Asian markets advance supported by China; Euro and Pound, consolidating ~ Forex Special

Tuesday, July 20, 2010

Asian markets advance supported by China; Euro and Pound, consolidating

Forex Special - Asian markets have mostly traded on bid tone on Tuesday after a positive session in Wall Street with Chinese markets leading gains as confidence increased on belief that Chinese government will avoid further tightening measures. In FX markets, major currencies remained consolidating.

Chinese Shangai Composite Index rose 1.5%, with Hong Kong Hang Seng Index 1.4% up and Australian S&P Index 1.1% higher. Japanese Nikkei Index has been the exception today, with a 0.6% drop on the first trading day of the week, as it remained closed for national holiday on Monday.

The technological sector has driven Tokyo Index to negative levels, with Tokyo Electron dropping 1.6% and Sony 2.1% down, following downbeat corporate earnings by IBM and Texas Instruments. The automotive sector also weak, with Toyota and Nissan, both dropping almost 2.0% have failed to offset losses.

Major currencies consolidating

EUR/USD rally from 1.2145 area on late June, reached a 2-month high at 1.3000 last Friday, and the Euro, unable to break the mentioned level, has remained trading sideways between 1.2865 and 1.3000 during the current week so far.

GBP/USD rallied last week from 1.4950 area to a fresh 3-month high at 1.5470 on Jul 15, and the pair remained pulling back on Friday and Monday, to find support at 1.5200, and pick up during Asian session, reaching 1.5285 high.

USD/JPY decline from 89.15 high on Jul 14, found support at 86.25, 8-month low last Friday, and the pair attempted to pick up on Monday, to stall below 87.20 resistance area, which has been tested twice, with no success, so far this week.