Forex:Market investors in Dilemma About Rescue Fund

Tuesday, May 18, 2010

Last week's announcement of the Stabilization Fund leads the investors into the trouble. ECB has taken pledge for purchasing public as well as private bonds and also introduces various refinancing operations for providing benefits to the countries belongs to euro zone.

Market experts are saying that the stabilization fund only provides a temporary relief to the economy of euro zone. The cure is not the permanent, this news leds the market investors into the dilemma. Since majority of the market aspirants does not believe these auctions are beneficial for solving the fiscal

The Germany is the major contributor in the stabilization fund but the EU members of the other nation that has given their support is not happy because they are worried about the austerity plans that the government had announced for improving the fiscal health of the countries.

The austerity plans mainly affects the economic recovery which leads to the fall of EURO currency below the 2008 low. The EURO currency falls to 18 months low,now it is at 1.2333 points. The fall of EURO makes the USD demand higher among the currency investors of Forex market.

The euro zone countries that are going through debt crisis after the announcement of stabilization fund had formally announces about the austerity plans to reduce the fiscal deficits. These countries are Spain, Portuguese and Italy, since Greece also belongs to this category but it's announcement is now in holding state.

However, after this announcement there is a slow down seen in the economic recovery in both the euro zone countries along with the whole world. Government has bought 20 billion EURO for providing short-dated bonds to euro zone countries are Greece, Spain and Portuguese.

Now the report on currency pairs how the rescue fund has affected the currency pair. The first shocking news is about the EURO as it falls to the 4 year low and reaches to 1.2334 point. Today's opening of Forex session is at 1,2433 resistance intact. It is predicted that the EUR/USD pair can be further goes to
decline because of the continuous fall of EURO currency. it can be said about the market of EUR/USD currency pair that the break of 1.2329 subsides confirms about the rebound of 2008 fall in currency pair.

The recovery is seen in the GBP/USD after the Yesterday's fall by touching the low of 1.4250 in the opening market. It is predicted about the GBP/USD currency pair that it can get benefited by the US dollars high. GBPUSD currently is in position of 1.44488 to 1.53010. It is noticed that the currency pair rose to 1.7043 from corrective rise to1.3503 and then falls from the 2007 high of

USD/JPY is currently on mildest downside and the further drop-down is expected from 90.85 to lower point. The upside in the currency pair is expected to be of 93.62 but it is limited to 94.97 high. It can be assumed to be one short-term drop-down in this currency pair. After breaking from 88.13 it is seen that there ts support given at this point can favor the rise of the USD/JPY currency pair. If the pair breaks down at 94.97 then it will confirm that the USD/JPY will be in bullish case.

USD/CHF is given minor support intact after the Friday sell-off. The currency pair USDCHF is at 1.1210 level and estimated to reach to the level of 1.1273 and the resistance line is at 1.1396 level. It is estimated that the support given at minor level can bring temporary top level along with consolidations. But if there is some pull off at the point above 1.0922 then there will be a risk resumption.

There is drop down is seen at the AUDCAD currency pair is shown at the level of 0.8723. The overall fall will confirm that the currency will get medium-term support at point 0.8557.

These all are the market updates of today's overall currency pair and affect of market stabilization fund on the currency pairs of the Forex market.

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