Forex-Metal Weekly Analysis

Euro: On Monday,the Euro gaped up strongly against most major currencies on the background of the news that the European governments have agreed on providing financial assistance to Spain. The EU stabilization fund expected that Spain needs will require up to 100 billion Euros. Moreover, unlike other countries, Spain in exchange for receiving assistance aid would not need to make any retrenchments. The requirements for this help would apply only on its financial sector. The EUR / USD pair was traded around $ 1.2637 at the open and, however, fell steeply down at the following sessions to the lows of $1.2530.The reason for this fall was a still remained pressure on the currency due to the coming on June 17 parliamentary elections in Greece. The euro continued to fall on the next day on the background of growing of the Spanish bonds yields’ to their maximum level of 6, 728 % – the highest level since 29 November 2011 and also after the Fitch Ratings agency informed that Spain will not be able to reach the target level of fiscal deficit. In addition to it, the agency downgraded the rating of 18 Spanish banks. All these negative factors increased again investors’ fears of worsening debt crisis in Europe. The EUR/USD pair fell into the $1.2443 area on that day. The slight growth of the currency on Wednesday was limited due to the results of auctions of Italian government bonds, which recorded an increase in yields to the level of 3.972 % versus 2.34 % for a similar previous release. The downtrend started on Monday was broke on the results of published report on Industrial Production in the euro area the decline of which in April was not so high than the average of analysts’ forecasts. The Euro continued to strengthen against its competitors till the end of the week regaining back all of its losses onexpectations of the positive result of Greek elections.

U.S. Dollar: The dollar opened this week on negative note due to the falling demand for save heaven assets, in connection with the good news from Spain. The speech of the President of the Federal Reserve Bank of Chicago, Mr. Charles Evans put some pressure on the currency and the greenback fell against major currencies on Tuesday. Mr. Evans said that he will support a wide range of measures for creating an increase in the number of jobs in the US country. He also stated that: “More asset purchases would be helpful. More purchases of mortgage-backed securities – that’s good”, meaning by that that he would welcome almost any adaptive policy. The market sentiment after this speech turned away from the expectations for the new round of quantitative easing in the U.S. On the background of published report on U.S. Retail Sales which fell in May for the second consecutive month the dollar dropped against almost all traded currencies. The market participants thought that the issue could show a new sign of a slowing of the U.S. economy. The dollar index on Friday closed this week at 81.5 mark losing about 1%.

BritishPound: The pound rose to its last week highs supporting by the positive market’s sentiment. Although, the report on Industrial Production in the UK rose did not match the analysts expectations the pound grew against its competitors. The Industrial Production in the UK fell to 0.0 % on monthly bases versus forecasted growth to 0. 1%. At the end of the week on Friday the GBP / USD couple showed a very good strength rocketing to the highs of 1.5720 in the last two sessions.

Japanese Yen: The Yen as a Dollar was not at demand at the beginning of this week due to the positive market sentiment which was based on good news from Spain. On Tuesday, after the International Monetary Fund had revealed its readiness to except Japan’s attempts to weaken the national currency the Yen stopped its growth and pulled back falling against major currencies. In details, accordingly the published information, the First Deputy Managing Director of the Foundation, Mr. Lipton said: “We would understand Japans intervention in foreign exchange market.” As the result, the Yen fell against the Dollar to the Y79.70 level. On Friday, the Japanese yen broke down the important level of 79. 20 against the dollar on concerns of results of Greek elections.

Australian dollar: The Australian dollar rose on the reports from China which came out with mixed results. In details, the reports showed decrease in inflation and in Industrial Production yet demonstrated the strong results on exports and imports which reduced concerns about the slowing of the Chinese economy in the nearest future.

NewZealanddollar: After the May’s index of Housing Prices of New Zealand showed a growth, the currency dollars pulled back winning back some of the its recently lost positions.

Weekly technical analysis for 18 – 22.06