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Currency market review (weekly) after 2nd December, 2011.


Emergency dollar funding cost reduction will help the European banks but I will be looking to see its long-term effect on USD. After forming 7th week low figure, EURO rebounded this week. That was better considering the doubts of OECD.

CURRENCY  ( $ )
2-Dec,2011
11/25/2011-12/2/2011 (%)
11/18/2011-11/25/2011 (%)




USD
78.625
-1.33
2.13
EURO
1.339
1.13
-2.07
AUD
1.021
5.14
-2.99
YEN
77.95
0.34
1.01
RUPEE
51.35
-1.56
1.59
SWISS FRANC
0.919
-1.5
1.85
S.African RAND
8.046
-5.66
4.2
Brazilian REAL
1.791
-4.98
6.01
Mexican PESO
13.63
-3.79
3.27

After nearly 4 weeks Emerging market currencies especially the Asian currencies re-bounded, now there must be some relief for them. Fitch’s long-term rating up gradation and forecast of OECD about the growth of Australian economy in 2012 helped AUD to go higher in early days of the week. AUD gave higher weekly closing after 4 weeks.



Currency Market forecast for coming week

Last week I was telling that EURO may test lower levels and I think it will do that in coming weeks. Now we may see a short-term rise up to 1.39 but ultimately it will drop as chart is saying. As its pattern says that 1.32 is very important level for EURO.
I am quite surprise by the move of USD, I have a feeling it was discounting that joint efforts of different central banks from the first day of the week in advance. It is getting support at 78 level now and if it drops more then it will test 76.5 level. I still think that it can test 80 and higher levels in coming days.
So what I said about AUD, gradually it is getting true. What I think that if it breaks 1.08 level then it is going to react in the upside as its chart pattern is saying. Last few days it made some uncertain figures so I will not surprise if it again test 0.99 level and in the upside its immediate target is 1.04.
Japanese YEN is still unable to break 78 level but look like it may again try that level. In the downside it has immediate target around 77 level. Swiss FRANC got the support of 0.93 and like YEN it can again try that level in coming days. In the downside it has support at 0.895.
I was suspecting that Brazilian REAL is going to test 1.80 level and it just did the same thing. What I think that it will get big support here, in this 1.72 – 1.78 levels, if it breaks this level then it can drop more. In the upside it has immediate resistance at 1.84 areas.
South African RAND’s performance was not good, it just again trying to test its past level. Now it has support at 7.80 area and resistance at 8.30 level.

European Union summit in coming week is very important; many are expecting lot of things from IMF. If any IMF initiative news comes in coming days then that can effect the EURO.



[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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