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| Inflation falls in Eurozone.
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When European Central Bank was first created, its first stated mission was to combat inflation. After over a decade in operation, ECB seems to be doing the right thing because latest reported inflation for Eurozone dropped dramatically. In fact Eurozone inflation has fallen to zero, the lowest since comparable records began in 1991. Some economists predict the rate could turn negative in June, given that Germany and Spain are there already.
Ironically, negative inflation is viewed as unhealthy. In Eurozone it raises fears of full-blown deflation ? persistent fall in prices that cause significant economic damage. With inventories high and not moving, risk of farther factories shut down would be rampant. Yet another item to worry for ECB.
Eurozone inflation falling or not, EUR has been strong all week. It had huge gains relative to both USD and JPY, as if bad news for Europe were good for the currency. Our services had a weak month of May, with both of them showing negative results, for the first time this year. These periods usually don't last long, based on long term performance of services.
(Sunday 05.31.2009)
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Here are the results for last week:
- Daily Pound lost 81 pips ;
- Daily Euro made 31 pips;
Follow the link on the right to view details.
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Last week's results.
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Our trade from last week worked out as planned. Idea was to buy USD-JPY at 95.34, in an anticipation of an up move. After a little sideways trailing, move came. Our target of 96.00 was reached for a good gain of 116 pips.
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For about two weeks some strong trends were present. USD came under severe pressure from every where, including the Euro. EUR was very strong elsewhere, too. Another currency that weaken considerably was Japanese Yen, which lost hundreds of pips in relation to others just last week.
While longer trends are expected to remain, we think that a short term correction is very probable soon. Given the size of preceding moves, even small correction now could produce decent results.
We are looking at EUR-JPY. If the price moves to 134.17, we want to sell it with an objective of 133.00. Should this order be initiated, we think it will reach to the target fast.
We wish everybody great trading week!
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Once again we must stress that the trades highlighted here are only a small sample of our trades. If you have any comments or would like to obtain more information please contact us at info@spectrumforex.com .
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Risk disclaimer:
Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.
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