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Weekly Currency market review after 9th September, 2011.

Swiss National Bank has taken a strong move this week by setting a minimum exchange rate of FRANC  to the EURO. Look like they are so desperate to save their export and I will not wonder if they take more steps, like rate cut in coming days. Now those countries who are benefited from Swiss FRANC they must be little upset with this move.

9th-Sep, 2011

S.African RAND
Brazilian REAL
Mexican PESO

News of Greek default and resignation of key ECB officer have created more burden on EURO. This week EURO was 10-year low against the YEN. On the other side gradually YUAN is getting popular around the world, this week I read somewhere that Nigeria is accepting YUAN for their foreign exchange reserve. Rising unemployment rate overshadowed better GDP figure of Australia, so in this moment Australian authorities may like to hold the rates. Most of the Emerging market currencies are facing some heat of global uncertainties, actually global funds are pulling out moneys from these countries to invest in safer assets.

Coming week

So ultimately EURO selected the southern side. By breaking 1.40 it completely negates the pattern, which I talked during last few weeks. But anyway during last two weeks I told that EURO may not going to make the move in the northern side. The movements of EURO, during last few days of August were not good to prove the pattern. Now it has a support around 1.34 area and if it breaks that then it can go as low as 1.30 level. On the upside it has resistance at 1.40. But situation in Euro-area may force it to test 1.34 level in coming days. (Current status of EURO, as on 9th September, 2011.)

AUD got support around 1.05 level, but situation in world may force it to test lower support of  1.04 in coming days. Look like AUD is making higher highs and higher lows, so in coming days I will be looking whether it follows the same trend.
For EURO it was clear during last two weeks that it may not be going to follow the pattern, but the move of USD, negating the trend was quite quick. Actually both EURO and USD were following exceptional pattern, which we see rarely. Now 78 is a good resistance for USD and on the downside 75 can be a good support for it. If economical things don’t improve then it may test higher resistance.
Last few weeks YEN was flat and looks like it is going to move in higher levels, then 79 will be a good resistance for it in coming days.
Action of Swiss authority compelled Swiss FRANC to go for higher level. Now 0.88 is a resistance for it, if it breaks that then 0.92 will be next resistance for it.
Brazilian REAL move was quite predictable as I said in last week. Now if it breaks 1.68 level then it may test 1.72 level in the upside. It has an initial support at 1.64 area.
For South African RAND it has good resistance at 7.30 and support at 7.00 level.

Now after Switzerland’s move, the options for safe heaven are not more. I will not astonished if in coming days Japanese authorities take similar action. But I have still doubt that, this move will bring success for them. On the other side many of the Emerging countries like South Korea and also ECB are holding their rate hikes, so in coming days there is a chance of that. Though finance minister referred the geek default as rumor but I don’t think that is going to remove doubts in the mind of investors. Everyone will look Greek propose spending cuts and other measures and obviously their budget to get future indications.

[Rise and drop in currency (under heading coming week)  means rise & drop in chart figure, not currency’s rise & drop.]

NOTE :  Please see the disclaimer of this blog .


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