By TraderVox.com
Tradervox.com (Dublin) – The recent developments in Greece crisis fighting measures have yielded positive results for the euro. With most investors anticipating a favorable outcome in the November 26 euro zone Finance Ministers meetings, the single currency has continued to strengthen against major currencies after dropping to critical supports earlier. According to Credit Suisse Group AG, the euro may continue to strengthen against the yen.
The single currency is poised to strengthen to 107.74 against the yen, which is the 78.6 retracement of its decline from March through to July. Such sentiments are also held by analysts David Sneddon, who heads the technical analysis research at CSG in London. However, the euro may first weaken to 104.62 yen per euro, before hitting the 107.74.
According to David Sneddon note to clients, the acceleration through to 104.83 yen will pave the way for further strengthening through to 107.74 yen. He also added that pivotal support lies at the 104.62 which has been a high previously. The market is expects a brief correction to this level before advancing to new high of 107.74. With this analysis and the projected Greece aid, the euro will strengthen against the safe haven currencies as risk appetite grips the market. The commodity related currencies are expected to strengthen as stocks rallies.
The 17-nation currency has strengthened by 0.6 percent against the dollar to trade at 106.50 at mid-day trading in London yesterday. It had earlier increased to a high of 106.58, the strongest it has been since April 30. The currency last hit 107.74 yen on April 23. The technical analysis of the Fibonacci is based on the theory that prices increase or decline after reaching a certain high or low.
The euro has increased against the yen despite reports showing that the euro region has entered into another recession. Manufacturing data from the region showed that the contraction in the sector was more than the market was expecting.
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