The risk appetite which has been negatively impacted by the slump of US consumer confidence of February to 46 from 55.9 as the market was waiting for 56 has been hurt again today with a surprising increasing of the US jobless claim this week to 496k from 473k a weak earlier while the market was waiting for improving to 455k this week which underpinned the Japanese yen and the greenback as the recent weak consuming figures can has negative impact on other sectors and especially the labor market which is very sensitive to the consuming confidence and already suffering form a sluggish demand. From other side, Ben Bernenke was doubtful about the labor market recovering timing in his semi annual testimony in front of the house as he has repeated his mantra that the inflation pressure is still will contained and the economy is still not strong enough and in need of the current extraordinary low stimulus interest rates for extended period of time.

The single currency couldn't break above 1.37 earlier this week because of the disappointing IFO germane business climate index which has fallen to 95.2 in February from 95.8 in January while the market was waiting for 96 but it is still finding support above 1.344 versus the greenback. The pair has made a new lower low at 1.3445 last Friday whereas the same bottom of last May. We have mentioned earlier that the pair can meet a support at this same area in our previous reports followed by a major support at 1.29 whereas the pair higher low of its rally reaching 1.513 in the beginning of last December while the next main resistance is still at 1.384 followed by 1.40 psychological level.

The Greek debt and the worries about the other European countries sovereigns debts are still putting pressure on the single currency. As it looks widely unsustainable to see the Greek deficit to growth ratio above 12% as the solution is not looking coming soon at the current struggling growth rates which resulted from the credit crisis as even the ECB could not stop any of its accommodative easing actions worrying about the current nascent recovery until now which can put more pressure on the reforming plans in Greece from another side and the forex market is still keeping the pressure on the single currency as it has been realized that there is no bailing out plans currently from the other EU members to help Greece to sustain its debt at the current low levels of growth in the Euro zone satisfied by just the political underpinning waiting for reforming signs from Greece in the coming 30 days.

God Willing, it is important today to wait for UK Q4 preliminary GDP reading which is waited to improve to .2% q/q from .1% q/q in the first reading after a massive declining of the business investment rate quarterly by 5.8% while the market was waiting for increasing by .2% yesterday which weakened the British pound across the broad and from US, we wait for Q4 Preliminary GDP reading to be 5.5% from 5.7% in the first reading and US February Chicago PMI which is expected to be 60 from 61.5 in January and also February University of Michigan Confidence final reading to be 74.3 from 74.4.

Best wishes

FX Consultant

Walid Salah El Din

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