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Weekly Currency market review after 21st October, 2011.

Euro dropped against the Swiss FRANC  and YEN as tension rises in Euro-area. Not only major currencies but also currencies of the Asian countries are in important levels. Most of the currencies were flat during the week, except the moves in last day of the week.

21st-Oct, 2011

S.African RAND
Brazilian REAL
Mexican PESO

I can understand the reason behind the movement of Swiss FRANC but I don’t understand why Japanese authorities are not taking any step to control their currency. Somewhere I was reading that they may encourage domestic companies in foreign take over, look like they are considering different options. Now it will be a matter to see the extra funding of that 3rd budget that government is going to submit in coming Friday. Whatever they want to do, they need to be fast, before companies shift into other countries.

Currency Market forecast for coming week

I don’t think market is going to get any thing clearly until coming Wednesday, so up to that time investments can shift towards Swiss FRANC and YEN.

This week EURO’s move was flat against the dollar, in the low side it tested 1.36 area as I said in last day. It closed far below 1.40 area, which is a good resistance for it. Last two days moves were good and if things go this way then it can test level above 1.39, where it is getting resistance right now. Coming meetings are very crucial for it, which are going to decide the fate of it’s future. If things become worse it can test 1.34 support level.
Last day I was telling that to test 1.06 level AUD needs to break 1.02-1.04 level first, this week it was trying to break that level. Last day’s move was better. It has a support around 0.99 area, if things become problematic then it can test lower levels.
76 is a good support area for USD, if it breaks that then it can drop more. On the upside it’s target is 79.5 level.
Swiss FRANC is getting support around 0.88, last day’s move was bad. Now it will try to move according to the news from Euro-zone, overall trend is down. YEN’s move in the last day surprise me, probably tension about monetary easing in US is the reason behind this move.
Brazilian REAL tried to test 1.80 level but overall it was flat. So 1.80 level is still a resistance for it and in the downside it has support at 1.70 level.
Mexican PESO broke a crucial 13.50 level but it is getting resistance at 13.70 level, but as I said in last week it is in better condition than REAL. Same thing is true for South African RAND, for it level of resistance is at 8.20.

[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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