Weekly Market Review 22 of October
OVERVIEW

The US Dollar is trying to find the bottom after a dip triggered by an announcement about the third stage of the quantitative easing (QE3) that is supposed to reduce the collateral risks in the economy. On the contrary the Euro is making attempts to find some political premises for an economically unjustified growth. But that’s just the nature of speculators who are used to buying rumors and selling facts. The correction of positions, that determined that dynamics has exhausted itself. Though the forming process has turned out to be more durable than had been assumed and now it is in its climax. Some analysts are sure that certain factors   won’t let the Dollar to recover. Amid which are political uncertainty in the US because of the approaching elections, the perspective of fiscal fall and related to it issue of the debt limits. It would be fair, if Euro was in this situation. The US Dollar is the currency created in the process of long development and establishment of the unique economy. It is still a universal paying means. And the EU and the Euro are in deep crisis. The failure of them is only a matter of time. Analysts assume that it will happen quite soon.

CURRENCIES

EUR/USD


Last week the Euro appreciated against the Dollar from 1.2890 to 1.3139 with further dip to 1.3057. The technical situation of the Euro is quite ambiguous. On the one hand the breach of the Resistance at 1.3170 might lead to the search of new highs with the limit around 1.3535. In order to have support for that the Euro needs constant discussion about exceptional measures to fight the debt crisis and in the end the report about fast victory over it. Though all this is quite doubtful. Almost unrealistic. On the other hand there is a probability of the downward trend as well. Both variants are more or less equally likely. It makes the market vigilant about some unexpected news, events and the level of risk aversion on the markets.



GBP/USD

Last week the Pound appreciated against the US Dollar from 1.6020 to 1.6178. But reached level couldn’t be held and the British currency dropped to 1.6047. A certain impact of the trend of the pair was caused by the proximity of the weekend that supported the interest to reducing long positions by sellers. If the Pound doesn’t withhold to keep above 1.6030, the currency will be under serious pressure. The support is around 1.5970.