Gold Gains Before EU Summit
EUR/USD is rising slowly as forex traders bet European leaders would take strong and solid steps this week to solve the region’s debt problems.
Analysts think the downside is limited for now but investors find it difficult to trade while there is uncertainty in the market. Some investors still think the eurozone economy will go into a recession due to instability in Europe and lack of coordination.
For now, all the focus is on the upcoming December 8 ECB policy meeting. Even though analysts expect another cut, they also expect the European Central Bank to provide extra liquidity measures for the banking system and stabilize financial markets. Friday, markets’ focus will shift from ECB to EU summit.
Managing director at Wedbush Morgan, Stephen Massocca said:
“People are expecting something big and bold is going to get proposed so people are sanguine that something good is going to come out of this”.
Forex market participants’ reaction was positive but if the EU summit and ECB fails to deliver significant developments, markets would be very disappointed.
Today we see that the Asian stock markets opened slightly higher on hopes that warnings from S&P rating agency will hasten eurozone chiefs to agree to strengthen the region’s bailout fund (EFSF).
NIKKEI started the day at 8,629.19, previous close was 8,575.16. HANG SENG opened at 19,054.17, previous close was 18,942.23. As some investors are cautious ahead of the EU summit, we see the demand for gold is increasing.
EUR/USD is trading at 1.3413 by the time of typing and for today resistances are located at 1.3480 and 1.3534. Support levels are 1.3345 and 1.3251.
GBP/USD is at 1.5606. Resistance levels are located at 1.5653 and 1.5756. Supports are located at 1.5551 and 1.5504.
USD/CHF is trading at 0.9250 by the time of typing and for today resistances are located at 0.9301 and 0.9347. Support levels are 0.9203 and 0.9105.
AUD/USD is trading at 1.0258. Resistances are located at 1.0290 and 1.0405. Support levels are 1.0175 and 1.0106.
There are some important economic data releases today. Swiss Unemployment data will be released at 06:45 GMT.
French Trade Balance report will be released at 07:45 GMT. Italian Industrial Production figures will be released at 09:00 GMT.
UK Manufacturing and Industrial Production data will be released at 09:30 GMT. German Industrial Production report will be released at 11:00 GMT.
U.S. Crude Oil Inventories figures will be released at 15:00 GMT. RNBZ Rate Statement is at 20:00 GMT.