NEW ASSESSMENT - 25 October 2011

After last week's consolidation there is a clear technical hint that the Euro may test or even break the 1,40 threshold. Currently, all efforts by the European political establishment are seen positive by the markets. Nevertheless, we should keep in mind that all current plans do not really promise a solution to the crisis as excessive leveraging was the reason for the current funding crisis. A leveraged bailout can therefore only be considered a temporary solution. All eyes will be on the news expected to be released on Wednesday. We therefore consider 1,40 to 1,42 a key resistance.

Our eyes are on oil which has overtaken 91 dollars a barrel. Fundamental demand scenarios seem to support oil prices.

OCTOBER 17 - EURO RALLY STALLS

EURO: The European lead currency managed to maintain a countertrend rally throughout last week. This morning, the Euro even overtook 1,39 versus the Dollar briefly before a technical correction brought prices down below 1,38. Currency traders currently focus on the political activities designed to bring about a longer lasting solution to the Greek 'bankruptcy' problem and a strengthening of the European Financial Stability Facility.

Any longer lasting rally will have to overtake the 1,43 area before a trend change could be localized. For the time being we foresee a consolidation of last week's extensive gains between 1,36 and 1,39.

OCTOBER 12 - Watching from the sidelines

EURO: After testing the 1,31 area versus the Dollar, the European lead currency is supported by the political and financial attempts to find solutions to the bond funding crisis. Today it seems that the European Financial Stability Facility will after all be enlarged because the Slovakian opposition agreed in principal to approve such enlargement during a second referendum by the end of the week. As market movements are in line with sentiments following almost each and every news alert we decided to watch current movements until we feel more confident to enter.

OCTOBER 3, 2011 - KEY TRADING CONSIDERATIONS

EURO: The Euro Currency is highly dependent on financial and political news, however the realization that the Greek debt problem may not disappear without a debt cut or outright bankruptcy will keep the pressure on the currency. A test of 1,30 versus the dollar during this week is likely. This price outlook is underlined by a currently clearly positive Dollar outlook.

OIL: Another Nymex break of $80,00 keeps the outlook for oil at least short-term bearish. The general weak economic projections for 2012 may have added to this price development. Volatility remains high.