Forex Analysis

The only way to keep the euro zone together and allow Europe’s single currency to survive is to either withdraw the euro from non-performing economies or move Europe closer to a federalist model with a common supranational government bestowed with the powers to enact fiscal and financial reforms when necessary.

The foreign exchange market is flourishing, as evidenced by a growth rate of nearly 33% per year since 2007 globally. It now comprises nearly 200 billion dollars a day, which represents 13% of total daily cash transactions for all forms of financial investing.

As the global debt crisis hits as much Europe as the US, it has appeared in the last few weeks in the EUR USD pair trading that investors, especially forex traders, seem to still prefer US dollar over the euro.

The fluctuation in the price of an ounce of gold this past week were closely linked to the ups and downs of the most traded currency pair, the EUR/USD, and show just how well the values of each financial asset impact each other’s pricing.

In the middle of a major financial crisis in Europe and while the euro is under the fire of speculation in the forex markets, the President of the European Commission, José Manuel Barroso, declared in the European Parliament on Wednesday that “[Europe] is facing the most serious challenge of this generation” in reference to the Greece debt crisis.

The sovereign debt crises both in Europe and the US may result in the lowering of credit ratings of additional countries by the major credit rating agences. In Europe for instance, the northern countries could be affected by the southern countries’ situation since they are currently financially supporting them via the European Financial Stability Facility (EFSF).

Read about how forex technical analysts review exchange rate charts to look for chart pattern breakouts before taking a position in their online trading account.

The EU Single currency has been facing hard times for a few days now. The most traded currency pair, the EUR/USD, is the victim of doubts and rumors that flood Forex markets. The euro decreased in value against the US dollar today, trading at 1.3648 at approximately 9:05 A.M. GMT.

The possible collapse of the euro as Europe’s single currency remains one of the worst scenarios possible for the euro zone in wake of the Debt Crisis.

There will come a time when China will be strong enough to make the Yuan the world’s reserve currency, but will take ten years at least; until then the US dollar will continue to rule.

This article covers the technical analysis of expected support and resistance points for EUR/USD, USD/JPY and EUR/GBP for today, September 6th.

As the Debt crisis continues to affect global markets, investors, especially forex traders, seem to still prefer dollar over the euro despite the current shortfall’s of both currencies.

Price action forex traders will look for technical trading signals at various areas on a chart. These include Fibonacci, support and resistance price structure, moving averages and many other mathematically derived levels.