Forex-Metal Daily Analysis -21/07/2011

European Summit expectations increase the demand for the high-risk assets.

Asian and European trading session:
Euro: During the European session Euro rose against the USD due to the increased investors’ optimism regarding achieving of the possible agreement over the Spanish and Italian debt. The EUR/USD pair showed its lows at $1.4130 and then began to recover and reached the $1.4200 mark.
US Dollar: The dollar strengthened during the Asian session against the euro and the pound after the announcement that U.S. President Barack Obama has reached an agreement with a group of six senators over the plan of substantial government spending reductions, primarily for social purposes, and raising of the tax bar. However, during the European session dollar reached a one week low against the euro in anticipation for the agreement between the European on solutions to the debt crisis.
British Pound: Released Minutes of the Meeting of the Bank of England read that the majority of the members believed tightening of monetary policy in the short term was less likely. Before the publication the GBP fell to the lows of $1.6070. But as a result of the released meeting minutes, the GBP/USD pair rose sharply, reaching the $1.6150 highs.
Japanese Yen: The JPY/USD pair fell to the area of Y79.00.
Oil: The August crude rose $1.25 to $98.75 per barrel.
Gold: Gold fell in price by $13.30 to $1,587.80 per troy ounce.

American trading session:
Canadian dollar: The Canadian dollar rose on Wednesday to its highest level since May 2 against the U.S. dollar against the optimistic expectations on the eve of tomorrow’s EU summit. This has led to increased demand for high-risk currencies.
The Canadian dollar was also supporting by yesterday’s comments of the Bank of Canada Governor, Mark Carney, who suggested a likely increase in interest rates in September.


Technical analysis for 21/07

The pair has broken support level and aiming to reach Fibonacci 61.8% at 1.38867. Strong support is at median line at 1.37486.
Resistance: 1.41780, 1.42996, 1.44400
Support: 1.40690, 1.38554, 1.37486
The pair has risen to resistance 1.62050.
Resistance: 1.62050, 1.63316, 1.64636
Support: 1.60322, 1.58543, 1.56722
The pair is aiming to 0.82483. If this level is broken the pair will rise to 0.83541.
Resistance: 0.82483, 0.83541, 0.84685
Support: 0.81356, 0.80313, 0.79115
The pair has broken 79.070 and aiming to 78.345.
Resistance: 79.070, 79.707, 80.438
Support: 78.345, 77.539, 76.463
The pair has risen to the median line at 1.07739. This is a resistance level and the pair may decline to 1.07005.
Resistance: 1.07739, 1.08413, 1.09112
Support: 1.07005, 1.06164, 1.05332