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Weekly review for 3 - 7. 10, 2011 The uncertainty around the decision regarding the European stability fund continued to pressure the euro during the beginning of the previous trading week. Some of the European countries did not support the idea of the EFSF expansion, in particular, the Slovakian government was experiencing the split with this issue. According to the expectations, the ECB would not increase the interest rates during the next meeting. The released Euro-zone fundamentals did not render any support to the euro on Monday (even though the Euro-zone PMI indices turned out to be above expectations). As a safe-heaven currency, the American dollar strengthened on Monday. Canadian dollar decreased against the major currencies, as concerns over the world economic recession reinforced. Possibility for the commodities' prices drop grew, which pressured the Canadian dollar as well. By the end of the trading day on Monday the EUR/USD dropped as low as the $1.3170 range. The threat of the Greek default became very real after the statement of the government of Greece regarding their inability to reduce expenses according to their agreement with foreign borrowers. As a result, investors started to get rid of the European assets. The GBP/USD pair decreased as well and reached minimums at the $1.5450 range. The USD/JPY pair dropped to the Y76.50 mark, as Japanese yen strengthened as a safe-heaven currency. The EUR/USD pair showed minimums during the first half of Tuesday at the $1.3150 range. Concerns over the spreading of the European crises pressured investors. Market participants were discouraged by the fact that Euro-zone financial ministers did not confirm any decision regarding the new tranche for Greece. According to the released information, the decision for the new tranche would be accepted after October 13-th. The Euro stabilized during the American trading session on the same day after the statement of Ben Bernanke, the Head of the FRS, who said that he was ready for additional measures to stimulate the economy. The EUR/USD reached the $1.3350 maximums. In the meantime the Australian dollar decreased against the greenback after the announcement that the Reserve Bank of Australia left the principal rate unchanged at the level of 4.75%. During the Asian trading session on Wednesday the Euro stepped a bit down after yesterday's significant recovery against the US dollar. The EUR/USD pair traded in the range of $1.3261 - $1.3332. During the European trading session the couple strengthened at the $1.3375 area against the background of speculations relative to the fact that the European Union leaders examined the possibility of further measures aimed for limiting the negative impact of the current debt crisis on the bank system financial condition. The growth of the Euro was limited after the released information from Moody's Investors Service which decreased the credit rating of Italy from "Aa2" to "A2". As a result, the EUR/USD pair retreated to its same day pivot level around the $1.3275 mark. In terms of the released economic fundamentals, the pound dropped against the euro after the released UK report, which showed the economic growth slow-down during the second quarter. The pound decreased for 0.3% to the $1,5438 minimums. The US dollar strengthened against the yen after the published US business activity services index, which turned to be above the forecasted level in September. On Thursday the EUR/USD pair traded in the narrow range of $1.332 - $1.335 due to the expectations for the decision of the European Central Bank on the interest rate. Before the start of the European session, in anticipation of a press conference with the ECB President Trichet, the Euro fell against major currencies and the EUR/USD couple recorded its same day low at $1.3242 level. The ECB, as expected, left interest rates unchanged at 1.50% and the EUR/USD pair strengthened to its daily highs at $1.3433 zone. Against the background of the speculations' increase about whether European leaders reached an agreement that will halt the further spreading of the debt crisis in the region, the US Dollar rate decreased against the most major currencies on Thursday. The British Pound also traded with a decrease. The reason for that was the investors' expectations that the Bank of England could announce its decision regarding some changes in the quantitative easing program. The Bank's decision about leaving interest rates unchanged at 0.50% did not stress much the GBP/USD trading direction, while the increasing in volume of asset purchase program by 75 billion pounds to 275 billion pounds decreased the pair by more than 16 points to $1.5271 mark. The demand for the precious metals increased on Thursday based on the fears that Europe's sovereign debt crisis would drag on the global economy, therefore, the Gold price strengthened and established it's highs at the $1655 area. By the end of the week the EUR/USD managed to increase to the $1.3500 range, and the GBP/USD reached the $1.5650 mark, supported by the released positive fundamentals. But the announcement regarding the reduction of the ratings of Spain and Italy by the 'Fitch' Agency pressured the euro and the pound, and the consecutive pairs dropped.
Weekly technical analysis for 10 - 14. 10, 2011
EURUSD The pair has nearly touched Fibonacci level 38% at 1.30370 and rolling back to Moving Average (200) at 1.37441. Resistance: 1.37441, 1.41130, 1.44835 Support: 1.33427, 1.28800, 1.25667 
GBPUSD The pair has reached Fibonacci 23%. 1.53419 and rolled back. Resistance: 1.59962, 1.64274, 1.68504 Support: 1.52523, 1.48532, 1.43344
USDCHF The pair is aiming to Fibonacci 50% and Moving Average (100) at 0.95470. Resistance: 0.93264, 0.96597, 0.99031 Support: 0.91074, 0.88022, 0.85633 
USDJPY The pair has declined to support level at 76.535 and if the pair stays below this level the pair will decline to 73.126. Resistance: 80.244, 83.330, 86.836 Support: 76.535, 73.126, 69,117 
AUDUSD If the pair stays above Moving Average (100) at 0.97417 the pair will rise to 1.00031. Resistance: 1.00031, 1.01873, 1.03847 Support: 0.97889, 0.94417, 0.89581 
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