EURO
The EUR/USD pair fell during the week as problems in Europe remain at the forefront of traders' minds. With all the drama going on in the zone, it is very difficult to buy and hold the Euro for any significant length of time. That said, the U.S. Dollar is the go-to safe-haven currency when times are tough.
The daily chart looks as if it may be forming a bearish flag or, at the very least, a rising wedge. Either way, many traders see this as bearish and will be inclined to sell Euro’s on rallies. Look for fading rallies and closes below the 1.25 level in the week ahead. The Euro closed the week at 1.2570 versus the U.S. Dollar.
BRITISH POUND
The GBP/USD pair fell slightly in the week ended June 22 with a closing level of 1.5585. The British Pound is trading a bit more on fundamentals of late as there has been good economic news to support the currency. British CPI fell 2.2% in the latest reporting period as lower inflationary expectations shone a positive light on interest-rate differentials, which strongly support the Pound versus the Dollar. On the other hand, the Bank of England (BoE) has shown little resolve to stimulate a stagnant economy, which presents as a negative.
JAPANESE YEN
The USD/JPY pair kicked off the week with a small rise that became stronger as the week progressed. After conquering the round number of 80, it never looked back stopping only at 80.60 before ending the week slightly lower. Since the beginning of June, the pair has been trading in an up-trend channel. Note that up-trend support is more significant than up-trend resistance, and that the pair is close to resistance now.
AUSTRALIAN DOLLAR
The AUD/USD pair: The Australian Dollar pushed higher last week, but retraced most of the gains, closing-out at 1.0058. Housing Starts were weak and Chinese data indicated further contraction in the manufacturing sector, which is weighing on the Australian dollar.
AUD/USD opened at 1.0113. The pair climbed to a high of 1.0224 as the resistance line of 1.0230 held firm. The pair then retraced as it dropped perilously close to parity, reaching 1.0008. AUD/USD then moved up, closing the week at 1.0058. AUD/USD is now finding support at the parity line. This important level could be tested if the Aussie continues to weaken. The next support level is 0.9917, which was recently in a resistance role. Below, there is support at 0.9860. This is followed by 0.9780, which has held firm since last November.
The Australian dollar has been on a rollercoaster ride since May. Economic data has been mixed, but recent Chinese data indicates slower growth in the Asian giant’s economy. This is of particular concern to Australia, given that China is the country’s number one trading partner. With the turmoil in the euro zone and weakness in the U.S. economy, investors may stick with safe-haven currencies at the expense of the Australian dollar.
The EUR/USD pair fell during the week as problems in Europe remain at the forefront of traders' minds. With all the drama going on in the zone, it is very difficult to buy and hold the Euro for any significant length of time. That said, the U.S. Dollar is the go-to safe-haven currency when times are tough.
The daily chart looks as if it may be forming a bearish flag or, at the very least, a rising wedge. Either way, many traders see this as bearish and will be inclined to sell Euro’s on rallies. Look for fading rallies and closes below the 1.25 level in the week ahead. The Euro closed the week at 1.2570 versus the U.S. Dollar.
BRITISH POUND
The GBP/USD pair fell slightly in the week ended June 22 with a closing level of 1.5585. The British Pound is trading a bit more on fundamentals of late as there has been good economic news to support the currency. British CPI fell 2.2% in the latest reporting period as lower inflationary expectations shone a positive light on interest-rate differentials, which strongly support the Pound versus the Dollar. On the other hand, the Bank of England (BoE) has shown little resolve to stimulate a stagnant economy, which presents as a negative.
JAPANESE YEN
The USD/JPY pair kicked off the week with a small rise that became stronger as the week progressed. After conquering the round number of 80, it never looked back stopping only at 80.60 before ending the week slightly lower. Since the beginning of June, the pair has been trading in an up-trend channel. Note that up-trend support is more significant than up-trend resistance, and that the pair is close to resistance now.
AUSTRALIAN DOLLAR
The AUD/USD pair: The Australian Dollar pushed higher last week, but retraced most of the gains, closing-out at 1.0058. Housing Starts were weak and Chinese data indicated further contraction in the manufacturing sector, which is weighing on the Australian dollar.
AUD/USD opened at 1.0113. The pair climbed to a high of 1.0224 as the resistance line of 1.0230 held firm. The pair then retraced as it dropped perilously close to parity, reaching 1.0008. AUD/USD then moved up, closing the week at 1.0058. AUD/USD is now finding support at the parity line. This important level could be tested if the Aussie continues to weaken. The next support level is 0.9917, which was recently in a resistance role. Below, there is support at 0.9860. This is followed by 0.9780, which has held firm since last November.
The Australian dollar has been on a rollercoaster ride since May. Economic data has been mixed, but recent Chinese data indicates slower growth in the Asian giant’s economy. This is of particular concern to Australia, given that China is the country’s number one trading partner. With the turmoil in the euro zone and weakness in the U.S. economy, investors may stick with safe-haven currencies at the expense of the Australian dollar.