ANALYSIS

Market Overview - 09 May 2013

EUR/GBP

In the last few days the pair demonstrates significant growth, which was driven by unexpected decline in the Pound and strong data of the major European economy- Germany. 

Yesterday, the data on German industrial output gave a surprise to investors, as the index went up far above the forecast. Due to this fact the pair went up to the level of 0.8490. After significant rise, the pair fell and continued to trade near the level of 0.8465. 

Today, attention should be focused on the release of British economic data, including industrial output and volume of production in the manufacturing sector. Experts believe that the indices will go down. On Friday German statistics on imports and exports will be known, forecast is positive. 

If the UK economic data will show poor results, as predicted, the pair will continue to grow to the level of 0.8505. Strong German economic data can provide additional support to the pair. Expected levels in the short-term are 0.8505 and 0.8775. 

It is advisable to place long positions with profit taking at the level of 0.8550 (08575). 

On the four-hour chart MACD histogram is in the positive zone above the signal line and is directed upward, indicating continuation of trend.

AUD/USD

Yesterday, the Australian dollar did not show strong dynamics. After the growth in the morning, the AUD gave way to the USD at the American session.

Today, the AUD/USD rate strengthened amid positive macro-statistics from Australia and China. According to the released data, employment rate in Australia amounted to 50100 people against 12000. Unemployment rate fell by 0.1%, amounting to 5.5%.

Consumer price index in China rose by +2.4% against expectation of 2.3%

Support levels: 1.0205, 1.0185 and 1.0154.

Resistance levels: 1.0255, 1.0275 and 1.0290.

EUR/USD

After reaching intraday highs near 1.3193, the Unified European currency has corrected and at the moment traded in the range of 1.3150 -1.3170. Experts believe that the main support to the currency is provided by the news from Portugal, where the 10-year bonds have been recently issued. During the auction demand has considerably exceeded supply, so that the yield of bonds fell to 5.5%.

It also became known today that ECB is considering a chance of buying distressed assets, which will relieve banking system of the EU countries. There is also possible that the lender of last resort will increase the list of securities, which can be used as collateral requirements in exchange for receiving loans. This measure will enable commercial banks to increase level of capital and invest additional liquidity funds into economic sectors.

Recommended trading strategy is to open long positions from the level of 1,3210 with protective orders near 1.3185 and a target of 1.3305 -1.3350.

Source: Liteforex.com