Italy and Spain are in a very hard situation at the moment. The state of their economy is worse than was once in Britain in the first half of the last century. Britain at least had an opportunity to reject the golden standard. But leaving the Euro zone is much harder. There is no secret nowadays that the monetary union in the EU was created in favor of a few countries at the expense of the others (peripheral countries). The EU leaders created at the first glance conditions impossible to comply with in order to leave the Euro zone. It was in the interest of the EU minority: France and Germany. Others were not taken to account. In recent 10 years the pace of economic growth in the EU was lower than in Japan during the so called lost decade in the 90s. The gap between the rich and poor countries had only increased. Europe is not far from a moment when every 8th European of able to work age will live off the unemployment relief. The inflow of domestic investments in the European economic swamp shrinks rapidly and will be soon exhausted. The monetary union proved its complete failure. But it’s now hard to part with a system which was presented as a brave economic solution, but in fact is nothing more than a bubble. Whatever European officials say any country has a right to its own economic path. Noone can avoid the main economic principles and laws. Including the EU…
Last week the Euro has been depreciation against the US Dollar from 1.3024 to 1.2824 with further bounce 1.2955. There is some positive news about Euro against the background of the rumors that Spain will appeal to EU for aid. The forecast of banks about the Euro has changed from neutral to moderately positive. But the data is not too strong so it is not likely to have a significant impact. Thus the goals are 1.2750 and perhaps even below 1.2550.
Last week the Pound has been depreciating against the US Dollar from 1.6138 to 1.5975 with subsequent rise to 1.6077. The technical picture looks strongly bearish and the downtrend goal is 1.5703.