Market review for 7 – 11.03, 2011
During the previous trading week the US dollar managed to win back the previously lost positions. In the beginning we saw a diverse trading dynamics of the euro. Euro was supported by the expectations for the reinforced possibility of the interest rate increase by the ECB. The released state bonds’ rating of Greece, announced today by the Moody’s rating agency, was reduced for 3 levels to B1. As a result, the euro dropped against the greenback. But after the European stock indices growth the euro demonstrated maximums at the level of $1,4037. In the beginning of the trading week the GBP/USD pair showed minimums of $1,6230. Nevertheless, the pound followed the positive euro trend, and the GBP/USD demonstrated its maximum of $1,6340. The sterling was supported by the expectations for the interest rate increase at the next meeting of the Bank of England.
On Tuesday concerns over the deteriorating and spreading debt crises in Euro-zone rendered pressure on the euro. Possibility of the ECB interest rate increase and expectations for the release of the strong European fundamentals could not support the euro any more. The EUR/USD pair demonstrated maximums during the Asian session at the $1,3990 level and then decreased. The German Factory orders for January showed growth for 16.0% against the forecasted increase for 15.6% and last month’s drop for 19.6%. The EUR/USD traded at the $1,3900 mark.
At the next meeting of the Euro-zone leaders in Brussels, planned for 24-25 th of March, a new package of measures aimed to stabilize the debt market was supposed to be accepted. Nevertheless, investors were concerned that there were too many controversies in the overcoming debt crises problems. The decision of the Moody’s rating agency to decrease the rating of Greece continued to pressure the euro as well. The greenback showed consolidation on Tuesday, and the decreased oil prices supported the American dollar. The EUR/USD dropped to weekly minimums of $1.3861. The sterling also followed the euro and dropped to $1.6150.
Euro was strengthening on Wednesday due to the expectations for the strong German economic release. The EUR/USD pair traded in the range of $1,3870-$1,3910. During the European trading session the euro reached maximum at the level of $1,3942. Successful Portuguese bond placement supported the euro as well, and the expectations for the increase of the Euro-zone interest rate by the ECB reinforced again. The released German Industrial production increased for 12.5%, which was above the expected level of 11.1%.
British pound managed to grow on Wednesday after the publication of the strong fundamentals. BRC shop price index demonstrated growth for 2.7%, which rendered support to the sterling. The GBP/USD pair strengthened above the $1,6200 mark. Its maximums was set at the level of $1,6243.
Australian dollar dropped against the greenback on the same day, since the released Australian Home loans showed a considerable unexpected drop. Home loans decreased in January for 4.5% against the forecasted decrease for 1.0% and last month’s growth for 2.1%.
Oil continued to trade around the $104 level per barrel.
According to the announced decision of the Bank of New Zealand, the interest rate was reduced for 50 basic points to 2.50%.
On Thursday the Australian Employment change showed decrease for 10.1K while the unemployment rate stayed at the same level of 5.0%. As a result, the Australian dollar dropped against the US dollar. The released Chinese trade balance deficit had a negative influence on the Australian dollar rate as well.
On Thursday the euro demonstrated a negative dynamics. The released announcement of the decreased credit rating of Spain to Aa2 by the Moody’s rating agency with a negative forecast pressured the euro. The EUR/USD pair decreased to the level of $1,3820. The released UK industrial production figures on the same day happened to be above the forecasts, which rendered temporary support to the sterling. On Thursday the UK interest rate has been left at the previous level of 0,50% by the bank of England. The Asset purchase target rate was left at the previous level of 200B. After that the GBP/USD pair showed minimums at $1,6036 mark.
Greenback continued to strengthen during the American trading session. Problems in the Saudi Arabia supported the growing demand for the dollar. The Initial jobless claims increased, but did not have any impact on the market dynamics.
A devastating earthquake, which took place in Japan on Friday, pressured the yen, and the USD/JPY pair grew to the maximums of Y83.29. EUR/USD hit the minimums of $1.3750, and the GBP/USD reached minimums of $1.5974, but later the demand for the risky assets increased and these pairs grew.
Weekly technical analysis for 14 -18. 03 (
EURUSD
The pair is trading near upper border of the triangle. If the pair stays above support 1.37441 the pair may try to break triangle. If the pair declines, it may find support at the Moving Averages (100 and 200) at 1.35492.
Resistance: 1.41130, 1.44835, 1.47697
Support: 1.37441, 1.33427, 1.2800
GBPUSD
The pair has broken triangle resistance. If the pair stays above 1.60822 the pair will rise to 1.64274.
Resistance: 1.64274, 1.68504, 1.72652
Support: 1.59962, 1.52523, 1.48532
USDCHF
The pair is trading in the range between 0.93949 and 0.92026.
Resistance: 0.93264, 0.96525, 0.99031
Support: 0.91074, 0.88022, 0.85633
USDJPY
The pair is closed in the triangle between 83.330 and 81.548. If 81.548 is broken the pair will decline to 80.244.
Resistance: 83.330, 86.836, 90.909
Support: 80.244, 76.535, 73.126
AUDUSD
There is MACD divergence on weekly graph. The pair may start to decline. But only in case if the pair breaks 1.00031, then the pair will decline to 0.97889.
Resistance: 1.01873, 1.03847, 1.05810
Support: 1.00031, 0.97889, 0.94048