During the Asian trading session on Monday the euro was rising against the US dollar against the background of European leaders’ promises that they would agree on an action plan to constrain the EU debt crisis. At the same time the euro was pressured on Monday by the report on business activity in manufacturing and service sectors of the countries of the region and the EU as a whole, which was published during the European trading session. Even the positive report on the EU industrial orders, which turned to be higher in August than its forecast and annually recorded 6.2 % vs. forecasted 5.8 %, did not support the euro and the EUR/USD pair set its daily lows of the $1.3820 mark.
On Monday the investors’ attention was focused on the Japanese yen. After its growth to a record high against the US dollar on previous Friday the likelihood of intervention increased. The pair set its daily lows at Y75.981 which was close to its August low.
The demand for the dollar, as a save-heaven currency, decreased on Monday. The greenback dropped against the main currencies. Positive corporate reports and commodity prices growth supported this trend.
During both trading sessions the euro was trading in a narrow range near its six-week high against the US Dollar amid expectations of the EU countries’ summit. The EUR/USD pair’s range was between $1.3850 and $1.3950 zone. Investors were still look forward with caution awaiting a specific plan to constrain the debt crisis in the EU.
The kiwi dropped against the US Dollar when the statistics agency of New Zealand reported an increase in the Consumer Price Index in Q3 by 0.4% compared with the previous quarter. This growth was below the average forecast of 11 economists, according to which the index should rise by 0.7%.
Another reason for the US Dollar decrease during the American trading session was the statistics which had been published before the US Stock market opening. Consumer confidence index in October dropped from 45.4 points to 39.8, when it was expected to increase to 46 points; In addition, the S&P/Case-Shiller index of housing prices decreased over the 20 US metropolitan regions.
After the Bank of Canada reported that the economy of Canada would grow slower than expected, and kept the interest rate unchanged at 1%, the Canadian dollar fell for the first time in four days against the U.S. dollar.
Australian dollar continued to decrease for a couple of days against most major currencies after the released slowdown in consumer prices in Australia. Investors forecasted that the Reserve bank of Australia would decrease the interest rates.
Japanese currency continued strengthening despite of the speech of the finance minister of Japan, Mr. Azumi, who stated that the Bank of Japan would take “decisive” measures in order to stop the increase of the yen.
Euro dropped against the US dollar on Wednesday as the negotiations regarding the write-off the Greek debts by the bonds’ holders did not have any result, which reinforced the uncertainty of the European crises situation. British pound decreased against the greenback as well (set daily lows at $1.5889) after the released CBI Trends total orders, which showed the most serious drop in 2 years. Canadian dollar demonstrated its strong growth against the US dollar and the euro against the background of the released data on the US durable goods orders, since the US is the leading Canadian trade partner.
During the Asian trading the euro showed dynamic growth on Thursday, which was supported by the results of the EU summit. The reached agreement meant enlargement of the stabilization fund of the EU countries to $1 trillion from the current EUR 440 billion and it also involved the cancellation of 50% of the nominal value of Greek debt to private creditors. The EUR/USD pair was rising during both sessions and climbed to its pick of $1.4220 area. Rising risk appetites led to the decline of the US Dollar against all types of assets. Decreased demand for the safe haven currencies and stock markets rising pressured the US Dollar during all day.
Meanwhile the Japanese yen continued to strengthen, despite the fact that the Bank of Japan decided to enlarge the program of asset purchases by 5 trillion yen. The USD/JPY pair confirmed its new lows at Y75.653 area.
The EUR/USD pair closed the week below the $1.42 level, the GBP/USD pair closed the week around the $1.61 mark.
Weekly technical analysis for 30.10-4.11
EURUSD
The pair has reached Fibonacci 23% at 1.42036 and rolling back to 1.37441.
Resistance: 1.41130, 1.44835, 1.47697
Support: 1.37441, 1.33427, 1.28800
GBPUSD
The pair has tested Moving Average (100) at 1.59962.
Resistance: 1.59962, 1.64274, 1.68504
Support: 1.52523, 1.48532, 1.43344
USDCHF
If the pair stays below 0.88022 the pair may decline to 0.82723.
Resistance: 0.88022, 0.91074, 0.93264
Support: 0.85633, 0.82723, 0.79957
USDJPY
The pair is trying to rise to resistance level at 80.244.
Resistance: 80.244, 83.330, 86.836
Support: 76.535, 73.126, 69,117
AUDUSD
The pair has declined below 1.05810 it may bring pair to support level 1.03847.
Resistance: 1.05810, 1.07806, 1.09604
Support: 1.03847, 1.01873, 1.00031