Forex-Metal Daily Analysis -19/07/2012

Market review for 18.07.12: The Bank of England decided to keep its interest rate at a low record level of 0.5 %.


Asian and European trading sessions:

Euro: The Euro slightly fell against the dollar in Asian trade session in anticipation of the vote of German parliament on the issue of assistance of 100 billion Euros from the European stabilization funds for the banking sector in Spain. The EUR / USD pair was trading around $ 1.2300; however, fell to 1.2215 level during the European session. The pressure was provided by the statements of German Chancellor, Ms. Angela Merkel said that “the European project” is under threat and the politics should work harder in order to resolve the situation with the debt crisis in region.

U.S. Dollar: The U.S. dollar was rising slightly against almost all its competitors. Traders were waiting today the publication of regional economic review, the Beige Book as well as the next Fed’s Chairman Mr.Bernanke’s report to Congress. The last speech of the Chairman, Mr. Bernanke who said that the risks for the economy have increased, and the statement that “the Fed is ready to take action if necessary” as well as “the recovery of the labor market is extremely slow” told for many market participants that the Fed is ready to take an action for supporting the growth of the economy provided some volatile on market.

British Pound: The GBP / USD pair was trading between $ 1.5645 -$ 1.5665 during the Asian session. The Bank of England decided to keep its key interest rate at a record low of 0.5 % this month. The pound fell after the Bank’s announcement due to the statements of representatives who said that there is a possibility of future rate reductions. The fact of injecting more cash into the UK economy and stimulate lending along with slowing of inflation in country lead seven members of Bank of England to vote for increasing asset purchase program by 50 billion pounds to 375 billion pounds. The GBP / USD pair has rapidly declined and reached the low of today, the level of 1.5581.

Japanese Yen: The USD / JPY pair fell during the Asian session. A demand for safe assets grew up and was supported by falling of the Asian stock markets. The yen rose against most currencies in anticipation of speech Federal Reserve Chairman Ben Bernanke, who would have spoken today in Congress. The USD / JPY pair is tried to keep the Y78.98 level during the European session.

American trading session:

U.S. Dollar: During the American session, against the second part of speech Fed Chairman Ben Bernanke in Congress the dollar weakened its position against its competitors. Mr. Bernanke refrained again, by repeating a speech of the day before, from giving any details and did not say whether it would be quantitative easing or not.

Gold: The Gold prices had a high volatility session on the background of the final speech of the head Fed of U.S. The August gold futures on the COMEX were trading today in the range of 1567.2 – 1584.5

Oil: The Oil rose and surpassed the mark of $ 90 per barrel for the first time since May. The dynamics of futures were supported by report that recorded a decrease in amount of oil in the U.S. inventories. In details, for the week ended July 13, the commercial oil reserves in the United States (excluding strategic reserves) fell by 800,000 barrels, or 0.2 % – up to 377.4 million barrels. The gasoline inventories decreased by 1.8 million barrels, or 0.9 %, and amounted to 205.9 million barrels. The cost of the August WTI futures grew to $ 90.34 a barrel today on the NYMEX.


Technical analysis for 19.07


The pair has worked out the Flag figure and declined to 1.21813. Now the par is rolling back to 1.23907. 
Resistance: 1.23907, 1.25690, 1.26897 
Support: 1.21813, 1.19332, 1.16790 
The pair is aiming to the Moving Average (100) at 1.57021. 
Resistance: 1.56722, 1.58543, 1.60322 
Support: 1.54842, 1.53482, 1.52063 
The pair is returning to 0.97427, if this level is broken the pair will declined to 0.96220. MACD divergence warns of possible corrections. First aim is at 0.96220. 
Resistance: 0.98512, 0.99248, 1.00168 
Support: 0.97427, 0.96220, 0.95074 
The pair is working out Head and Shoulders, first aim is at 79.070. Second aim is at 78.345. 
Resistance: 79.070, 79.707, 80.438 
Support: 78.345, 77.539, 76.463 
The pair has broken Moving Average (500) and aiming to 1.04407. 
Resistance: 1.04407, 1.05332, 1.06164 
Support: 1.03535, 1.02558, 1.01744