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Currency market review (weekly) after 30th March, 2012.

German support to increase rescue fund helped EURO to rise in one month high, this week. On the other hand US dollar fell on Bernanke’s statement. US dollar is facing 3 strait negative weeks.

Currencies
30th March, 2012
3/23/2011-3/30/2012 (%)
3/16/2011-3/23/2012 (%)




USD
78.949
-0.49
-0.55
EURO/USD
1.333
0.45
0.76
AUD/USD
1.034
-1.15
-1.23
USD/JPY
82.295
-0.07
-1.19
USD/RUPEE
51.16
0.51
1.17
Swiss FRANC
0.904
-0.55
-0.76
S.African RAND
7.666
-0.35
1.92
Brazilian REAL
1.821
0.61
0.56
Mexican PESO
12.804
0.46
0.69

AUD is still facing Chinese effect but market is expecting something from 3rd April meeting of RBA. I think after recent economic reports RBA may delay the rate cut. Here I must say that AUD advance for 2nd strait quarter against US dollar. Some of the currencies from emerging market like Indian are still showing drop in their value.




Currency market forecast for coming week.

Let talk about different currencies for coming week.

AUD is trying to break 1.04, as I said in past that if it breaks that then next initial support level is 1.01–1.02 and the worst case for AUD is around 0.97. But it is too much for now and as AUD is in oversold zone so things can reverse from here. What I think 3rd April meeting is important for AUD. If it goes in the upside then it will face initial resistance at 1.06.

EURO is getting resistance below 1.34. last week I was expecting that it may test lower levels in middle to later part of the week, though it tested that but things were different in the last day due to finance minister’s meeting and Spain’s  budget news. If EURO continues its last day move then it may test 1.35 level and as I said in past that if it crosses that then it may trigger a pattern which can take it towards 1.42. I will think about its upside when EURO crosses 1.36, investors who took short positions may think about covering their positions if Euro goes level above 1.36.In spite of all these I am little disappoint with EURO’s move in last few days, in fact in the last day it could be much better. So that reflects that things may be already discounted in the price, therefore EURO may test lower levels on any contrary news. I will be watching 1.30 level very closely, if it breaks that then there is a chance that it may test 1.25 level. Therefore its long-term pattern which says that EURO will be around 1.15 may become true.

 

I was sure that if USD able to stay above level 79 in the early days of the week then it may reverse its position, but it moves were less in the later part of the week. USD’s move in last day of the week was encouraging; it reflects that things may change in coming days. Here I must tell that some technical indicators are saying that USD is in little oversold position. Therefore the level that needs to look is 80.50 level, if it crosses that then I will talk about 82.
But if things do not improve in coming days then I have to think about the negative one which I said during last few weeks, that is USD may drop below 78 and the triggers the bearish pattern. Recent political events also support that move. This negative pattern can take USD around 75 level. So again I want to repeat that 78–82 becomes an important zone for it. I think person who has created long positions, for them 77–77.5 is the important level and for short position the level is 81.

Japanese YEN was flat this week, though it tried higher levels but was not successful. What I think that if it does not rise in early days then it has more chance to test 81 level. But if it rises then it will try to test 85 level.

 

I will be still looking for 0.895 level for Swiss FRANC, if it breaks that then it can drop more. Though it is not clear but FRANC is forming a pattern which suggests that it can drop. On the other hand if FRANC bounces then it may try 0.93 level in coming days.

 

Brazilian REAL is not showing any clear trend; in fact it is showing uncertain movements. REAL is forming confusing pattern, on one side it can go more higher levels if it able to break 1.88 and on the other hand it is forming a negative pattern where from it can drop in future. Looking at this type of movement I think 1.67–1.88 is the range for REAL, where events from around the world will decide its direction.

So South African RAND is still following the channel which I talked during last few weeks, but as now it looks like it will be better to say that it is forming higher highs and higher lows pattern. It has an upper boundary of 7.8 which it may break in coming days if it continues this trend. In fact unless it crosses 8.00, it will be hard to talk about a new trend. On the downside that above mention pattern indicates more drops in near future, therefore important level is 7.40. I think in coming future it will be coming out off the range of 7.5–7.8.



[Currencies are given against US dollar, unless specifically told. Rise and drop in currency (under heading currency forecast for coming week)  means rise & drop in chart figure, not currency’s rise & drop though sometimes it is same in meaning.]

NOTE :  Please see the disclaimer of this blog.

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