Thursday, July 28, 2011

Market Afternoon Overview - 28 July 2011

Previous session overview
The dollar is maintaining its mixed position against other major currencies Thursday after a report showed US pending home sales rose unexpectedly last month. 

That National Association of Realtors says pending home sales were up 2.1% in June. Economists were expecting a 2% decline. 

The dollar remains higher against the euro, but down against the yen. The euro is at USD1.4284 from USD1.4368 late Wednesday. The dollar is at JPY77.86 from JPY77.98.

Gold were flat Thursday as a slightly stronger dollar kept U.S. debt crisis fears in check. Gold for December delivery, the most actively traded contract, was recently up USD1.70, or 0.1%, at USD1619.00 a troy ounce. 

The Canadian dollar made modest gains against its U.S. counterpart Thursday on better-than-forecast U.S. economic data. 

The U.S. dollar was at CAD0.9472 from CAD0.9498 late Wednesday. The Canadian dollar saw a fair bit of action on the crosses with the euro falling to a week's low sliding to CAD1.3518 from CAD1.3646 late Wednesday over debt of some peripheral euro-zone countries.
Market expectation
About EUR/USD analysts commented, if the market breaks below USD1.4250, the lower bound of a critical support zone is at USD1.42 near the 61.8% retracement seen in the 4H chart. A break below that then opens up the USD1.4007 pivot low. Below USD1.40, the market could be sliding towards USD1.3850. This also represents a range bound market, but with some restored optimism in the US debt crisis.

The EUR/JPY dropped another 70 pips in morning trade over the European session. While appearing to find firm resistance at its recent low, further losses are possible as we enter the European afternoon, with critical levels listed at JPY110.66 (Daily Low Jul 18), JPY110.00 (Psychological Level) and JPY109.80 (Daily Low Jul 13). Above resistance is placed at JPY111.81 (Hourly High Jul 28), JPY112.10 (Session High Jul 28) and JPY113.00 (Psychological level).