Forex News – 6th July 2011

EUR

Moody’s downgraded Portugal rating to Ba1, highlighting that Portugal will require a second round
of official financing before it can return to the private market. EUR/USD was smacked down by +70
pips although a 76.40% recovery has been made, thus drawing the resistance at $1.4465.

The pair remains supported ahead of the ECB Press conference this Thursday along with the rate
expected hike of +25bps. The German Factory orders are due at 10:00am GMT.

USD

As uncertainty engulfs the financial markets again due to Moody’s late downgrade of Portugal late
in yesterday’s session, 3 currencies will prevail.

CHF, JPY and USD. Gold will gain at the same time during risk-aversion.

Those currencies will be carefully monitored as any negative news coming out from the euro zone
or from US will add fuel to the Risk-aversion and those currencies and commodity may be heavily bought.

Commentary

Risk for H&S is seen.

The neckline is drawn at 1.0674, supported via 40MA support. A break under1.0674 will confirm
the reversal pattern, decline may extend towards 50% level at 1.0586 initially.

The ultimate target of the reversal is seen at 1.0400.

Pattern is in place as long as the pair remains under 1.0748

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