EU is Failing to Contain Its Debt Crisis
byon April 6th, 2012 at 05:39 AM (11415 Views)
It took just 4 days to fall back to 1.3030 from 1.3380 level which the pair had spent 9 days to reach. Yesterday EUR/USD tested 1.3030 support as Spain's debt burden renewed concerns about the eurozone's fiscal stability and after industrial production figures out of Germany disappointed the market. EUR/USD halted at its critical support, 1.3030. This support level has been a very important level since February. In spite of thin market conditions ahead of the Easter holidays, Non-Farm Employment Change data may create a big impact. Problems in Europe are starting to get more investors’ attention. 1.3000 is also a psychological level. For the next few days, considering that the 1.3000 level was a strong support in the past, it may be hard to break it without sufficient volume. Therefore I believe that it is possible to see a bounce towards 1.3100 or even 1.3150. The bulls have to push EUR/USD above 1.3150 to fight another round. However if the pair breaks 1.3000, speculative selling pressure will increase. In that case, look for support at 1.2970, 1.2929 and 1.2860.
The Monetary Policy Committee left the total of its asset purchases at £325 billion and kept interest rates at 0.5%. Also the latest report from the Office for National Statistics showed manufacturing output unexpectedly declined 1%. GBP/USD fell after the announcements. The pair found support and paused at 1.5802, which is the daily moving average (50). The most probable scenario in today's trading is that we see price retrace to around 1.5880 before continuing its descent. To the upside, expect to see resistance at 1.5920 and 1.5947. If the pair can close above 1.5900, the bullish trend may resume. If the pair ends the week below 1.5800, general outlook will turn to bearish and I will be looking for 1.5650. To the downside, there will be support at 1.5770 and 1.5708.
USD/CAD strengthened yesterday after a government report showed full-time employment in jumped by 70.000 and part-time positions grew by 12.400.This pair keeps failing at the parity level. The bulls have been relentless in their tries but the higher prices are being rejected by traders. Today’s expected trading range is 1.00 and 0.99. Until this trading range is broken, USD/CAD will remain sideways.
AUD/USD paused at 1.0242 (Fibonacci 50%) and had a slightly bullish day as markets refocused on Europe's unresolved debt problems and the possibility of contagion from the eurozone. As price action has been overly bearish for the past few days, it is possible to see the pair moving higher. But in order to that it has to break and hold above 1.0330 resistance level. The next resistance levels are located at 1.0394 and 1.0425. If the bears win the fight, support levels will be 1.0240, 1.0187 and 1.0133.
At the end of each article put Source: Fx Technical Trade
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