Market review for 19 – 23.03, 2012
Euro: On Monday, the support for the Euro currency today was delivered by statements of German Chancellor, Ms. Angela Merkel, who reported that the themes of the last meeting of European officials were discussions on providing solutions for increasing help for the Euro region financial system. The Euro repeated its previous Friday’s jump against the dollar and the EUR/USD couple broke the level of 100 -day moving average. This fact was an issue for speculation related to the Euro’s uptrend continuation from a technical point of view. Pressured the Euro currency on Tuesday the existed concerns about the slowdown of the Eurozone economy recovery, which was a consequence of the debt crisis in the region. The EUR / USD couple pair fell to the region of $ 1.3178. The main reason for Wednesday’s growth of Euro was an announcement that Greece Parliament adopted the new loan agreement. This news was supportive for positive Euro currency trading dynamics and increased the demand for European assets. On Thursday, the euro fell against major currencies after the published report on the situation in industrial sector of euro area. In January the value of on industrial orders declined more dramatically than it was expected and, therefore, reinforced market participants’ fears about the deteriorating situation in Euro zone. Also, the report on business activity in the service sectors in France, Germany and the euro zone as a whole in March, according to preliminary estimates was significantly below the forecasted values. The EUR / USD couple during the European session tested the area of support to $ 1.3140. However, the pair was able to recover and, even, after Friday’s rally on the background of weak U.S dollar close at the area of $1.3290.
US Dollar: On Monday, the U.S. dollar continued its downtrend started on Friday, after release of the report on CPI Core Index in the U.S., which fell under the forecasted values. The market participants revised that day their expectations of the continuation of the Fed’s quantitative easing program after the Friday’s negative macroeconomic statistics. On Tuesday, after a representative of the largest mining company in the world, BHP Billiton Ltd, informed the markets about the decline in steel production in China, the U.S. dollar strengthened against most major currencies. This news supported for the demand for safe-haven assets. The dollar continued strengthening after Wednesday’s publication of the U.S. housing market report. In February, the Existing Home Sales fell stronger than it was expected, by 0.9 % to 4.59 million. The dollar rose against its competitors after the Thursday’s report on production index in China. The report signaled a decline. In details, the manufacturing PMI index from HSBC in China was significantly worse than the previous one (48.1 against 49.6 in March to February). Also, the support for the dollar was provided by the falling of World’s equity and future markets. The dollar’s trading dynamics that were supported by positive report on in the U.S., which confirmed the recovering of the U.S. labor market. The number of Jobless Claims last week reached a minimum of 4 years, the value of 348K. However, closer to the end of the week the situation has changed and the greenback gave back all its achievements. The Dollar index closed this week near the previous week lows.
British Pound: The GBP / USD pair fell from the level of $ 1.5895 on Tuesday. The report on inflation in the UK, which has coincided with the predictions, did not noticeably affect the dynamics of the pound sterling. The pound dropped against the U.S. dollar as well against of other major currencies on Wednesday. Pressured the Pound’s trading dynamics the publication of the protocol of the Bank of England last meeting, which was dedicated to monetary policy of England. The protocol revealed that there was a disagreement among committee members regarding the level of QE.
Japanese Yen: At the beginning of the week the Yen strengthened against competitors on speculation about the fact of its excessive oversold against major currencies due to the recent decline. The USD / JPY pair rose to the level of Y84.10 on Wednesday. However, the Yen could not go higher than that due to anticipations of market participants of Thursday’s report on the trade balance. As it was published before, the preliminary estimates recorded the decline in the Japanese export in this month. As the result of the meeting, after Japan announced an unexpectedly growth in trade balance of $ 32.9 billion yen in February after the previous four consecutive months of trade deficits the yen rose against its competitors. By the end of the week the Yen was traded near the levels of Y82 to U.S. dollar.
New Zealand dollar: On Thursday, after report that revealed that the GDP of New Zealand rose by only 0.3%, taking into account the correction for seasonal variations, in the 4th quarter, less than it was forecasted; the New Zealand dollar fell against its competitors.
Australian Dollar: On Tuesday, the Australian dollar traded lower against major traded currencies for two reasons. First, after a representative of the largest mining company in the world, BHP Billiton Ltd warned the markets about falling demand for iron ore. Second, after the Central bank of Australia left open the possibility of reducing interest rates in coming months. However, after the dollar came under pressure across the markets on Thursday and Friday the Australian Dollar moved up, taking back a significant part of its losses.
Weekly technical analysis for 26 – 30.03
1.33427 is a key level for the pair. If the pair stays below this level the pair will decline to Fibonacci 38% and Moving Average (500) at 1.30820.
Resistance: 1.33427, 1.37441, 1.41130
Support: 1.28800, 1.25667, 1.20280
The pair has tested Moving Average (100) at 1.59962 and stays below this level. It may bring pair to test Neckline at .56607.
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 may decline to median line at 1.01873 in case 1.03847 is broken.
Resistance: 1.05810, 1.07806, 1.09604
Support: 1.03847, 1.01873, 1.00592