Forex Bull

Euro-Zone retail sales are expected to have fallen 0.4% in October which would be the second consecutive month that consumption contracted.

The Euro tested higher in overnight trading as stock markets around Asia followed gains on Wall Street. Technical positioning suggests risk appetite could continue to rebound in the coming days, boosting the single currency and putting pressure on the US Dollar.

Wed, 03th of December, 2008 By Setyo Wibowo (analyst@fxinstructor.com) EURUSD Outlook The EURUSD was corrected higher yesterday.

Not a lot to say tonight because I just don’t have a good feel either way after going through my scans. As I looked at the indices, I think they are kind of in no-man’s land here and I am not sure which way we go

Australia?s Gross Domestic Product disappointed expectations, adding 0.1% in the three months through September versus forecasts calling for a 0.2% increase. The annualized result registered as predicted at 1.9%, down from 2.7% in the year through the second quarter.

There has been 3 recessions in the past 30 years. In each of those recessions, the dollar weakened in the first six months of the recession, then gained strength in the next six. Twelve months into the current recession, we see this pattern in the dollar repeated once again.

The Japanese Yen has gained 27.3% against the Euro to date this year as risk aversion saw capital flee from carry trades. This has forged a powerful relationship between EURJPY and the MSCI Index of world stock performance, with the correlation currently standing at a hefty 95%.

Treasury Secretary Henry Paulson, preparing for his final round of economic talks with China, said Tuesday that Beijing must keep letting its currency rise in value against the dollar to help ease trade tensions with the United States.

The Australian dollar and New Zealand dollar both managed to edge higher on Tuesday despite the Reserve Bank of Australia?s 100bp rate cut on Monday evening to 4.25 percent.

The British pound initially eased back on the release of UK construction activity figures, but subsequently bounced back amidst broad US dollar weakness.