The Euro is foreseen to gain opposite the US dollar today as optimistic comments by European Commission President Jose Manuel Barroso are likely to append optimism that the worst is over for the Euro Zone. Meanwhile, an estimated rebound in Euro Zone retail sales in November is likewise deemed to suggest that the region is slowly emerging from its downturn.
The threat to the Euro is over. Those were the words declared by Jose Manuel Barroso at a diplomatic conference in Lisbon, Portugal yesterday. Despite the economic slump across the region, Barroso said that single currency was no longer at risk of a catastrophic collapse. According to him, the turning point to the crisis was last September’s promise from the European Central Bank to buy unlimited amounts of Euro Zone debt. He said that investors now understood that EU leaders had committed themselves to the currency’s survival. Barroso said that in 2013, the question will not be if the Euro will, or will not implode. Instead, he argued that the European Union now has to ensure its institutions were fit for purpose.
In likely an appropriate reflection of his remarks, a report yesterday revealed that investor confidence in the bloc is on an improving trend. The Sentix Investor Confidence index jumped from -16.8 points to -7.0 points in January, exceeding forecasts of a modest improvement to a grade of -13.7. The January figure is the highest since February 2011, suggesting a brighter outlook for the region on vastly improved investor moods. Another potentially optimistic report for the region’s economy is on tap today as Eurostat is awaited to report that Retail Sales recovered in November. Purchases are said to have increased by 0.3 percent in November, partially recovering from the 1.2 percent dip in the previous month, suggesting that Euro Zone consumers ramped up spending leading to the holiday season. Although the region remains mired in recession, the report is believed to provide optimism that improving consumer confidence could carry the region on track for a recovery this year. Considering these, a long position is recommended for the EUR/USD trades today.
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