Currency market review (weekly) after 13th January, 2012.

Last day EURO saw more drops; this is just because of rating threat and in contrary USD is gradually testing higher levels. USD and AUD are going up for 3 consecutive weeks. I think EURO is due to show more reactions of this downgrade.

Currencies	13th Jan, 2012	1/6/2011-1/13/2012 (%)	12/30/2011-1/6/2012 (%)
USD	81.46	0.25	1.34
EURO/USD	1.268	-0.16	-1.85
AUD/USD	1.032	0.98	0.19
USD/JPY	76.98	-0.17	0.22
USD/RUPEE	51.43	-2.56	-0.9
Swiss FRANC	0.955	-0.1	2.25
S.African RAND	8.126	-0.45	1.08
Brazilian REAL	1.794	-2.97	-0.7
Mexican PESO	13.591	-0.98	-1.46

China must be concentrating hard on their narrowing trade surplus for 3^rd consecutive year and slowing growth in export for December, 11. Drop in Chinese foreign currency reserve in last quarter of 2011 was really big news and it becomes bigger if that hints that in future we are going to see more drops in Chinese YUAN. Now that can be a big concern for US dollar, because it is already losing some businesses (like Chinese & Japanese deal) as well as many other transactions in gulf countries and the biggest one will be, if EURO recovers.

Currency market forecast for coming week.

In coming days we may see a shift towards safe haven currencies, so USD as well as YEN and Swiss FRANC are the areas that need to look.

As I said in past that for EURO the lower support is 1.15, so now I want to say about the immediate ranges. 1.25–1.26 is a good support for it, next support is 1.22 and if it breaks that then it will go below 1.20. Though it is better that we should talk only about the supports for EURO but if it somehow manages to go up then it will find resistance at 1.32.

For AUD, I am still looking for up move though it is getting resistance at 1.04. The important level for AUD is 1.07-1.08. In the downside it may get support at 1.02 and then at 0.99. But as I said in past that unless it unless it goes below 96, I will be looking for 1.07.

USD is still testing 81.5 levels and in the last day it made a good figure, so it is expected that it may break this level in coming days. Macro things also support an up move for USD for now. If it drops, it may get support at 80.5.

YEN was very flat this week and I am still looking for 78 levels in the upside. In the downside it has good support at 76.

Last week I told that Brazilian REAL may take some more time to break 1.90 and right now it is taking support at 1.78. In the downside it has support at 1.74. South African RAND may break 8.40 in the upside and may test low up to 7.7 in the downside. In coming days these currencies may depreciate more.

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

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