Economic difficulties when you want to brake the euro high

The euro has been a high range concussion more than three months, the European Central Bank interest rate increase earlier this month announced 25 basis points to 4.25 percent, pushed up by inflation, a strong euro interest rates in the future under the guidance of the reach out and break through the important resistance 1.5800, Along with the loan-to-the United States once again show the aftermath of the crisis, the euro against the dollar once again, but with the recent disclosure of the euro zone economic data, the euro zone can not be optimistic about the prospects, the economic downturn is expected to reduce interest rate increase.

"Fannie Mae" and "mortgage United States" shares plunge triggered a strong emotional turbulence of financial markets, dampened the heart of the U.S. capital market. Constitution of the U.S. financial industry downturn exacerbated by the country's economic plight, the United States has incurred strong policy response. U.S. rescue action, the dollar took the opportunity to rebound, but the long-term housing market downturn and the credit crisis will continue to push the United States "into the slow recession", and the lagging effect of policy on the euro comeback is the vision of favorable factors.

However, the recent euro zone economic data released one after another, the euro zone economy down the obvious signs. July 14 German Finance Ministry said its second-quarter gross domestic product (GDP) "significant" decline, the German industrial production data in May fell 2.4 percent, the third straight monthly drop; July 23 euro zone May industrial new -4.4% Annual rate of orders were substantially weaker than expected; euro zone is expected July manufacturing purchasing managers index and Germany in July IFO business climate index fell again. Eurozone economic growth driven from the balance of trade data, the trade deficit showed that the accident the high euro exchange rate has led to the euro zone exports were suppressed enterprises, and emerging market demand is not strong as expected. Therefore economic outlook is not optimistic. Eurozone economic downturn reduced expectations of an interest rate increase, coupled with inflation in the short term is difficult to come down, so the euro zone interest rates to remain on the inflation outlook.

Technical analysis, from K Line of Japan, the euro strong policy voice in the United States and the impact of the euro zone driven by unfavorable economic data out of 200 points or more, breaking Feibonaqi 61.8 percent retracement of the euro short-term downward momentum surviving, 1.5660 will be an important support level, this level of the exchange rate close to Brin Daixia orbit. In this short-term support can be done more effectively confirmed the euro. The medium term, the euro since March so far has been in a situation of finishing wide shocks, but also form the 100-day MA speaking clearly supporting role. Investors may make reference to the average interval to operate.