Forex Tips | Currency Tips- 04-November-2011

EUR/USD pares losses and returns to 1.3800

Euro reversal from 1.3830 high on Wednesday has been contained at 1.3655/65 area, as the pair has bounced up strongly, as equity markets turned into positive territory on speculation of Greece government's collapse, returning to levels right above 1.3800.

On the upside, the Euro might find resistance at 1.3830 (Nov 2 high), and above here, 1.3870 (Nov 1 high) and 1.4000 (61.8% Fib retracement of the Aug-Oct decline). On the downside, support levels are 1.3655 (session low), and below here, 1.3600 (Nov 1 low) and 1.3560 (Oct 11 low).

On the overall, however, the pair remains offered while below 1.3855, 1.3930, says Karen Jones, technical analyst at Commerzbank: "The rebound has been shallow and held below intraday resistance at 1.3855, 1.3930. While capped here the market remains immediately offered. Technical indicators are neutral to negative."

USD/CHF hovering over 0.8800 level

The cross is struggling to post gains for a third day in a raw amid escalating rumors regarding the Eurozone developments, with the Greek government in the center of the scene at this moments.

The greenback is loosing some ground after yesterday’s comments by B. Bernanke downgrading the forecast for the US economic growth in 2011 and 2012, as well as revising to the upside the rate of unemployment for the present year and the next one.

 

USD/CAD headed to yesterday’s low

The USD/CAD wasn’t able to keep up at yesterday’s high price, around 1.0220, and plunged across the board during the European session with no support ground, except a MA cross at 1.0160 zone. The pair kept on falling and, at the moment of writing, trades at yesterday’s low of 1.0126.

The Loonie currency has a negative correlation with the crude oil movement and, during the European session, the oil has been climbing the board, making the USD/CAD to move on the opposite direction. 

 

European markets bounce up on hopes about Papandreu's resignation

European markets have erased initial losses and benchmark indexes have bounced up into positive territory, fuelled by hopes about the resignation of Greece's Prime Minister Papandreu, who has lost the support from his party as most of his colleagues refuse his referendum plan.

Eurostoxx 50 Index i9s trading 1.6% higher , while the German DAX Index rises almost 2.0% and the French CAC 40 Index surges 1.95%. In the UK FTSE Index trades 0.7% higher.

Greek socialist government would be at the brink of collapse according to market sources, Papandreu seems to have lost support by the majority of the parliament as several members of the PASOK ruling party have revealed about the Prime Minister's plan to hold a referendum about the European debt plan.

Gold trades sideways, investors monitor ECB and G20 meetings

Gold was trading sideways in European trading on Thursday, consolidating while investors await ECB and G20 meetings as well as US non-farm payrolls data tomorrow, which are likely to trigger some violent price swings.

Spot gold was last quoted at $1,736.90/1,737.70 per ounce, up $1.40. In the previous session, the metal managed to fully recover Tuesday's losses of two percent to a one-week low of $1,681.30.

On the charts, the next resistance level is pegged at $1,755 and $1,759, while support stands at $1,735 and the 50-day moving average of $1,730.

"In light of today's ECB and G20 meetings, uncertainty looks set to remain elevated," broker Credit Suisse said.