Market review for 01.08.12: The Fed of U.S. did not announced any new steps for supporting the National economy.
Asian and European trading sessions:
Euro: The single currency rose against its major competitors after the speech of the Prime Minister of Italy, Mario Monti who stated in an interview with an Italian radio station that he sees the light which began to dawn at the end of the tunnel and Italy and the rest of Europe on the path to it. The EUR / USD pair grew to the level of $1.2335 during the beginning of the European session. The rest of the session the pair consolidated at the $1.2300 level. The market was waiting for decision of the U.S.Fed meetings about the new measures for stimulating economic growth, such as the purchase of government securities or mortgages in order to reduce long-term interest rates.
U.S. Dollar: Demand for the dollar was limited on the eve of today’s publication of interest rate decisions from the Federal Reserve System as well as the report of ADP for July where the Employment Change will be announced.
British Pound: The GBP / USD pair was trading between $ 1.5654 -$ 1.5673, in a very narrow range during the Asian session. During the following session the currency fell after the published UK Purchasing Manager Index Manufacturing report showed that the index of manufacturing activity fell in July to the 45.4 value, their lowest values in the last three years. The index was lower compared 48.6 value in June.
New Zealand dollar: Demand for the currency decreased after the China’s Manufacturing PMI report recorded a decline in the manufacturing industry to the level of 50.1 versus forecasted 50.5.The New Zealand dollar tried to rise however amid speculation that the Fed will implement the next round of quantitative easing.
American trading session:
U.S. Dollar: According to the ADP report, employment increased by 163K in July, against the average forecast of 120K .The results of the report, which in general were optimistic, supported the greenback. The decision of the FRS meeting of leaving the interest rate unchanged and not announcing any new steps in the framework of monetary policy also provided positive for the trading dynamics of the currency. The dollar index grew to 83.2 levels today.
Japanese Yen: The USD / JPY pair dropped during the previous sessions. However, the trend has changed and the Yen fell against other currencies after Japanese Finance Minister Jun Azumi rejected the idea of buying the foreign countries bonds by the Bank of Japan. At the same time Azumi did not exclude the possibility of taking measures to restraint the growth of the yen, including of currency intervention.
Gold: The cost of the August gold futures today fell to 1591.9 dollars per ounce today on the COMEX due to the announce of the decision of Fed of U.S.
Oil: The oil rose on expectations that the world’s central bank would take actions to support economic recovery as well as after U.S. crude stocks fell to the lowest level in seven months. The U.S. Department of Energy reported today that the amount of crude oil in inventories fell last week to 6.522 million barrels, is expected to decrease by 0.709 million barrels. The cost of the September WTI futures rose to a high of $ 89.20 per barrel on the NYMEX.
Technical analysis for 2.08
The pair’s resistance 1.23907, support 1.21813.
Resistance: 1.23907, 1.25690, 1.26897
Support: 1.21813, 1.19332, 1.16742
The pair may return to support at 1.54842.
Resistance: 1.56722, 1.58543, 1.60322
Support: 1.54842, 1.53482, 1.52063
MACD divergence warns of possible corrections. First aim is at 0.97427, second aim 0.96220.
Resistance: 0.98512, 0.99248, 1.00168
Support: 0.97427, 0.96220, 0.95047
If the pair stays below 78.345 the pair will decline to 77.439.
Resistance: 78.345, 79.070, 79.707
Support: 77.539, 76.463, 75.425
The pair is aiming to 1.05332. If this level is broken the pair will rise to 1.06164.
Resistance: 1.05332, 1.06164, 1.07005
Support: 1.04407, 1.03535, 1.02558