25th September 2017 - It's mostly CDU/CSU, FDP and Greens coalition The success of AfD to gain about 13.5% of the Bundstag weighed down on the single currency opening of the new week. This Far Right Party which has been created in 2014 is not good for EUR or even for the financial markets in EU, but it could build its popularity basing on anti-immigration supporters in 2015 and 2016. The success of AfD was on the account of both CDU/CSU coalition which gained only 32.5% and SPD which retreated to only 20%, after their grant coalition to rule Germany in the recent period. The SPD candidate Martin Shultz refused to be in this same coalition which made his party a second choice and lowered its popularity and its chance to gain the position of the Chancellor. So, now the most possible coalition is to be "CDU/CSU, FDP and Greens" which is good for the industrials such as Siemens, Bosch, Volkswagen, BMW and Daimler and also good for financials like Deutsche Bank and Commerz Bank. As the right Free Democratic Party's program was depending on imposing new easier legislations for business corporations, while the Greens main concern is always the environment. So, Merkel's rule in this Jamaica Coalition then is to pave the way for passing FDP's economic stimulus plans without hurting the financial situation of Germany which is the concern of her conservative CDU party and also without hurting the environment or penetrating Paris climate pact which is the main concern of the Greens. Merkel with this new coalition cannot keep the germane door opened anymore as it has been in 2015 to more than 1 million migrants or as she has promised in the case of facing the same circumstances again. Merkel's action distorted the political situation Germany, as it has not only given the right support, but it also revived racist population direction in the Germany society has almost disappeared. The markets will be focusing on the developments which will rum in Germany and also will be waiting today for the release of Sep Germane IFO, before European Central Bank President Mario Draghi's speech today EURUSD Daily Chart:
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EURUSD failed to maintain a place above 1.20 psychological level last Friday, Before closing last week at 1.1946. EURUSD opened the new week on a downside gap at 1.1921 and it could not fill this gap until now. EURUSD has previously formed a lower high at 1.2032 below its peak at 1.2092 which has been formed on Sep. 8. EURUSD is now in its ninth day of being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.2025. However EURUSD is still underpinned by continued being above its daily SMA50, its daily SMA100 and its daily SMA200, after forming a series of higher lows had started with its formed bottom at 1.0339 on the third day of this year to be the lowest level since December 2002. EURUSD daily RSI-14 is referring now to existence in the neutral region reading 53.176.
EURUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is still having its main line in the neutral region at 44.851 leading to the downside its signal line which is at 46.095.
Important levels: Daily SMA50 @ 1.1827, Daily SMA100 @ 1.1527 and Daily SMA200 @ 1.1095
S&R:
S1: 1.1822
S2: 1.1662
S3: 1.1612
R1: 1.2032
R2: 1.2092
R3: 1.2271
Have a good day Global Market Strategist Walid Salah El Din Mob: +20 12 2465 9143 E-Mail: mail@fx-recommends.com http://www.fx-recommends.com