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Daily Forex Technicals | Written by Varengold Bank | Feb 26 13 08:03 GMT

Daily FX Report

Good morning snowy from Hamburg and welcome to our Daily FX Report.

In Italy after first exit polls from the election in Italy were greeted with relief in Brussels and Berlin yesterday the EUR/USD and the stock markets traded upwards and the interest rates on Italian sovereign bonds dropped. Silvio Berlusconi had fallen short of his goal. His opposite, it seemed, had won the election the candidate Pier Luigi Bersani. But short time later, the election will be exciting again.

Anyways, we wish you a prosperous trading day

Markets review

Actual results showed that Berlusconi had won a majority in the Senate, the second house of parliament. Meanwhile, the ruthless former comedian Beppe Grillo had won 24 percent in the Senate, according to the polls. As a result, Berlusconi and Grillo together have a blocking majority. Without their permission, new laws cannot be passed. They may not like each other, but they are both euro opponent. Both have vowed resistance to the rules and dictates from Berlin. Indeed, they stand opposed to everything that a Bersani government seeks to and must accomplish. Already, there are voices mostly from the Bersani camp speaking of new elections. Post election Italy, they say, is ungovernable. At the very least, it is likely to take some time before a government can be assembled, if it can be done at all. The results from the election on Sunday and Monday present the worst scenario that was possible. Europe is bound to suffer. An ill Italy the third largest economy in the euro zone, with a weak government is bound to once again become a toy for the financial markets. Italians massive, debt will continue to grow, as will risk premiums on Italian bonds and we will see new holes in the country's budget. In parliament, the center left was able to secure a little majority. The lead over Berlusconi's alliance is not huge, but Italian law assures the winner a minimum of 340 seats, representing a 54 percent majority.

Meanwhile, the EUR fell 1 percent to 1.30623 USD, after gaining as much as 1 percent. It touched the 1.30482 USD, the lowest since the 10th of January. The JPY won 1.7 percent to 91.823 per USD after touching 90.882, the strongest since the 31st of January. The JPY currency added 2.7 percent to 119.932 per EUR after gaining as much as 3.6 percent.

Technical analysis

EUR/USD (4 Hours)

From its top around 1.35813 beginning of February, the EUR has been weakening against the USD below a bearish Fibonacci fan. Yesterday the rate rebounding at its resistance level around 1.32876 and moved out of its fan. Recently the currency pair is testing its support level around 1.30587. The MACD provides us with a bearish signal, so we might see further losses

Support Levels around Resistance Levels around
1.30587 1.35813
N/A 1.34228
N/A 1.32876

AUD/CAD (1 Hour)

The chart shows a long term bullish trend of the AUD versus the CAD, which started at the mid of February. After the rate dropped by the resistance level around 1.05628 for the fourth time, we see yesterday the winning streak started again at the support level around 1.05090. The Stochastic Oscillator assumes an oversold market, so we might see further wins inside the channel

Support Levels around Resistance Levels around
1.05090
1.05628
1.04262 N/A
N/A N/A

XAU/USD (4 Hours)

Since the beginning of February, Gold has been depreciating versus the USD below a bearish trend channel. The fall has been stopped at the support level around 1561.96 and a recovery to the upper trend line. The rate is currently on the way to its resistance level around 1609.41, the MACD support us with further gains

Support Levels around Resistance Levels around
1561.96
1678.05
N/A 1609.41
N/A N/A
 

About the Author

Varengold Bank

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This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational urposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.

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