The latest budget package
City Index November 14, 2011 9:23 PM
<p>The latest budget package that was passed on Saturday, aimed at rescuing Italy from its financial crisis, and Mario Monti accepting the offer on Sunday […]</p>
The latest budget package that was passed on Saturday, aimed at rescuing Italy from its financial crisis, and Mario Monti accepting the offer on Sunday from Italian President Napolitano to form a new government, has given the euro a modest jolt by breaking 1.3800.
Euro-dollar closed Friday’s holiday thinned market in New York at 1.374, just off its late recovery high of 1.375. The resignation of Italian PM Berlusconi and the swift appointment of Mario Monti over the weekend sparked fresh risk appetite into early Asian trade, with euro-dollar tripping stops through 1.3790 to take the rate on to an early high of 1.3815. The rate reversed into the Tokyo open, stepping its way down to an eventual pullback low of 1.3741 ahead of the European open. The main focus clearly remains on Italy and Greece developments. Resistance appears at 1.3815-1.3820, followed by 1.3841 and then 1.3924. Support now comes in line at 1.3700, 1.3639 and 1.3619.
Cable closed Friday at 1.6060, off late traded highs of 1.6090, as the markets took Greek and Italian political developments as positive. The rate consolidated Friday’s gains through the Asian session, able to stretch the topside to 1.6095 before settling for most of the overnight session between 1.6050-1.6090 before easing to 1.6041 ahead of the European open with an ongoing recovery tone. Resistance is seen at 1.6082, a break to open a retest on the overnight high at 1.6095, forwarded by 1.6130 and key resistance seen at 1.6167. Support remains into the overnight low at 1.6041, with stronger interest seen around 1.6020. Below here, the rate can ease towards 1.6000, with stronger support seen at 1.5985-1.5980.
Gold prices rallied higher on Friday on the back of a weaker dollar, buoyant equity markets and safe-haven demand as investors continue to be concerned over Greece and Italy despite changes of premierships and reformation of governments. The metal opened on Friday at 1,758.40, with an early dip to 1,745.80 before beginning a prolonged rally at 1,790 in New York closing out the week at 1,788.35. Asian markets have posted further gains this morning, with the metal hitting highs of 1,796.30 before easing back to 1,791. Gold support is seen at 1,761 and 1,745.80, with resistance at 1,800 and 1,816.70.
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