Forex Metal Weekly Newsletter

In this issue:   1. Weekly market review from Forex-Metal. 2. Weekly technical analysis.

Weekly review for 21.11 - 25. 11, 2011

Previous week was a week of the strong dollar, as a save-heaven currency. On Monday the expectations for the weak macro-economic data of the EU region pressured the Euro currency (in particular, the expected further decline of the German Ifo indicator and the PMI index). The EUR /USD pair fell to the area of ??$1.3428. Later, during the second part of the European trading session, the EUR/USD pair was able to partially recover to $1.3475 area, but the pressure still remained. The GBP/USD pair dropped below $1.5650 level to its daily lows at $1.5612 area.

The main reason for that was the released announcement of the British Prime Minister Cameron who stated today that during the next week the Government would present the scale scheme of credit easing, as Great Britain must address the problem of its own debt. At the same time the US Dollar buyers were supported by decreasing European stock markets and the negative dynamics of major U.S. futures. Concerns regarding the situation in EU provided support for the dollar as the currency with the safe haven status. On Monday the Japanese Yen rose against the majority of currencies. The demand for safe assets increased against the rumours that the Democratic Party committee of the American Congress probably won’t be able to agree on the reduction of deficiency in US.

The USD/JPY pair traded between Y76,75-Y76, 98 levels. On Tuesday the Euro recovered against most major competitors after the credit rating agency Moody's confirmed the U.S. credit rating at the AAA level. The EUR/USD pair continued rising and recorded its highs at the $1.3566 area, even despite the fact that a representative of the German authorities said that Germany had no additional plans to address the EU debt crisis. The US dollar retreated against the major currencies amid positive dynamics in the main European stock markets and US indices’ futures and decreasing demand for safe-haven assets. After the announcement of IMF Board’s approval of two new credit packages for increasing the credit available to fight the spreading of the debt crises, the Euro and other risky assets had a push to grow. The euro dropped below the $1.3450 level against the U.S. dollar on Wednesday amid expectations that the credit rating of AAA for France could be affected by the released information from the Belgian newspaper De Standard. The source reported that the planned bailout of the Dexia SA bank was not possible, because Belgium did not provide a consistent share of funding.

Another negative reason that threw the  EUR/USD pair to the $1.3375 level was a report, that showed an unexpectedly significant reduction in industrial orders in the EU. In detail, the Septembers’ orders fell by 6.4% against the forecasted value of -2.7%   Meanwhile the dollar rose against major currencies against the backdrop of increased demand for safe assets due to the negative dynamics of the world's major stock indices. Stock indices declined due to pessimism that has become dominant in the markets after the U.S. and China macroeconomic data. The U.S. GDP for third quarter revision recorded 2.0 % level and it was lower than the preliminary data showed (2.5%), and lower than analysts had expected (2,3%). PMI in the manufacturing sector of China in November 2011 fell to 48 points from 51 points in October.  

On the same day the Canadian dollar grew against most of the major currencies after the release of the Retail Sales report, which grew in September rapidly, and increased the forecasts for the economic growth of the country. And the Australian dollar was under pressure due to the concerns over the situation in Euro-zone. At the beginning of Asian trading session on Thursday the Euro rose against major currencies supported by the demand of investors for the European region assets. One of the reasons for that increase was the positive report of German GDP which recorded the same +0.5% (QoQ) and +2.6% (YoY)  as per the forecast. Another reason was the released data that showed that the business climate index in Germany calculated by IFO Institute as the results of November grew to the level of 106.6 points versus forecasted 105.5.

During the European session the EUR/USD pair traded in the $1.3356 - $1.3410. U.S. financial markets  were closed on Thursday due to a National holiday, Thanksgiving  Day.   At the end of the week the EUR/USD dropped below the $1.3250 level, and the British Pound decreased for more than 300 points and traded around the $1.5450 mark. 

Weekly technical analysis for 28.11 - 2. 12, 2011
 
EUR/USD The pair has declined to 1.33427. If the pair stays below this level the pair will decline to the Moving Average (500) at 1.28800. Resistance:  1.37441, 1.41130, 1.44835 Support: 1.33427, 1.28800, 1.25667

GBP/USD The pair stays below 1.59962 and may decline to Fibonacci 23% at 1.53340. Resistance:  1.59962, 1.64274, 1.68504 Support:  1.52523, 1.48532, 1.43344

USD/CHF The pair is trying to stay above 0.91074 this will bring pair to test resistance at 0.93264.  Resistance:  0.93264, 0.96597, 0.99031 Support: 0.91074, 0.88022, 0.85633

USD/JPY The pair is rolling back to 76.535. Resistance:  80.244, 83.330, 86.836 Support:  76.535, 73.126, 69,117

AUD/USD The pair has reached Moving Average (100) at 0.97889. If the pairs stays above 0.97889 then the pair will rise to 1.00031. Resistance:  1.00031, 1.01873, 1.03847 Support:  0.97889, 0.94417, 0.895581