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Euro falls following Trichet's comments.

Fri, Mar 6 2009, 04:59 GMT
by James Whyte

ForexAmericas


March 5 - In today’s trading the U.S. markets gave back all of Wednesday‘s gains and then some.  Equities slid lower on speculation China will not have a stimulus package to boost the economy.  The financials took a hit today on the back of this sell off.  Citigroup traded below $1 in today’s trading, Bank of America down 12% and the Auto makers are still on the verge of bankruptcy.  On the positive side the U.S. Dollar continues to climb higher as foreign investors keep buying U.S. bonds.  All eyes are on tomorrow’s data, tomorrow at 8:30am New York time, the U.S. Bureau of Labor Statistics will release the U.S. most important data-Non-Farm Payrolls.  The market is expecting -657k lost jobs; however, ADP did report a lower than expected number on Wednesday.

EUR/USD- Today the Euro felt the downside pressure on speculation the European Central Bank President Jean-Claude Trichet, will continue to reduce the benchmark interest rate in the coming months in effort to battle a deepening recession in the Euro Zone. The European Union's 16th nation economy is contracting faster then the Central Bank expected. Today the Eur/Usd traded as low as 1.2481 after these comments by Trichet. Currently resistance comes in at 1.2620/30 from a downtrend resistance line and we see support at about 1.2440/50, with a target of 1.2400/1.2350 (November '08 levels).

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