Forex-Metal Weekly review for 20 – 24. 09, 2010



During the previous trading week the greenback demonstrated weakness before the release of the FOMC meeting, as well, as after it. The
greenback rate showed decrease as the expectations for the FOMC meeting
expressed possibility of the further measures aimed to stimulate the US
economy.
The Federal Open Market
Committee was expected to keep their benchmark interest rate unchanged at 0.25
% during the considerable period of time. The concerns over the slow-down of
the US economy rehabilitation rate reinforced.
And the EUR/USD pair strengthened above the $1,3100 mark. Throughout the whole day the US dollar rate continued to trade around its
5-week minimum against the euro. The demand for the save-haven currencies
dropped.
At the same time Monday saw a strong drop of sterling after the
release of the Rightmove House prices, which showed a decrease for 1.1% in
September.


Speculations regarding the possible increase of the principal interest rate at the next RBA meeting supported the Australian dollar rate growth against the major currencies. The head of the Reserve Bank of
Australia, Glenn Stevens, mentioned that the boom in the mining industry was
expected next year, which would contribute to the economy growth.


On Tuesday the EUR/USD pair managed to reach maximums at the $1,3145 level. Positive results of the bond auction in Spain and Ireland supported the euro. Investors’ optimism
grew as the concerns over the European budget crises dropped. T
he greenback was still
under pressure as the expectations for the negative US fundamentals (especially
in the housing market) reinforced. Concerns that the US economy rehabilitation
rate continued its slow down pace strengthened. Market participants were
waiting for the results of the FOMC meeting. Experts’ forecasts confirmed that
the FRS would keep the interest rates at the low levels during the long period
of time.


At the same time the pound extended its decline and demonstrated a sharp drop on Tuesday. The GBP/USD rate reached the $1,5500 minimums. The released UK budget deficit for August
showed largest figure from 1993.


According to the expectations, the interest rate was left at the previous level of 0,25%, and the FRS mentioned that the principal rate would not be increased for the
extended period of time. The low rehabilitation rate during the recent months
has been confirmed as well. The following decision statement also noted that
the housing market was still at the depressed level. The economic outlook
remained uncertain.


On the same day the yen started to strengthen again, as market participants expected the Japanese government to undertake additional measures aimed to weaken the national currency. The
USD/JPY pair showed minimums at the
Y85,26
mark.
Due to the positive results of the US housing data, the
Japanese yen rate dropped against the euro, since the demand for the
high-yielding assets increased.


At the same time the Australian dollar demonstrated growth on the wave of the increased optimism.


On Wednesday the euro received some support in the threshold on the state bond auction in Portugal, which was expected to show good results, following Spain
and Ireland. And t
he EUR/USD pair set maximums at the
level of $1,3400. It was published later on, that the results of the state bond
auction in Portugal were positive.


On the same day the sterling grew and reached the $1,5620 mark. It happened after the released minutes of the Bank of England for
September, where Andrew Sentance continued to vote for the interest rate raise.


Meanwhile the yen continued to strengthen against the major currencies, which reinforced concerns over the possibility that Japanese government would interfere with
currency market again.


Thursday saw the euro stepping back from the previously reached maximums against the greenback. The released Euro-zone fundamentals escalated investors’ concerns over the rehabilitation of the European economy. In
particular, the Euro-zone Purchasing manager Services index dropped to 53.6,
when it was expected to decrease only to 55.5. The Euro-zone Purchasing manager
Manufacturing index also dropped unexpectedly to 53.6, which was below the
forecasted level of 54.5.


At the same time the released US fundamentals supported the US dollar rate a little during the American trading session, and the greenback stabilized against the euro, as a safe haven
currency. The initial jobless claims grew to 465K against the forecast of 450K.
The existing home sales showed an unexpected growth to 4.13M over the
forecasted 4.10M. The leading indicators index showed increase to 0.3%.


On Friday the euro managed to reach maximums at the level of $1.3495, as the positive European fundamentals were released. The German Ifo Business climate
and German Current assessment indices for September turned out to be higher
than forecasted. At the same time the US durable goods orders dropped below
expectations and the US New home sales for August were below the predicted
level as well.



Weekly technical analysis for 27-01.10 2010



EURUSD


The pair has risen to the Moving Averages 100 and 200 at 1.35015. The pair may roll back to support line at 1.33427.


Resistance: 1.37441, 1.41130, 1.44835


Support: 1.33427, 1.2800, 1.24324





GBPUSD


The pair is aiming to the Moving Average (100) at 1.59962. The pair may roll back after testing Moving Average.


Resistance: 1.59962, 1.64274, 1.68504


Support: 1.52523, 1.48532, 1.43343






USDCHF


The pair has tested support at 0.99031. If the pair closes above this level, the pair will rise to 1.00614.


Resistance: 0.99031, 1.01369, 1.04060


Support: 0.96525, 0.93770, 0.91074





USDJPY


The pair wasn’t able to close above 86.836 and declining. Support at 83.330.


Resistance: 86.836, 90.909, 94.705


Support: 83.330, 80.244, 76.535






AUDUSD


The pair has broken 0.94048 and risen to 0.96201. The pair may roll back to support 0.94048.


Resistance: 0.97889, 1.00031, 1.02299


Support: 0.94048, 0.89581, 0.85561








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