Weekly review on the Forex Market
Dave Green • 2 min read
Last week ended with good signs for the European major currencies. Friday's session was quite busy, with euro climbing up, breaking its 2 weeks resistance. The overall feeling in Friday was that the entering weekend stopped the bullish momentum on the Euro and British Pound in particular. Most eyes this morning are going to focus on these two majors, expecting to keep on with the positive sentiment against the fluctuating U.S. Dollar and bearish Japanese Yen.
Euro zone: good news from Spain pushed the Euro up. The G20 (the 20 leading economies) agreed on a lending sum of $430 billion, hoping this will help fight the enormous European dept. This important release, along with good data coming from the German market, took the Euro 90 pips up just before Friday's closing. Currently, the EUR/USD stands on 1.3214. If positive sentiment continues, this pair might climb after a long period of a bearish trend.
The most impressive movement this week was that of the British Pound. Better than expected data on British retail sales (1.8% increase! Way beyond the previous forecasts for 0.5%) sent it to a 6 months high! In just 4 days, the GBP/USD went 280 pips long, closing on 1.6122.
The U.S.: USD keeps fluctuating, and we are starting to get tired of it:) Mixed data on the U.S. economy confuses traders, who cannot decide either to go long or to go short on this powerful currency. Last week ended with a bearish sentiment, after a couple of mediocre reports on the real estate market. My feeling is that while waiting for major news from the Euro zone, any release taken by the FED would shake things up.
Aussie: Last week started with bearish momentum due to Chinese data with a negative influence on the Aussie. The data coming from China led speculates to believe that the Aussie export is about to be damaged.
Japan: Investors' expectations for a coming round of stimulus acts taken by the BOJ took the JPY down against the USD. Japanese Yen is expected to keep moving short.
So all in all, this heading week, traders' eyes are going to focus particularly on the euro, u.s. dollar, british pound and japanese yen.