Forex Metal Weekly Newsletter

Market review for 5 – 9.12, 2011

During the past week market participants’ were expecting the economic summit of European Union

During the European and Asian trading sessions on Monday the euro rose against most major currencies. There were two main reasons for that growth. First reason had to do with the fact that the Prime Minister of Italy, Mario Monti accepted the measures aimed for achieving a balanced budget by 2013 year. The second reason had to do with the reports that the ECB could provide to the IMF 270 billion dollars, which would be directed towards the fight with the debt crisis in the European Union.

The Euro experienced a deeply fall against the U.S. dollar after the S & P agency warned of possible downgrades the AAA rating of some European countries, including Germany. Other negative news had to do with the report of Retail Sales in Eurozone, which dropped for the 0.4% in October versus forecasted 0.8%.

At the beginning of American session the sterling strengthened against the backdrop of favorable statistics, which showed that the PMI index in the UK service sector amounted to 52.1 points in November, yet was expected to be 50.5 points.

The dynamics of the Euro trading on Tuesday was positively affected by the report on the Germany Factory Orders, which were better than expected; in details, 5.2% versus 1 % in October.

The big news for Australian dollar on that day were a decision of the Reserve Bank of Australia, which cut interest rates by 25 basis points for the second consecutive month to 4.25 %. Australian dollar fell against all major currencies at the beginning of the Asian trading session.

The Swiss franc fell against all major currencies against the backdrop of November’s decline in CPI by 0.5 % compared with the forecasted 0.3%.

During the Asian trading session on Wednesday the EUR/USD pair gained about 30 points amid expectations that Europe would expand the fund for assistance to European countries with debt problems in the Euro region, in the forthcoming meeting in Brussels on Thursday.

The reason for falling of the U.S. dollar at the Asian trading session was the decline in the demand for safe-haven assets.

The Euro currency was under pressure on Thursday against the US Dollar and Japanese Yen amid the concerns of investors that the European countries, Germany and France could lose their AAA credit ratings. These concerns arose because of the rumors that European leaders would not agree on a new plan of restraint of the debt crisis in the EU this week.

Together with US Dollar and for the same reason of increasing demand for safe–haven assets, the Japanese Yen strengthened against the major currencies.

The Loonie fell steeply from its December highs against of the US Dollar, amid concerns about further spread of the European debt crisis and the decreasing demand for risky assets as well as for Oil futures.

The pressure on the single currency increased after the speech of the ECB president, Mario Draghi, who signaled that the European central bank does not want to increase purchases of government bonds of countries of EU region for dealing with debt crises.

Weekly technical analysis for 12.12 – 16.12


The pair has declined to 1.33427. If the pair stays below this level the pair will decline to the Moving Average (500) at 1.28800.

Resistance:  1.37441, 1.41130, 1.44835

Support: 1.33427, 1.28800, 1.25667


The pair stays below 1.59962 and may decline to Fibonacci 23% at 1.53340.

Resistance:  1.59962, 1.64274, 1.68504

Support:  1.52523, 1.48532, 1.43344


The pair is trying to stay above 0.91074 this will bring pair to test resistance at 0.93264.

Resistance:  0.93264, 0.96597, 0.99031

Support: 0.91074, 0.88022, 0.85633


The pair is rolling back to 76.535.

Resistance:  80.244, 83.330, 86.836

Support:  76.535, 73.126, 69,117


The pair has risen above resistance 1.01873. If the pair stays above this level the pair will rise to 1.03847. If the pair stays below 1.01873 the pair will decline to 1.00031.

Resistance:  1.01873, 1.03847, 1.05810

Support:  1.00031, 0.97889, 0.94417