Daily Forex Analysis by Finexo.com 26/05/2010

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With North Korea pushing the world closer towards another war, causing global stock indexes to sink and fueling risk selling, the US swiftly responded to ease the tension. However, this time around it wasn’t with tanks or F-16 fighter jets, but with the strength of its stock markets. US indexes managed to recover from its huge prior losses, and return to near changed levels – fueling risk appetite amongst Forex traders.
Up ahead, currency traders will want to watch European stock indexes for a similar sign of recovery. The US economy will be today’s primary focus as all significant Housing and Manufacturing figured will be released.

After slipping to hit a new fresh-intraday low, the EUR/USD managed to reverse it’s downwards trend and recover. The key for the EURUSD today is whether the pair will hold above the 1.2250 level. If the pair slips below this key technical level, it could very well push invertors to quickly return to selling the EUR – wiping out yesterday’s entire positive move.
Support/Resistance 1.2250/1.2387

Gold traded above 1200, as the precious metal continued to attract buyers by demonstrating that it can rally both rising in risk appetite and in risk aversion markets. As such, traders will want to be watching to see whether the $1200 level holds and whether rising demand in the metal continues. Below 1200, Gold also continues to have very solid support at 1185.
Support/Resistance 1185,1200/1225,1250

Written by Finexo.com