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Weekly review for 9 – 13. 07.12
Euro: Euro continued to be under pressure at the beginning of the week and traded not far from the two-year lows against the U.S. dollar in anticipation of the results of the meeting of the euro zone finance ministers which held in Brussels. The result of the Euro-Zone Sentix Investor Confidence index recorded a drop to -29.6 points in July versus forecasted -26.7 points and the previous value of -28.9 points thus provided pressure on the Euro currency. On the background of the results of the meeting which was held in Brussels where the President of the European Central Bank Mr. Mario Draghi said that the ECB may consider further lowering of interest rates for the reason of supporting the Euro zone’s economic growth. The published result of the Industrial Production report of Italy which showed some growth Also to Euro’s slight rise was contributed. The Euro currency came under pressure and traded near its daily lows when the Prime Minister of Italy Mr. Monti Monti indicated that: “…it would be unreasonable to say that Italy will never need help”. On Wednesday, the published report of German CPI the result of which matched the analysts’ forecasts was considered by market participants as evidence that inflation in the country remained at the 18- month low which equals to the minimum value of December 2010. In details, the annual CPI index remained unchanged 1.7 % in June. The news provided some support for the Euro’s trading dynamics. Also, the news from Spain of launching a set of budget measures contributed to this positive move. The EUR / USD pair strengthened sharply to a level of $1.2295 and tried to keep this conquered level during all European session. The report on Euro zone’s Industrial Production the result of which unexpectedly rose in May, provided some support for the currency. In details, the volume of output of the manufacturing and energy sector changed by 0.6% in monthly term and exceeded analysts’ average forecast, who assumed it unchanged. During the Friday’s American session, the euro has risen sharply on rumors of currency purchases by Austrian bank or covering some short positions. The EUR / USD pair strengthened sharply to a level of $1.2253
U.S. Dollar: The currency was supported by the results of the reports and announcements of the previous week. The Dollar Index rose to the 83.161 value. The dollar was strengthening against most major currencies against the backdrop of continued downtrend of stock markets. After the announcement of the results of published protocol of the FOMC’s last meeting the dollar rose sharply against major traded currencies.. According to this document, the members of the committee decided to leave monetary policy unchanged for 1 month. The Dollar Index by the end of the week reached the highs of 83.990, the maximum values of May 2010.
British Pound: The British pound rose after the published Industrial Production report showed an increase in May by 1.0 % m / m thus exceeded the analyst’s forecasts who expected it fall by 0.2 % m / m. At the same time, the Britain’s trade deficit in May fell sharply as the result of certain change in the exports volume. The GBP / USD couple rose to the highs of $1.5547 area. On Wednesday, the British pound reached its new high against the dollar, the level of $1.5576 amid concerns of investors about the legal settlement of the issue of revitalization fund assistance to the euro zone. This unresolved situation provided an increase in demand for relatively safe currency, the British Pound. The Pound rapidly decreased to the previous day’s lows after the publication of minutes of FOMC meetings
Japanese Yen: The demand for the Yen as for safe asset increased on Tuesday, on the uncertainty about the situation in Euro zone as well as on falling of the U.S. stock markets. In addition to it, the plans of the Central Bank of Japan for refraining from carrying out new incentive programs contributed to the growth of the Japanese currency. The USD / JPY pair updated intraday low of Y79.15 during the Asian session. The pair jumped to the level of 79.76 before the publication of the protocols and continued trading there. The unexpected decision of the Bank of Japan of extending the size of its fund for purchasing the assets from 40 trillion yen to 45 trillion yen made troubles for some Yen’s holders. Indeed, many analysts did not forecast any change in the policy of the Central Bank of Japan. Although, the growth of the currency had corrected after the publication of the decision, the yen continued to rise against most of all its competitors. The Central Bank of Japan also decided to keep its key interest rate unchanged at 0-0.1 %, and the loan program was, however, reduced from 25 trillion yen to 20 trillion yen. The USD / JPY pair fell during the Asian session to the Y79.29 level.
Australian dollar: The Australian dollar fell after reports from the Xinhua News Agency. The report in which the Chinese Premier , Mr. Wen Jiabao stated that the China government’s intention is to conduct a fine job in response to the risks associated with falling economic growth in the country provided a negative effect on the Australian currency. The Australian dollar also fell against the backdrop of negative statistics in Australia. The unemployment rate in Australia in June recorded 5.2% versus 5.1% in May and matched analysts’ forecast of 5.2%. Also, the negative result of government report which showed that employers cut payrolls in June put pressure on currency trading dynamics. The Australian dollar showed one of the biggest drop in the last three months. The Australian dollar against the U.S on Friday’s sessions.
Weekly Technical analysis for 16 – 20.07, 2012
The pair’s strong support maybe found at Fibonacci 50% level at 1.20280.
Resistance: 1.25667, 1.28800, 1.33427
Support: 1.20280, 1.17063, 1.14010
The pair’s resistance is 1.59962. Support is at Fibonacci 23% 1.52523.
Resistance: 1.59962, 1.64274, 1.68504
Support: 1.52523, 1.48532, 1.43344
The pair may rise to Moving Average (200) at 0.99031. MACD divergence warns the possible corrections. The first aim will be at 0.91074.
Resistance: 0.99031, 1.01369, 1.04060
Support: 0.96597, 0.93264, 0.91074
The pair has returned to 80.244 and stays below this level. It may bring pair to test 78.031.
Resistance: 80.244, 83.330, 86.836
Support: 76.535, 73.126, 69.117
The pair is closed between two median lines 1.03847 and 0.99091.
Resistance: 1.03847, 1.05810, 1.07806
Support: 1.01873, 1.00592, 0.97889
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