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EUR/USD Settled The Week With A Net Loss Of Around 200 Pips

Published 05/19/2012, 11:42 AM
EUR/USD

The pair settled the week with a net loss of around 200 pips after it was confirmed that the country is to hold yet another round of elections in June, as such, a caretaker is to takeover the running of the country until then. Still, despite the speculation, the country managed to meet its maturing debt obligation and so the credit event was avoided. Nevertheless, it remains to be seen whether Greece will remain in the euro-zone.

Apart from fretting over the political instability in Greece, market participants digested a raft of downgrades by Moody’s this week, which saw the credit rating agency downgrade ratings on 26 Italian and 16 Spanish banks. In terms of technical levels, supports are seen at 1.2642/24 and then at 1.2600. On the other hand, resistance levels are noted at 1.2749/59 and then at 1.2800.

GBP/USD

The pair finished the week lower after the latest Quarterly Inflation report by the BoE revealed that the central bank expects inflation to be below the target level in 2-3 years, which in turn prompted speculation that another round of QE could be introduced. In turn, the currency lost some of its “safe-haven” appeal and instead it was the traditional risk-off asset classes that benefited the most. In terms of technical levels, supports are seen at 1.5732, 1.5695 and then at 1.5634. On the other hand, resistance levels are seen at 1.5863/89 and then at 1.5933.


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USD/JPY

The pair settled the week lower after the release of less than impressive macro economic data from the US, as well as concerns over the political instability in Greece boosted the demand for safe-haven assets. On a separate note, the Japanese government have boosted its view on the domestic economy for the first time in nine months, raising its assessments on exports and consumer spending, but reiterating that the government is still mindful of risks from Europe. Also, according to people familiar with the BoJ’s thinking, the central bank is likely to leave monetary policy on hold when its board meets next week as political pressure on the bank eases and recent data has been favorable.

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