Market review for 17 – 21.09.2012
Euro: During past week the euro gradually decreased and reached the lows of 1.2920. The currency started a downtrend as a correction at the beginning of this week after the big rally on background of positive news of the last.On Monday, the EUR / USD pair tried to retest the strength of 1.3171 levels on Monday, slightly fell against its competitors on the eve of the report of investors’ sentiment in Germany. The currency weakened against almost all counterparts due to the negative sentiment on the European stock markets amid the background of fears that there may be a delay in the provision of financial resources to Spain which needs it to solve its financial problems. Accordingly the published report on the economic sentiment in Germany’s business environment from the institute ZEW, the result has improved in September, after decline for four months in a row. The index has increased by 7.3 points to -18.2 levels. On Thursday, the currency fell due to the fact that the index of business activity in the services sector fell to a three-year low. In details, the composite index of purchasing managers in the services and manufacturing sectors in the euro area fell in September to the lowest level since June 2009, the 45.9 value. On the second half of Friday’s trading sessions the Euro attempted to resume the uptrend and came close to 1.3050.
US Dollar: The Dollar Index added 0.8% this week. In the absence of important macroeconomic data the U.S. currency strengthened its position as the correction from a big fall, where market participants analyzed the results of trading last week. The correction, however, in prices has an uncertain character. On Thursday, after the reports showed that the level of production in China continued to decline and the volume of Japanese exports decreased, the dollar strengthened against most major currencies thus confirmed the market demand for safe assets.
British Pound: It was a week was of full of important events for pound such as the publication of data on inflation and the minutes of the last meeting of the Bank of England. The currency held very confident during the week and on Friday strengthened above the previous week highs in the GBP /USD pair, to the level of 1.6310, after the publication of report for net borrowing in the public sector which was slightly below forecasts.
Japanese Yen: On Monday the USD / JPY pair resumed started on Friday uptrend and approached to the highs of Y78.455 and got on Tuesday on speculations that the Bank of Japan will conduct an intervention after the meeting on September 17-18. The markets also waited even more active than an intervention that the Bank of Japan’s will announce new measures to support the economy after the Federal Reserve and the European Central Bank have recently announced theirs. The yen had a quite interesting trading day on Wednesday. The USD / JPY pair rose above Y79.00, after the Bank of Japan decided to implement further easing of monetary policy. The announce of the Bank revealed, that those actions should help to combat prolonged deflation and reduce the high rate of the currency, which limits the exports of country. Also, in this event the central bank mentioned an increase of the size of the asset-purchase program up to 80 trillion and keeping the key interest rate range at 0.0% -0.1% levels, which is the main tool for easing monetary policy. However, despite this good news the Japanese yen strengthened and the USD / JPY pair gave back all won positions sharply falling to Y78.55 at the end of the European session. The reason for that sudden change in sentiment for the currency was the market participants’ interpretations of the measures. They found these measures insufficient for the current situation.
Swiss franc: The Swiss franc strengthened after the government’s expert group has cut its forecast for growth this and next year on the background of the fact that the debt crisis in the Eurozone is the reason for the slowdown in exports in Switzerland. However, the currency fell against its rivals on published data on index of investor expectations from ZEW Survey. According to Credit Suisse ZEW, the index fell more than many economists predicted, to the level of -34.9 versus previous value of -33.3.The Swiss franc fell against its competitors amid the release of the result of report on trade balance in country in August. The data showed a decline to the level of 1.73 billion Swiss francs.
Weekly technical analysis for 24 – 28.09
The pair has tested the Moving Average (500) at 1.31529 and rolling back to 1.28800.
Resistance: 1.33427, 1.37441, 1.41130
Support: 1.28800, 1.25667, 1.20280
The pair has reached the Moving Average (200) at 1.61931.
Resistance: 1.64274, 1.68504, 1.72652
Support: 1.59962, 1.52523, 1.48532
The pair has declined below the Moving Average (100) which is resistance level for the pair 0.94362. If the pair stays below 0.94362 the pair will decline to 0.91074.
Resistance: 0.93264, 0.96597, 0.99031
Support: 0.91074, 0.88022, 0.85633
The pair is trading in the triangle. The pair has drawn 5 waves and may try to break the lower median line 78.110. If the pair stays below 78.110 the pair’s first aim will be at 76.535.
Resistance: 80.244, 83.330, 86.836
Support: 76.535, 73.126, 69.117
The pair is drawing the Double Top figure. If the pair stays below 1.05810 the pair may work out the figure. The end of the figure maybe expected at 1.00031.But first the pair will need to break neckline at 1.02661.
Resistance: 1.05810, 1.07806, 1.09604
Support: 1.03847, 1.01873, 1.00031