The EUR continues to trade near lows as it test resistance as investors interpret the news coming from Europe. While Cyprus is front and center with all of its implications what has begun to spook the broad markets is that the Cyprus saga is possibly only the first part in what is about to become a long and sordid epic. Italian Sovereign Bonds are under more pressure and this is because investors are now taking a closer look at the Italian situation, that has not been able to put together a government and is moving closer to having new elections declared. Gold as of this morning is near 1605.00 USD as it looks for direction. Having tested lows the past couple of months the precious metal could build up momentum if safe haven speculation comes into vogue.
German Retail Sales figures will be released today and from the States will be Final GDP numbers. Europe’s economic data has been consistently disappointing, but not surprising. Europe remains within a deep recession and its recent actions in Cyprus has created even less confidence that the E.U. has the proper tools to handle its plight. While the EUR remains awkwardly strong in some respects, there is plenty of cynicism regarding its long-term health prospects.
Today will be the last full day of trading this week as many nations begin to observe Good Friday tomorrow, meaning that a long weekend is coming and investors will have to decide if they want to be holding onto positions without the ability to maneuver if news develops suddenly.
For all of the ECB’s actions the past summer in order to assure that stability was a priority, and talk about a unified banking system, the past week has proven that European politicians have other priorities. The E.U. continues to be vulnerable politically and the broad markets are beginning to reflect this. Asian bourses have taken on a dark tone the past couple of sessions. Wall Street while testing new highs has many questioning if its rally is sustainable. The psychology of the market appears fragile too many including Digital Markets Advisor.
Traders should be cautious and unless they are taking long-term positions which are well thought out, should give themselves plenty of avenues for traversing what will be short-term trends where opportunities and dangers abound.