Currency Tech

EURUSD
R 2: 1.3170
R 1: 1.3021
CURRENT: 1.2993
S 1: 1.2905
S 2: 1.2867

USDCHF
R 2: 0.9886
R 1: 0.9784
CURRENT: 0.9743
S 1: 0.9605
S 2: 0.9469

GBPUSD
R 2: 1.5695
R 1: 1.5665
CURRENT: 1.5628
S 1: 1.5513
S 2: 1.5475

USDJPY
R 2: 83.910
R 1: 83.680
CURRENT: 83.07
S 1: 82.670
S 2: 81.890

Market Brief

The EURUSD rose for a third day to a high of 1.3016 on speculations that Asian bond purchases will help in containing the funding crisis in the EU. China has shown interest in buying Spanish bonds and eyes will be tuned for tomorrow when Spain and Italy auctions bonds while Portugal is due for bond auctions today. EURCHF gained to 1.2673 highs, USDJPY dropped to a low of 83.08, EURJPY rose to 108.36 highs, AUDUSD fell to 0.9804, lowest in a month, as floods threaten to slowdown the economy and RBA would refrain from raising interest rates although home loan approvals climbed 2.5% to the highest level of 2010.

Portugal dismissed talks of any bailouts from the EU as it said its 2010 budget deficit will be lower than forecast adding that it had met its target of budget deficit of 7.3% of GDP as it sells 1.25 Billion Euro of debt today. Portugal is raising taxes and cutting wages as it tries to narrow its budget deficit and shows belief that it would be successful in lowering the deficit in order to avoid any bailouts while adding that the economy would contract 1.3% in 2011 after these cuts. On the other hand, if Spain collapses, this could lead to the breakup of the Euro as the EU doesn't have enough resources to rescue the nation.

Spain auctions bonds tomorrow in order to raise money to repay debts and if the auctions are not successful as expected then a collapse could trigger in the currency although China has pledged to buy Spanish bonds in order to help the EU region.

Although today's events calendar would be focused on Portuguese debt auctions, UK releases trade balance figures, EU releases industrial production, while US releases economic optimism, monthly budget statement, import price index and Fed's Beige Book economic report.

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