Market review for 7 – 11. 02, 2011
The previous trading week saw the continuous strengthening of the US dollar. On the first day of the week German factory orders turned out to be below expectations: 19.7% against the forecasted 21.3%. As a result, the euro decreased against the greenback. The EUR/USD pair dropped to the $1,3540 level. Concerns over the instability in Egypt continued to pressure market participants’ trading. Minimums of the EUR/USD pair were set at the $1.3506 level.
The Australian dollar rate demonstrated a negative trend against the American dollar on Monday as well after the released Australian retail sales data during the Asian trading session, which happened to be below expectations: 0.2% against the forecasted 0.5%.
On Tuesday the trading dynamics demonstrated some change. Expectations for the strong Euro-zone fundamentals supported the euro. And the EUR/USD pair reached maximums at the $1.3688 level. Demand for the save-haven currencies started to drop, and the greenback rate decreased against the major currencies. American dollar was under additional pressure of the increased Chinese interest rate. People’s Bank of China announced the interest rate decision on Tuesday: principal rate was increased to 6.06%.
The released on the same day UK RICS House Price balance was better, than expected: -31% compared to the forecasted -38%. As a result, the pound grew against the US dollar and strengthened around the $1.6162 mark. Market participants were concerned regarding the interest rate announcement by the Bank of England, which was planned for this Thursday. But later during the day the decrease of the sterling showed minimums of $1.6080 as a result of the introduced additional taxes for banking institutions in the UK.
The Federal Reserve Chairman, Ben Bernanke, expressed his support of the QE2 program in his statement on Wednesday. He mentioned that this program would help job creation and economic growth. Ben Bernanke also stated that the unemployment level would remain above the “normal level”.
Greenback started to lose its positions during the American trading session, since Ben Bernanke did not mention any intentions to reinforce the credit monetary policies. As a result, the EUR/USD pair managed to hit the $1.3730 maximums. The pound followed the euro growth and the GBP/USD pair reached the $1.6125 highs.
On Thursday the US dollar rate rehabilitated and won its previously lost positions. The greenback was supported by the expectations for the release of the strong fundamentals. Decreased stock markets supported the growing demand for the save-haven assets.
According to the released information, the Bank of England left the principal rate unchanged at the previous level of 0.50% and the Assets purchase target at the previous level of 200B. The sterling was not influenced by this decision and the GBP/USD rate demonstrated moderate trading. The GBP/USD showed minimums of $1.6020.
Concerns over the possible interruptions of oil inventories through the Suez Canal pressured the oil prices, which made the oil rate grow up to $86.93 per barrel. Following the US dollar growth, the oil rate decreased to $86.30 per barrel.
The publication of the US fundamentals rendered additional support to the greenback during the second part of the day on Thursday. Initial jobless claims dropped to 383K against the expected 410K.
On Friday the resignation announcement of the President of Egypt increased the uncertainty of the country’s future, and the demand for the save-haven assets grew, which supported the US dollar rate. As a result, the greenback strengthened against its competitors even more.
Weekly technical analysis for 14 – 18.02
EURUSD
The pair is trading in the triangle. Upper border (resistance) is 1.41130, lower border (support) is 1.30651. The pair needs to break one of these levels to be able continue rising or falling.
Resistance: 1.37441, 1.41130, 1.44835
Support: 1.33427, 1.2800, 1.25667
GBPUSD
The pair has reached channel line at 1.60874. If the pair rises above this level the pair will continue rising aiming to reach Fibonacci retracement 38.2% at 1.64274. If the pair stays below1.60874 the pair will decline to 1.56780.
Resistance: 1.64274, 1.68504, 1.72652
Support: 1.59962, 1.52523, 1.48532
USDCHF
The pair may roll back to support line at 0.96526 before continue rising to 0.99031.
Resistance: 0.99031, 1.01369, 1.04060
Support: 0.96525, 0.93264, 0.91074
USDJPY
The pair is closed in the triangle. Resistance 83.330 supports 81.010. The pair needs to break one of these levels to be able continue rising or declining.
Resistance: 83.330, 86.836, 90.909
Support: 80.244, 76.535, 73.126
AUDUSD
The pair has risen to 1.01873 and rolled back to 1.00031. If 1.00031 is broke the pair will decline to 0.97889.
Resistance: 1.01873, 1.03847, 1.05810
Support: 1.00031, 0.97889, 0.94048