Market review for 27.06 – 01.07, 2011
Previous trading week saw strengthening of the euro and other high-risk currencies. Monday, though, started with the drop of the euro due to the increased concerns over the European debt crises and expectations for the results of the Greek parliament voting for the project of the budget deficit reduction. The EUR/USD pair decreased to the minimums of $1,4100 mark. But the European trading session demonstrated rehabilitation of the euro to the $1.4200 mark. Market participants’ optimism was supported by the expectations that Greek Parliament would accept the rigid austerity plan, which would be necessary for the approval of the next bailout tranche from the IMF and the European Community.According to the expectations, the released US statistics turned out to be weak on Monday. The US personal income, personal spending and the Dallas Federal manufacturing activity index (-17.4 against the forecasted -3.1) happened to be below expectations.
The EUR/USD pair demonstrated minimum of $1.4300 during the Asian trading session on Tuesday. Euro showed volatile trading during the European session in the threshold of the voting at the Greek parliament. Special measures for the reduction of the budget deficit would be accepted, aimed to avoid the default. Maximums were set at the $1.4335 level.
The sterling decreased as well and the GBP/USD dropped to $1.5960. The GBP/USD pair showed minimums at the $1.5912 range. On Tuesday the speculations regarding the longer period of the low interest rates in the UK pressured the sterling. The unexpected reduction of the UK GDP below forecasts rendered negative influence on the pound. In the uncertain European situation, the Swiss frank continued to play a role of the save-heaven currency.
During the second part of the day on Tuesday the EUR/USD pair gained back some of its previously lost positions and grew to the $1.4395 range. At the same time according to the released data, the US Consumer confidence index reduced to 58.5 level.
Euro showed consolidation on Wednesday, and the EUR/USD pair grew to its maximums of $1.4400 during the Asian trading session. Market participants were optimistic due to reinforced expectations that the Greek parliament would approve of the austerity measures for the national economy in order to receive the financial help and avoid the default. Some experts noted that the current euro stabilization was only temporary. According to the announcement, the Greek parliament supported the program of the austerity measures. The EUR/USD showed maximums at the $1.4450 level.
Sterling strengthened on Wednesday as well due to the Greek optimism and the GBP/USD pair reached the $1.6014 highs. But the negative movement of the pound followed the released weak UK statistics. The UK Net consumer credit turned out to be at the lower level than forecasted.
Against the background of the growing inflation in Europe, the expectations for the increased interest rate reinforced. As a result, the euro was supported on Thursday. Concerns over the Euro-zone debt crises weakened, and the EUR/USD managed to reach the $1.4500 maximums.
The European session demonstrated maximums of $1.4525. According to the published statistics, the Euro-zone consumer price index grew in June for 2.7%. The German unemployment rate decreased for 8K in June.
The GBP/USD pair showed maximums of $1.6110. After that the pound dropped against the US dollar since the speculations that Great Britain would support the politics of fighting the inflation and not increasing the interest rates. Therefore, the GBP/USD pair dropped for 100 points. Minimums were reached at the $1.5970 level on Thursday.
The greenback decreased in anticipation of the weak US fundamentals release on that day. Eventually the released US Initial jobless claims grew to 428K against the expected 420K. The Chicago Purchasing Manager index for June increased above forecasts.
As a safe-heaven currency, the Japanese yen demonstrated a very unconfident dynamics, since the high-yielding currencies were strengthening, and the USD/JPY pair traded around the Y81.00. level.
EURUSD
If the pair stays above 1.44835 the pair will rise to 1.47697. If the pair declines below 1.44835 the pair will decline to 1.41130.
Resistance: 1.44835, 1.47697, 1.50676
Support: 1.41130, 1.37441, 1.33427
GBPUSD
The pair is testing Moving Average (100) at 1.60498. If the pair stays above this level the pair will rise to 1.64274. If the pair declines 1.59962 the pair will decline to 1.57489.
Resistance: 1.64274, 1.68504, 1.72652
Support: 1.59962, 1.52523, 1.48532
USDCHF
The pair has declined to 0.82723. The pair may roll back to channel line at 0.85633.
Resistance: 0.85633, 0.88022, 0.91074
Support: 0.82723, 0.79957, 0.76882
USDJPY
The pair has declined to 80.244. If the pair stays above this level the pair will rise to 83.330.
Resistance: 83.330, 86.836, 90.909
Support: 80.244, 76.535, 73.126
AUDUSD
The pair has risen to 1.07806 and aiming to return to 1.05810.
Resistance: 1.07806, 1.09604, 1.11831
Support: 1.05810, 1.03847, 1.01873