick X-Trade.

The meeting has not attracted any major surprises, although the index managers buy Chicago-cited as the most significant day in U.S.-has improved forecasts of analysts, but has remained below the 50 points that show contraction in activity.

Jose Luis Martinez, an analyst at Citi hoped that the economic data continue to recognize the growing weakness of the European economy. "In this sense, I do not expect a rise of the dollar in the short term, but I see it likely that the euro will stabilise in the short term at levels not far from the current ones. Of course, after trying their utmost," he says.

Source: El Economista