Although the US Debt Plan has been passed by the House of Representatives, the markets still await the reaction of rating agencies
City Index August 2, 2011 8:56 PM
<p>A lthough the US Debt Plan has been passed by the House of Representatives, the markets still await the reaction of rating agencies, which will […]</p>
lthough the US Debt Plan has been passed by the House of Representatives, the markets still await the reaction of rating agencies, which will continue to cause nervousness within the markets.
Sterling closed in New York at 1.6295, off lows of 1.6238 after the rate had been pressed down from earlier European recovery highs of 1.6467. The rate consolidated the risk aversion pullback, with trade through Asia contained within a tight 1.6291-1.6325 range. Euro-sterling had managed to correct back from Monday’s highs of 0.8805 to 0.8723 in New York, with the rate contained in Asia by 0.8723-0.8751. Cable offers seen placed between 1.6325-1.6330, a break to open a move towards 1.6350-1.6360 ahead of 1.6390-1.6300 and the key level at 1.6420. Support seen at 1.6300, ahead of 1.6285-1.6280 and 1.6260-1.6250.
Euro-dollar closed in New York at 1.4251, off pullback lows of 1.4185 after the rate was pressed back from European highs of 1.4454. The rate extended its recovery to 1.4283 into early Asian dealing. The move up was aided by early demand for euro-yen out of Tokyo. The House of Representatives has passed the US Debt plan, it now goes to the Senate but is expected to be nodded through. However, the news failed to prompt any major excitement in Asia. Euro-dollar eased off highs, taking the rate to a session low of 1.4230. Support remains at the overnight low at 1.4230, with interest stretching to 1.4220 with stops below. A break exposes 1.4200 ahead of 1.4185/80. Resistance at 1.4280-1.4290 and then at 1.4320.
Gold had a rollercoaster day on Monday, trading as low as 1,605.90 in early Asia before rallying to highs of 1,632.00 after the weakest US ISM data for two years. Prices then fell back into the close to 1,619.50. Far East markets have led a small rally back to 1,624.70 as safe haven demand continues to support the metal. Silver traded as high as 40.05 yesterday, before closing at 39.30 but has risen in Asia to 39.70. Gold resistance is now at 1,630 and 1,637, with support at 1,608.00 and then 1,606.00. Silver resistance at 40.00 and 40.41, with support at 39.08 and 38.92.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.