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Weekly Currency market review after 11th November, 2011.

EURO’s weekly closing may be not reflecting the volatility in the financial market; as such it was very flat. UK held their interest rate at 0.5%, which may remove some concern in currencies like AUD. South African RAND dropped when Moody’s lowered its outlook on South African sovereign debt, though later it recovered. Most of the Asian currencies dropped this week. In the last day things were different as many currencies gained on the hope of better days, but I think better days are not there for long.

11/4/2011-11/11/2011 (%)
10/28/2011-11/4/2011 (%)

S.African RAND
Brazilian REAL
Mexican PESO

As we know that due to Euro-zone debt crisis many investors prefer YEN and Swiss FRANC than EURO, as that led to surge into those currencies. Japan supports Euro-zone bailout fund by buying 300m Euro bonds, which is very small in amount comparing it with past. I think Japan does not want to make any change in their dollar reserve so they bought fewer bonds this time.

Currency Market forecast for coming week

There was not much change in currency market, so the levels of last week are more or less valid for coming weeks.
EURO ended very flat this week, I was expecting that in later days of the week it may test 1.42-1.44 level but it did less. It is trading in a small rage, now if it breaks 1.39 then it can test 1.42 in the upside. In downside it has immediate support at 1.35, if it breaks that then it can test 1.32 level.
USD is moving around the same range, it was very flat this week. Last week I was talking about an intermediary levels of 76 to 77.5 level, it is still in the same range. If it breaks these ranges then it has 73.5 level in the downside and 79 in the upside.
As I said in last week, 1.02 level is acting as good support for AUD. I am still expecting that we may see more up move from AUD in coming future. But for that it has to first break 1.07 level in the upside. In the downside it has support at 0.95-0.97, obviously if it breaks 1.02 level.
I told in past week that the move of Japanese authority will not effect in long-term, as such YEN  is again trying to break 77.5 support level, now if it breaks that then it will test 76.5 level. There was some news that Japanese authority is staying away from intervention for now.  Swiss FRANC is moving around the range of 0.86 in the downside and 0.92 in the upside. It has immediate support at 0.885.
Brazilian REAL is still moving around 1.75 area. 1.78-1.80 is still acting as good resistance area for it, so there is a chance that it will test 1.67 level in coming days. If it anyway able to break that 1.80 level then it can test 1.90.
Mexican PESO is getting hard time to break 13.70 level, I will not surprise if in coming days it tests lower levels, may be around 13. As I said in last week that South African RAND is making lower highs and lower lows. This week it did not break 8.20 level which proves that it is following that pattern. Now 8.10 is a resistance for it, if it doesn’t break that then it will drop more in coming days.

[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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