On Monday, the European currency managed to recover some lost ground against the US dollar and, accordingly, to defend the key support near 1.30, which the couple had already tested in February and mid-March.However, the analytical department ROYALMAXBROKERS schitatet that the next few days can be a real challenge for the single currency in the light of the scheduled for today auction on placement of 12-and 18-month bills in Spain.
eve of the yield on Spanish 10-year bonds for the first time this year, crossed the threshold of 6%, and the cost of insurance against default - contracts CDS - reached a record high of $ 520 thousand. Per insured $ 10 million. The movement returns to the level of 7% may servestrong psychological factor, because this level is considered to be a "point of no return", the achievement of which previously forced Greece, Portugal and Spain to seek international assistance.A number of market participants are looking to the European Central Bank, which can ease the burden of the Spanish, resuming a program to purchase sovereign bonds.However, while the ECB does not indicate such intentions and the Spanish government has to introduce additional budgetary constraints.
team ROYALMAXBROKERS analyzed the disposition of the options market: the picture for the euro looks really alarming, since the ratio of options Put / Call (by volume) is currently 6.07 - that is, the number of rates to reduce to 6 times higher than the rates of growthpair.Besides, the strongest levels of option volume and open interest are formed in the region of 1.25, far below the current 1.3115.This means that the euro may come under strong downward pressure, which resulted in the quotes will update 1.2624 January low.To confirm this scenario requires breaking through 1.30.To reduce the risk of such strong sales require consolidation above 1.3215 - the maximum fourth wave decline that started in late March.Currently, senior analyst ROYALMAXBROKERS sees a more likely scenario: the fall of the euro.Indirectly it confirms the dynamics of the US stock market: NASDAQ index went beyond the boundary of the rising channel, and yesterday has accelerated its decline (just as we predicted in yesterday's review), and on the SP500 Index and DJIA confirmed reversal pattern and has all the prerequisites to reduce withinthe third wave of downward momentum.Another signal traders can get with the silver market: break through important support $ 31 will witness the departure of investors from risk.