Market review for 12 – 16.03, 2012
Euro: The positive expectations of the meeting of the European countries finance ministers’, which was scheduled on Tuesday in Brussels, supported the trading dynamics of the Euro currency and the EUR/USD pair after consolidation at the $1.3120 area grew up recording the European trading session high at the $1.3135 area on Monday. After the big intraday sell-off on Tuesday, the Euro currency was able to recover against the U.S. dollar, supported by the positive news from the German ZEW institute, which published report on the index of business environment, Economic Sentiment of the euro zone that unexpectedly grew in March to 11 points against the forecasted 3.8. The German’s Economic Sentiment index also surprisingly jumped in March to 22.3 points against the forecasted 10. The information that Euro group agreed to allocate a new tranche of Greece financial aid helped the EUR / USD couple to strengthen to the region of $ 1.3110.The Euro fell to new lows of $1.3015 on Wednesday. The negative for the euro brought the publication of report on Industrial Production in the euro area, 0.2% compare forecasted 0.6% in January, much worse than expected. The Euro rocketed against the U.S dollar after Friday’s report publication on consumer inflation in the U.S., which fell under the forecasted values. The EUR / USD pair finally closed this week increasing by 0.4%.
US Dollar: Supported the U.S dollar’s trading dynamics on Monday the speculations of reducing the likelihood of a new round of Fed’s quantitative easing program, which was based on the background of U.S. economy’s positive macroeconomic data. The U.S. dollar strengthened against most major currencies after the Tuesday’s FOMC meeting decision of leaving the interest rate in the United States unchanged in the target range of 0 % -0.25 %. The Fed also confirmed the improvements in the U.S. labor market and said that the economy grows at a moderate pace. Saying that, the Federal Reserve reduced the likelihood of a new round of quantitative easing, namely Q3. The only one thing that constrained U.S. dollar growth that day was the positive which happened on the global stock markets. The market participants were buying stocks and futures amid increasing the tendency of taking risks, and, therefore, decreasing demand for the safe assets, like the U.S. dollar. However, after two-day growth, the U.S. Dollar got hammered on Friday after the publication of the CPI report which demonstrated its reduction and, therefore, was the reason of sharp selling of the currency.
British Pound: On Wednesday, during the Asian trading session the GBP / USD pair fell retreating from Tuesday’s highs. The reason for that drop was the release of data on the UK labor market. The statistics recorded that the unemployment rate in January remained unchanged at 8.8%, while the number of Jobless Claims in February increased to 7.2K, more significantly than it was expected. The GBP / USD couple approached to the lows of $1.5658 by the end of the European session. The pound was pressured by the Fitch international rating agency publication regarding the rating outlook of UK. As it was announced, the rating outlook of UK was downgraded to negative from stable, while the long-term sovereign credit ratings was confirmed on the AAA level.
Swiss Franc: The Swiss franc rose against its competitors after the Swiss National Bank raised its forecast for Switzerland economy growth. Also, the Swiss National Bank kept its interest rate unchanged as it was forecasted.
Japanese Yen: The USD / JPY pair fell to the lows of Y80.97 after the Bank of Japan decided to leave interest rate and a program of asset purchases unchanged. On Wednesday, the yen fell to the lows of 83.85 against the U.S dollar, after the profitableness of spread between two-year-old bonds in the USA and Japan had increased up to the most significant levels from July. That makes U.S. dollar more attractive as an asset than Japanese yen.
Weekly technical analysis for 19 – 23.03
The MACD supports pair to rise. The pair may decline to Fibonacci 38% at 1.30820 before continue rising. If the pair breaks 1.30820 it will signal a reverse.
Resistance: 1.33427, 1.37441, 1.41130
Support: 1.28800, 1.25667, 1.20280
The pair is aiming to the Moving Average (100) at 1.59962.
Resistance: 1.59962, 1.64274, 1.68504
Support: 1.52523, 1.48532, 1.43344
The pair has tested Moving Average (100) and rolling back to 0.88022 if support 0.91074 will be broken.
Resistance: 0.93264, 0.96597, 0.99031
Support: 0.91074, 0.88022, 0.85633
The pair has reached Moving Average (100) at 82.245. Strong resistance maybe met at the trend line at 84.356.
Resistance: 83.330, 86.836, 90.909
Support: 80.244, 76.535, 73.126
The pair has returned to support 1.05810 and aiming to 1.07806.
Resistance: 1.07806, 1.09604, 1.11831
Support: 1.05810, 1.03847, 1.01873