Forex Market Analysis provided by eToro
Euro Hits 14 Month low
EU members have sealed the bailout deal for Greece on Sunday 2nd of May agreeing to an unprecedented €110 billion Euros of bailout however Greek protest and political instability threaten Greece’s ability to make budget cuts and raised investors fears of a default(Sovereign bankruptcy) to new levels. Moreover investors now fear that the Greek debt problem will spread across euro. In one of the most volatile session in latest years with fears over the stability flooding the market the Euro was hammered vigorously and was pushed to a 14 month low at 1.25.
EUR.USD Falls a staggering 840 pips in just 4 days
EUR.JPY Falls a record 800 pips in less than 3 hours!!!
Sterling hit by hung Parliament
As market fears over sovereign debt hit new highs Brittan’s election which took place yesterday pointed on a hung parliament and raise big question and the UK ability to tackle its own budget deficit. Sterling was pushed sharply lower falling from around 1.511 to as low as 1.4708 in one day.
GBP.USD Falls 300 pips in less than one day
The Nonfarm Pay rolls and the Trading Error
An unclear trading error triggered heavy selling in US Equities and caused US indices to fall sharply with the Dow falling -3.2% the S&P 500 -3.24% all in less than 20 minutes between 2:40-3:00 PM New York. This unexpected event amid woes in Greece only added more nervousness to the volatile Forex market causing short traders to crowd even more bets against the Euro and the Cable. The Indices recovered rather quickly but market nervousness remained high.
Nonfarm Payrolls- Market which is currently rather sensitive to negative news will watch closely the Nonfarm figures coming from the US with consensus bets on a 200k gain in jobs. If the NFP will disappoint this could lead FX traders to bet the relative advantage of the US is smaller and push the Dollar for a slight correction. If the figure will be around consensus or better than expected the Greenback might move into further gains. However since the debt woes in Europe weigh on risk appetite and can create unexpected reactions .For example a disappointing figure can also trigger some risk aversion and give the Dollar some support in case investors continue to move into safe haven. Therefore it is advisable to trade on low leverages and see how the market reacts to the news before determining a trend.
Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.
