Forex-Metal Daily Analysis -26/07/2012

Market review for 25.07.12: The Euro increased despite negative news from Germany.


Asian and European trading sessions:

Euro: The EUR / USD pair slightly rose after yesterday’s fall. During the European session, despite the weak result of the report on the Index IFO for Business Climate in Germany, which fell in July more than economists’ forecast, the Euro currency strengthened against its competitors.. In details, the index fell to a 103.3 value in July from 105.2 in June and recorded the lowest level since March 2010. The report on business sentiment in Germany also came out negative due to worsening of the situation with debt crisis, which affected the economic outlook and the company’s profits. Today’s positive trading dynamics of the currency were supported by the speech of the head of the management of the European Central Bank, Mr. Nowotny, who said that he sees now a reason for granting a banking license to a Europe fund, the idea that he was rejecting before. Also, the euro responded positively to the comments that the EU is going to move forward on the issue of banking supervision at the beginning of September. In addition, the yield of Italian bonds declined to 6.45% while Spain’s 10-year bond fell by 25 basis points to 7.38% level. The EUR / USD pair strengthened to $ 1.2169 level.

British Pound: The GBP / USD pair traded in a narrow range between $ 1.5488 -$ 1.5516 levels during the Asian session. The report on UK GDP in the second quarter showed a decrease by 0.8% YoY versus forecasted decline by 0.3 %. The first reaction of the British pound was falling against its competitors. Then the currency was able to grow. The GBP / USD pair couple rose to $ 1.5550 yet fell after the publication to $ 1.5467 area.

Japanese Yen: The yen showed a slight increase against most major currencies after the report on Trade balance of June showed a surprisingly positive result. A positive balance of trade amounting to 61.7 billion yen was the first surplus in four months. The result was based on imports of country which declined in June for the first in 30 months. The USD / JPY traded in a range of Y78.09 – Y78.28 during both sessions.

American trading session:

Japanese Yen: Today, Japan reported about the largest trade deficit for the first half of 2012, which amounted to nearly $ 40 billion. The main reason for that result is the need to import oil and liquefied natural gas to supply fuel power plants.

U.S. Dollar: The new U.S. homes sales unexpectedly fell in June. That was the reason of lowering of the dollar index during the session.

Gold: The fact that the dollar came under pressure supported the Gold prices today. The cost of the August gold futures grew to a value of $ 1606.7 per troy ounce on the COMEX.

Oil: Despite the rise throughout the day the oil prices fell by more than 1 % against the report on reserves in U.S. inventories on NYMEX. Accordingly to information from the Ministry of Energy, the amount of crude oil in stocks rose 2.7 million barrels. The cost of the September WTI futures on the NYMEX traded in a range of $ 86.85 to $89.30 per barrel.


Technical analysis for 26.07


If the pair stays below resistance 1.21813 the pair will decline to 1.19332. 
Resistance: 1.21813, 1.23907, 1.25690 
Support: 1.19332, 1.16742, 1.14119 
The pair’s support is 1.54842, resistance 1.56722. 
Resistance: 1.56722, 1.58543, 1.60322 
Support: 1.54842, 1.53482, 1.52063 
The pair has risen to 0.99248 but stays below this level. It may bring pair to decline to 0.98512. MACD divergence warns of possible corrections. First aim is at 0.97427. 
Resistance: 0.99248, 1.00168, 1.02825 
Support: 0.98512, 0.97427, 0.96220 
The pair has worked out Head and Shoulders and declined to 78.345. If the pair stays below this level the pair will decline to 77.439. 
Resistance: 78.345, 79.070, 79.707 
Support: 77.539, 76.463, 75.425 
The pair has risen to the Moving Average (500) 1.03127 and aiming to the resistance line at 1.03535. 
Resistance: 1.03535, 1.04407, 1.05332 
Support: 1.02558, 1.01744, 1.00907