Forex News – 23rd September 2011

EUR

After being heavily beaten by the market EUR/USD may recover some of those losses
throughout the day. The G20 and IMF meetings today are likely to result in comments
from European officials in attempt to cool the markets.
Reassurance will be required as Moody’s downgraded the long-term deposit and senior debt
ratings of eight rated Greek banks by two notches
This will tamper the risk-aversion that is currently dominating the market and may yield a
fair rebound in the majors as US Dollar and japanese yen may weaken as risk-version mode
disperses.
It is important to note that VIX is still showing high volatility risk, which means
that risk-aversion is still in control. Failure of The G20 or IMF to impress the markets
will result in USD-buying again.
As Japan is in holiday and liquidity is thin, exaggerated moves may be seen to any negative
information from the euro-zone.
Resistance is drawn at $1.3586, support at $1.3430.
EURUSD is currently trading at $1.3525

GOLD

Just like EUR/USD the sterling will attempt to recover some of yesterday’s sharp declines.
Close attention will be paid to the mortgage approvals at 08:30GMT as better-than-forecasted
figure will aid the currency to regain its momentum against the US Dollar.
So far GBP/USD has gained +80 pips since the beginning of the session and is currently trading
at $1.5423.

Commentary

GBP/USD is crawling on the yellow-brick road.
After being mercilessly punished by the FX traders the last gains in the pair are
seen as a correction to yesterday’s sales.The RSI reached a low of 14.54 and slowly
creeping back into neutral territory (above 30.0).
The pair may struggle as it must overcome the Fibo resistance levels.
The target for the bullish move is 44MA, currently marked at $1.5668.
Failure to break above the resistance levels, especially $1.5487 (38.20%) may disturb the
recovery.
Hefty sales may be seen only below $1.5323. A bearish flag may be confirmed, opening the
way for declines similar to yesterday’s.

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