Investor demand for higher yielding currencies pressured theEuro on Monday along with renewed debt fears in Europe. Technically, the closing price reversal top indicates the start of a possible near-term direction.
Investor demand for higher yielding currencies pressured theEuro on Monday along with renewed debt fears in Europe.
The EUR USD traded higher initially after China announcedthe Yuan would be allowed to strengthen. This news helped to weaken the Dollaracross the board because of increased demand for higher risk assets. Shortlybefore the New York opening, the Euro began toweaken as demand for Australian, New Zealand and Canadian Dollarsdrew money out of the European markets and into the asset-linked currencies.The British Pound also fell on the news.
Later in the session, both the Euro and the British Poundaccelerated their down moves after it was reported that Fitch Ratings downgradedBNP Paribas SA b y a notch, citing “structural issues” linked to the Frenchbanking giant’s business mix.
Fitch also added “the bank no longer fits comfortablyalongside a peer group of more highly rated banks.”
Technically, the Euro made a daily closing price reversaltop which indicates renewed selling pressure. The current chart patternsuggests the start of a 2 to 3 day break with 1.2171 to 1.2102 the next likelydownside targets.