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Weekly Currency market review after 14th October, 2011.

This week there was much of an expectation from EURO, as everyone expecting that leaders will create a way. Last day EURO fell after that S&P downgrade but later it recover grounds. Not only in EURO but currencies like AUD has also shown some actions, after that better employment data.

14th-Oct, 2011

S.African RAND
Brazilian REAL
Mexican PESO

After that move in EURO, some corrections were due in USD. Most of the Asian currencies gained this week. Some of the nations saw positive inflows in stock market but I have doubts whether they can keep the flows. WON is in lower position against the dollar which are forcing many business to take new steps against the higher cost. Some of the currencies like REAL, PESO and RAND are showing same type of trend during couple of weeks, in this moment everyone is following the global trend.

Currency Market forecast for coming week

EURO broke the lower highs and lower lows pattern by breaking 1.368 level. Now 1.40 area is a good resistance for it. In the downside 1.36 is the immediate support level. Charts says that it may test 1.36 area again but the outcome G-20 meeting can change many things.
By broking 0.99 area AUD cleared it’s resistance, as I was expecting last day. Now 1.06 is a crucial resistance for it but before that it has to break 1.02-1.04 level convincingly. On the downside it has support around 0.99 level.
USD’s moves surprised me this week. Now it is getting some support at 76- 76.50 level, if it breaks this level then it can drop more. Any bad news from G-20 meeting may again bring a new trend for USD, therefore on the upside it can test 78.5 level again.
YEN’s movement was still flat. During last few weeks I was expecting some move from Japanese authority and look like in coming week they are going to do that, so as I said in last week YEN’s target of 81 is still intact.
As EURO goes up Swiss FRANC moved contrary to it. Now it is getting support at 0.895 level and good support is at 0.88 area. On the upside if it breaks 0.905 it can test higher levels if it gets bad news from Euro-area.
As I said in last week that Brazilian REAL can test level up to 1.70, it was just trying that. This week it was trying to make some base around 1.78 area but it failed. So more chance is that it will try lower levels, but if there is change in situation then it may test 1.80 level.
For Mexican PESO, as I said it tried to test 12.80 level. In fact it tried to make some base around 13.4 level but failed. But it is in better condition than REAL. 13.50 level is the resistance level that needs to be watched. For South African RAND the resistance level is 8.00.
In this moment it looks like markets are trying to discount some good things for risk related currencies, Other surrounding like Japanese intervention is supporting this environment. But any surprise news can steal the attraction from these currencies.

[Rise and drop in currency (under heading currency forecast for 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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