By TraderVox.com
Tradervox.com (Dublin) – The US dollar has been on the retreat for the whole of last week as hopes for solutions in the euro-zone crisis dominated the market. The euro has been on the rise as commodity related currencies rallied. There are several reports expected to be released this week that are expected to change the trend seen last week. Here is a technical analysis for major pairs in foreign exchange market.
EUR/USD: the pair has started on a downward trend but recovered after Draghi made bold statements about the ECB commitment to protecting the euro. The euro/dollar pair fell below the support line of 1.2150 to as low as 1.2043; however, on Draghi’s remarks, the pair rose to close the week under the resistance line at 1.2330. The pair broke out of the weak downward channel and the optimism created will keep the euro supported for much of the week.
GBP/USD: the cross moved up this week as US reported some poor data which are weakening the greenback demand. The pair opened the week at 1.5609 and dropped to 1.5458; however, the pair rose as high as 1.5768 to break the resistance line at 1.5750, even if momentarily before closing the week at 1.5734. The currency has been unable to hold on gains in the past and analysts are expecting the currency to drop during the week.
USD/JPY: the pair reached new lows during the week but rose after Draghi’s comments lowered the demand for safe haven currencies in the market. The cross opened the week lower close to the support line at 78; which held firm. The pair then leaped to 78.68 but could not break it. The cross is expected to rise during the week as BOJ is expected to intervene at some point.
USD/CHF: the pair dropped by almost 150 points last week to close at 0.9742 as the Franc rallied against the greenback. The pair had kicked off the week at a high of 0.9903 and edged higher to 0.9972; however the pair dropped under the 0.97 line and touched 0.9694 as it broke the support line 0.9719 momentarily; the pair the rose to close the week at 0.9742.
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