Market review for 4.04 – 8.04.2011
The beginning of the previous trading week saw the strong euro growth against the US dollar, which continued during the whole week. Reinforced expectations for the increase of the interest rate by the ECB rendered a strong support for the euro on Monday. The ECB meeting was planned for April 7-th. The EUR/USD pair demonstrated its maximum at the level of $1.4269. At the same time uncertainty expressed by the FRS members regarding the interest rate increase pressured the greenback. Sterling showed considerable growth on Monday as well, since the released UK PMI construction data demonstrated growth to 56.4 above the forecasted 54.8. As a result, the GBP/USD reached the maximums of $1.6176.
The Reserve Bank of Australia published the interest rate decision on Tuesday. According to the expectations the interest rate was left unchanged at the previous level of 4.75%. The Australian dollar rate was not influenced by the rate publication. At the same time the released Trade balance was weaker than the forecasts, as a result, the national currency dropped against the greenback.
Euro and other major currencies demonstrated diverse dynamics on Tuesday. Published economic releases had strong influence on the investors’ decisions on that day. The EUR/USD pair dropped to the minimums of $1.4148 after the release of the Euro-zone Retail sales data, which turned out to be below expectations. The published PMI data could not render support to the euro either. During the Asian and European trading sessions the greenback demonstrated strengthening against the major currencies. Expectations for the increase of the principal rate by the FRS reinforced. At first the pound followed the weakness of the euro and the GBP/USD traded in the range of $1.6100-$1.6140. But the released GB PMI data was much higher than its forecast: 57.1 against the 52.6. Therefore, the GBP/USD showed a strong increase and reached the $1.6250 maximums. Market participants were waiting for the release of the UK interest rate decision, which was planned for this week. During the American trading session the trading dynamics changed, due to the release of the relevant fundamentals in the US and minutes of the FOMC meeting. The ISM Non-manufacturing composite index dropped below its forecasts. Expectations of the future monetary program are still very unclear. As a result, the US dollar turned out to be under pressure. The EUR/USD pair reached the maximum of $1.4246 and the GBP/USD almost hit the $1.6300 maximum.
The euro was supported on Wednesday in anticipation of the interest rate increase. Asian trading session showed maximums of the EUR/USD pair at the level of $1.4270. During the European trading session the EUR/USD pair hit the $1.4315 maximum. Considerable increase of the German factory orders rendered additional support to the euro. The US dollar continued to loose its positions against the major currencies. The GBP/USD pair showed growth to the $1.6364 mark. But after the release of the GB Industrial production data, which demonstrated unexpected decrease below the forecasts, the pound dropped. The released on the same day GB Halifax house prices showed a decrease as well. As a result, the GBP/USD pair dropped to $1.6262 minimums.
According to the expectations, the Bank of Japan would leave the principal rate at the previous level of 0.1%. The USD/JPY pair reached maximum of Y85.52 level on Wednesday.
Gold rate continued to be supported by the increased demand for gold against the reinforced concerns over the Euro-zone budget crises and nuclear problem in Japan. Its maximum was reached at the $1460.95 mark per ounce on Wednesday.
The Australian dollar hit the new historical maximum against the greenback after the released unexpected Employment growth in Australia to the level of 37.8K against the forecasted growth only for 24.0K on Thursday. Unemployment rate decreased as well.
Portugal applied for financial support from European Union. As a result, the euro demonstrated a decrease and the EUR/USD pair dropped to $1.4260 on Thursday. Experts expected Portugal to apply for help but were concerned that the crises would spread on Spain as well. According to the forecasts, the ECB was going to increase the interest rate to the 1.25%. Therefore, the euro reacted with some growth (euro was still under negative influence from Portugal). The EUR/USD managed to reach the $1.4293 maximum. British Pound decreased on the same day after the announcement of the Bank of England that the interest rate would stay at the previous level of 0.5%. The GBP/USD pair showed minimums at the $1.6297 mark.
The recent drop of the yen was too extreme, therefore, on Thursday the yen started to rehabilitate as market participants were buying the yen at its low rate level. According to the expectations, the Bank of Japan left the principal rate unchanged at the previous level of 0.1%. The USD/JPY rate decreased to Y84.89 minimums. The announcement of a new earthquake in Japan on Thursday with magnitude of 7.4 resulted in the strengthening of the national currency against the US dollar.
Weekly technical analysis for 11 – 15.04
EURUSD
The pair has broken channel line and risen to 1.44835. The pair may roll back to 1.42551 before continue rising.
Resistance: 1.44835, 1.47697, 1.50676
Support: 1.41130, 1.37441, 1.33427
GBPUSD
The pair is testing resistance 1.64274. If the pair breaks this level the pair will rise to 1.68504.
Resistance: 1.64274, 1.68504, 1.72652
Support: 1.59962, 1.52523, 1.48532
USDCHF
The pair declines below 0.91074. It may bring pair to test 0.89177 the second time.
Resistance: 0.91074, 0.93264, 0.96525
Support: 0.88022, 0.85633, 0.82723
USDJPY
The pair has broken upper border of the triangle and aiming to Moving Average (100) at 88.748. But before that the pair needs to break 86.836. The pair roll back to 83.330 before continues rising.
Resistance: 86.836, 90.909, 94.707
Support: 83.330, 80.244, 76.535
AUDUSD
The pair has risen to resistance level at 1.05810. The indicators are in overbought zone. The corrections are possible. Strong support maybe met at 1.01873.
Resistance: 1.05810, 1.07806, 1.09604
Support: 1.03847, 1.01873, 1.00031