EUROPEAN SOLUTIONS

'While European political leaders discuss the future of public funding and come up with new and innovative ideas of how to get the recurring crisis scenarios under control, America is somehow satisfied with its recently reached debt ceiling agreement.' This could be the conclusion markets have reached.

As a result, the dollar remains under pressure, risk aversion trades are being unwound, stocks recover slowly from the uncertainty of the economic environment, and gold continues its rise undeterred.

Interestingly, the longer term Euro charts are bracing for a bullish brake-out. Certainly, such a break-out could fail at any time, however technical charts leave almost no option to a bull move at this point of time. While such a move could be driven by the unwinding of extreme cross-rate prices, we continue to see the dollar under pressure.

Overall, the markets still focus on the daily economic and political news, at the same time consolidating recent extreme price movements. Gold tells us the story - the crisis scenarios are still there and real solutions have not been found nor have they been implemented. What is next? The question remains. Increasingly negative economic data releases in recent days make any positive forecasts seem unrealistic, therefore we are looking at consolidating price movements during the next few days.

Have fun during the final few trading days of this short week.

Yours sincerely,
Gerhard