Market review for 9 – 13. 05, 2011
On Monday speculations regarding possible withdrawal of Greece from the Euro-zone were not confirmed, since during the meeting of the Ministers of Finances of the Euro-zone countries this question was not discussed. As a result, the EUR/USD pair tried to strengthen above the $1.4400 level during the Asian trading session. But later the announcement that the S&P credit agency reduced the credit rating of Greece to B level and noted that new reductions were possible, pressured the euro. Therefore, the EUR/USD dropped to $1.4250. Sterling tried to strengthen as well and traded in the range of $1.6330-$1.6410 on Monday. But the released UK data pressured the pound. The Halifax house prices showed an unexpected drop for 3.7%, while the decrease was forecasted for 3.0%. In addition, the forecast of the UK GDP was decreased. The GBP/USD pair dropped to $1.6350 minimums.
Concerns over the possibility that Greece debt would need to be restructured, pressured the euro during the morning trading on Tuesday. It has been also announced that Moody’s and Fitch would decrease the credit ratings for Greece as well. The EUR/USD pair showed minimums of $1,4270. The sterling followed the euro and decreased as well. Possibility that the Bank of England would reduce its economic forecasts pressured the pound. The GBP/USD pair reached minimums at $1.6330 mark.
New-Zealand dollar decreased after the statement of the IMF that the national currency of New-Zealand was overestimated. On the same day the Swiss frank weakened after the released Consumer price index increase below expectations (only 0.1% growth against the forecasted increase for 0.5%).
Problems in Greece reached the point of escalated tension of the public and strikes among the working people. Greeks were against the actions of the Government. Therefore, the euro was under pressure on Wednesday. Greenback started to strengthen on that day in anticipation of the strong US fundamental releases planned for tomorrow.
Sterling followed the weakened euro on Wednesday first. But pound received support on that day due to information from the Bank of England that the UK inflation might increase and reach 5%. Possibility for the principal rate increase reinforced. As a result, the GBP/USD showed temporarily maximums of $1.6500 mark.
Thursday saw a considerable drop of the euro during the European trading session. The EUR/USD pair traded below the $1.4150 minimums. Stock markets decreased, which pressured the high-yielding assets. In addition, the Euro-zone statistics demonstrated negative Industrial production level, which turned out to be below the forecasts. Following the euro, the sterling dropped to $1.6250 minimums. Release of the negative UK fundamentals pressured the sterling. Industrial production for March turned out to be 0.3% against its expectations of 0.8%. Manufacturing production for March was 0.2% against its forecasts of 0.3%.
The publication of the US fundamentals during the American trading session on Thursday did not render any support to the greenback. Initial jobless claims increased for 434K against the forecasted 430K.
Against the background of the weakening American dollar, greenback competitors managed to win back their previously lost positions during the American trading session on Thursday. The EUR/USD pair grew and reached the $1.4250 level. The GBP/USD pair grew and reached the $1.63 mark.
The EUR/USD closed the week around the $1.41 level, since investors were concerned about the Euro-zone debt problems and the restructuring of the Greece debt in particular.
The Japanese yen weakened against the greenback, but could not decrease below the Y81 level, since the Japanese yen played a save-heaven currency role.
Weekly technical analysis for 16 – 20.05
The pair has declined to 1.41130. If the pair stays below this level the support maybe met at 1.37441.
Resistance: 1.44835, 1.47697, 1.50676
Support: 1.41130, 1.37441, 1.33427
The pair is aiming to Moving Average (100) at 1.59962.
Resistance: 1.64274, 1.68504, 1.72652
Support: 1.59962, 1.52523, 1.48532
The pair is aiming to median line at 0.91074.
Resistance: 0.91074, 0.93264, 0.96597
Support: 0.88022, 0.85633, 0.82723
The pair is decline to 80.244 and may rise to median line at 83.330.
Resistance: 83.330, 86.836, 90.909
Support: 80.244, 76.535, 73.126
If the pair is trying to stay below 1.05810 this may bring pair to 1.03847. Strong support is at 1.01873.
Resistance: 1.07806, 1.09604, 1.11831
Support: 1.05810, 1.03847, 1.01873