Daily review 25.05.2012
The Informal summit of EU leaders fail to support the single currency - the euro, as the euro fluctuated in a narrow range above the lowest level in 22 months against the dollar in Asian trading yesterday.
The European single currency remained vulnerable to further decline with continued investor concern the possibility of Greece to get out of the Euro zone. The euro fell 0.4% to 1.2514 dollars above the lowest level since July 2010 and of $ 1.2544 set in the previous session. Euro did not derive support from The informal summit of EU leaders that have not provided a clear vision on how it intends to euro zone countries address the debt crisis, including the possible exit of Greece from the European currency. Union leaders have urged Greece to continue through the completion of austerity and reforms required under the financial rescue program.
The British economy shrank more than expected in the first quarter, when the sector witnessed a decline is the lowest in three years, and thus more likely to pump more liquidity by the Bank of England to support growth. The Great Britain is experiencing a recession for the first time since the financial crisis in 2007.
In the United States, government data showed that new requests for unemployment benefits fell slightly last week, indicating that the labor market continues to grow. The reading of the demand for U.S. durable goods less than expected in April as companies put off plans to buy equipment and asked the army of fewer aircraft indicates that factory activity is losing momentum in the second quarter.
In commodity markets, gold rose yesterday by 0.9% caused by decrease of the dollar because of U.S. data after three days of losses, the euro dropped to its lowest level in almost two years to curb price of the precious metal and shattered the impact of data showing a further increase in the purchases of the central banks of gold last month.
The U.S. crude oil rose on Thursday more than 1%, recovering from the decline in the previous session, in light of the faltering talks between world powers and Iran over its nuclear program, raising fears of supply disruptions and a new conflict in the Middle East, and with the enthusiasm of investors to buy to cover the points of sale after landing prices recently due to concerns about the crisis in the Euro Zone and signs of progress in talks with Iran over its nuclear program.
On Wall Street U.S. stocks closed in a mixed trend:
DOW 0.05% ↓ S&P 0.17%↑ NSDQ 0.39%↑
EUR / USD
The pair in yesterday’s trading dropped for more than 60 points to its lowest level in two years, touching the level of 1.2514 and achieved the highest level in 1.2618 to close at 1.2530.
If the pair will break the support level of 1.2530, it is expected to face the next level of 1.2445, while the breaking the level 1.2600 could postpone achieving these expectations.
The trading range for the day:
Resistance 1.2600 1.2645 1.2685
Support 1.2420 1.2445 1.2500
GBP / USD
Sterling fell against the dollar, more than 40 points, and achieved the highest level in 1.5725, while the lowest in the , 1 5637 .
Most likely the pair will try to test support level at 1.5600, while breaking the level of 1.5710 would delay the achievement of these expectations.
The trading range for the day:
Resistance 1.5710 1.5740 1.5785
Support 1.5540 1.5600 1.5625
Gold
Gold rose yesterday by 0.9% caused by a decrease of the U.S dollar, but the drop of the euro to its lowest level in almost two years is curbing the price of the precious metal.
The precious metal reached it’s highest level in 1577.44, while the lowest in 1551.04.
Most likely, the gold will try to test the resistance level in 1585 while the penetration in the level of 1551 may postpone the achievement of these expectations.
The trading range for the day:
Resistance 1577 1585 1600
Support 1533 1545 1551
Oil WTI - Crude Oil
The U.S. crude oil rose on Thursday more than 1%, recovering from the decline in the previous session, caused by the faltering talks between world powers and Iran over its nuclear program.
In yesterday’s trading the prices of the crude oil were ranging between 91.47 and 89.77 dollars a barrel. Most likely the oil will try to test the resistance level in 91.75, while the penetration in the level of 89.30 could postpone achieving these expectations.
The trading range for the day:
Resistance 91.75 92.50 93.20
Support 87.00 88.90 89.30
