Forex-Metal Market review for 1 – 5. 11, 2010

Most of the previous week saw the high-risk assets’ growth and the greenback was demonstrating a decreasing dynamics. On Monday the EUR/USD rate showed maximums around the $1.4010 mark, and fell to $1.3950.


The released data from China also resulted in the high-risk assets growth rate. The Chinese PMI index for October grew and reached the level of 54.7 compared to the 53.8 mark last month. Therefore, the US dollar and the Japanese yen were under pressure. The greenback was weakening since the new round of quantitative easing was expected from the FOMC next meeting results.


The GBP/USD pair reached maximums around the level of $1.6080. The released UK manufacturing PMI index for October demonstrated unexpected result: 54.9 against the forecasted mark of 53.0, which rendered additional support to the sterling.

On the threshold of the FOMC meeting, the euro continued to be supported over the greenback on Tuesday. The euro also showed growth against its major competitors. The general demand for the risky assets increased.

The Australian dollar has reached parity against the American dollar after the announcement of the interest rate decision by the Reserve Bank of Australia. The interest rate was increased for 25 basic points unexpectedly, and reached 4.75% level. The RBA Governor, Glenn Stevens, said that the“risk of inflation was rising”.

In the meantime against the background of the US dollar weakening, the oil rate showed growth. The price increased to the $84.00 level per barrel.

On Wednesday the US dollar showed its temporary rehabilitation against the major currencies due to the mid-term US Congress elections’ results, where the Republican party got a majority in the House of Representatives. But the expectations for the FOMC decision release and anticipation for the start of the next quantitative easing round kept the greenback under pressure.

The Japanese financial markets were closed on the same day today due to the national holiday -Culture Day celebration.

According to the released FOMC decision, the key overnight lending rate was kept unchanged at the previous level of 0.25 %. According to the FRS statement, the rates would remain “exceptionally low” for the “extended period”.

The quantitative easing measures included total asset purchases of $850 billion to $900 billion through June and $75 billion per month. FOMC also pointed out the slow economical growth rate and high unemployment rate.

The released US fundamentals turned out to be rather positive. The ADP employment change for October showed unexpected growth for 43K compared to the forecasted growth for 20K. The ISM non-manufacturing composite index for October increased to 54.3 against the forecasted 53.5. And the Factory orders grew in September for 2.1%, which was also above expectations.

The EUR/USD rate continued its growth and traded around the level of $1.4170 during the Thursday morning trading. The maximum was hit at the $1.4263 mark. The greenback was under pressure against the background of the FOMC meeting decision from the previous day.

At the same time the released Halifax house prices in UK showed growth for 1.2% compared to the expected growth for 0.8%, which rendered support to the sterling. According to the expectations, the Bank of England left the principal rate unchanged at thelevel of 0,5%. The quantitative easing program was left at the previous level and the Asset purchase target was set at the 200 billion GBP. The GBP/USD pair grew to the maximums of $1.6237 following the BoE decision.

The released on Wednesday fundamentals supported the New-Zealand dollar rate, which grew against all its counterparts. The unemployment rate decreased to 6.4%, which was below the expectations. And the employment change showed growth for 1.8%, which was also above forecasts. As a result, the possibility, that the Reserve Bank of New-Zealand would increase its principal rates, increased.

The Australian economic data was found disappointing on Thursday, which pressured the national currency. The retail sales for September turned out to be lower than expected: 0.3% against forecasted 0.5%.

The US dollar weakening continued to push the oil prices higher. The oil rate was set at the $85.20 level per barrel during the morning trading. Maximums were reached at the $86.00 mark per barrel.   At the same time the “yellow metal” reached its maximums at the $1366.35 mark per ounce.

According to the expectations, the ECB kepttheir key overnight lending rate unchanged atthe 1.00 %. This record low rate was being kept by the ECB for the 18thconsecutive month. At Jean Claude Trichet’s press conference, the chairman said that he still supported the strategy aimed on wrapping up the non-standard monetary policy measures.

Friday brought some change into the Forex trading dynamics. The greenback managed to win back its previously lost positions. The released positive US fundamentals supported the national currency. The change in non-farm payrolls for October showed increase for 151K against the expected increase for 60K. The unemployment rate turned out to be at the previous level of 9.6%, according to the forecast. At the same time the weak Euro-zone economic outlook on Friday pressured the euro. As a result, the EUR/USD pair closed the week at the level of $1,4022, and the GBP/USD pair decreased to the $1,6164 mark.

Weekly technical analysis for 08 – 12.11 (45/2010)


The pair couldn’t stay above Fibonacci 23.6% and rolled back.Support is at 1.37441. Resistance

Is a trendline at 1.44835.

Resistance:   1.41130, 1.44835, 1.47697

Support:  1. 37441, 1.33427, 1.28004


The pair shows signals of rolling back to support at 1.59962. If the pair stays below 1.59962 the pair will decline to 1.57460.

Resistance:  1.64274, 1.68504, 1.72652

Support:  1.59962, 1.52523, 1.48532


The pair is trading in the narrow range. Strong support is at 0.94621. Strong resistance (a trendline) is at 1.01369.

Resistance:  0.99031, 1.01369, 1.04060

Support:  0.96525, 0.93770, 0.91074


The pair has reached support 80.244 and trying to roll back. Resistance is at 83.330.

Resistance:  83.330, 86.836, 90.909

Support:  80.244, 76.535, 73.126


The pair risen to 1.01873 and rolling back to 1.00031. Strong support is at 0.97889.

Resistance: 1.02299, 1.03847, 1.05810

Support:  1.00031, 0.97889, 0.94048