MP FOREX ADVISORY

This week once again was dominated by the debt crisis in Greece, and to a lesser extent Spain and Portugal, with traders focusing on the prospects of a one trillion dollar rescue package.  The EUR/USD opened the week nearly 200 pips above last week’s close; however, as investors feared the impact of how several fiscal austerity measures designed to reduce debt might undermine prospects for near term economic growth, the EUR/USD sunk to 1.2357 by Friday – its lowest level since October 2008.  If the EUR/USD takes out the 1.2300 level, it may target the 2005 low of 1.1640 over the next few months.  The GBP/USD was very choppy the first half of the week, only to come under strong selling pressure as well by Thursday.  The Cable closed the week at 1.4535.  Our breakout trading model performed extremely well again this week as we were able to sift through the minefield of market apprehension and substantially higher than normal levels of volatility.  Next week should be very interesting as all eyes will continue to be on the European Central Bank in its handling of the current crisis.