IBTimes

The euro dropped against most of its major counterparts during last week's trading session. The euro began last week with a rising trend, yet finished it with a 70 pip loss against the U.S. dollar and a 120 pips loss against the Japanese yen.

The U.S. dollar finished a rather volatile trading week with modest gains against most of the major currencies. The dollar began last week's trading down about 150 pips against the euro, but eventually closed the session with a 70 pip gain. A similar trend took place against the British pound.

Forex traders were welcomed this week by a market filled with noise but little new information to provide any guidance. The Australian election was the main event over the weekend and the result produced a hung parliament since neither party gained the critical number of 76 seats for a majority. The Labour party took 72 seats and the coalition 70. The vast majority of pundits are harping on the uncertainly in Australia, should the talking heads continue, look for the AUD and risk-correlated trad...

After four days in which the euro and British pound had dominated the market, the trend markedly reversed by last Thursday. Several negative economic reports from the U.S. have added to concerns regarding the global economic recovery, boosting risk aversion.

The deficiency of top tier data has caused most currencies to remain little changed since the market closed on Friday, with exception to all Aussie related pairs. The Australian Federal election was held this weekend and presently the vote counting continues, however all estimates point to something which hasn't occurred since World War II; a hung parliament.

USDJPY continues to move sideways in a range between 84.72 and 86.37. Support is at 84.72, a breakdown below this level could trigger another fall to 82.00 area.

EURUSD broke below 1.2734 support last week, suggesting that a cycle top had been formed at 1.2921 already and the downtrend from 1.3333 had resumed.

GBPUSD's downward move extended to as low as 1.5464. As long as 1.5712 key resistance holds, downtrend from 1.5997 is expected to continue and next target would be at 1.5300-1.5400 area.

AUDUSD broke below 0.8858 key support, suggesting that a cycle top had been formed at 0.9079 level on 4-hour chart.

USDCAD continues its upward movement from 1.0247 and the rise extended to as high as 1.0513 last week.

USDCHF stays below a downtrend line from 1.0624 to 1.0464 and remains in downtrend. As long as the trend line resistance holds, downtrend is expected to continue and next target would be at 1.0200 area.

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The euro stayed under broad pressure on Monday, hurt by concerns over the euro zone economy which have seen short positions in the single currency extended. The Australian dollar was dented by political uncertainty after an inconclusive general election.

Euro-Zone's PMI Composite index dropped in the advanced august reading to reach 56.1, compared with the previous 56.7 and the expected 56.3.

On Friday Pound/Dollar decreased, continuing the downward impulse from Thursday, in converse with the positive Interbank sentiment at nearly +12%. The Cable depreciated from 1.5594 to 1.5470 on Friday, closing the week at 1.5526. Today the British currency is making recovery efforts. On the 1 hour chart trading is within range, while on the 3 hour chart the new downward channel has calmed down. First resistance is today's peak at 1.5618. Break above it should extend the bullish movement further ...

The descending triangle formation is considered to be a bearish trend continuation pattern, indicating that the preceding downward trend movement is headed lower upon completion. By this descending triangle pattern it is assumed that the demand is less than the supply.

AUDUSD closed as a Doji on weekly suggesting a potential reversal. On the daily charts the current fall from 0.9221 to 0.8840 move looks like a correction to the rise from 0.8316 to 0.9221. As weekly closed as Doji and the price bounced off significant support level at 0.8855 and daily closing on Friday as a Hammer suggests that the price could move higher before it makes any further downward extension.

Germany's PMI Services index rose in the advanced reading for August to 58.5, compared with the previous 56.5 and the expected 56.3.

Germany PMI Manufacturing index dropped in the advanced August reading, reaching 58.2, compared with the previous 61.2 and the expected 60.5.

Friday's breach of 1.234 support to 1.2664 confirms decline from 1.3334 has once again resumed and outlook remains mildly bearish for marginal weakness but near term loss of momentum should prevent steep fall today and reckon 1.2630/40 would contain weakness.On the upside, above 1.2772 signals tempo...