The European Union summit will test the euro rally

By the influence of the sex-abuse Europe good, to the debt crisis of the market gradually optimistic outlook, the euro dollars last week after a sharp jump empty high going higher, and push pounds, high returns $a stronger currency reversal. Although Greek debt crisis seemingly enchanting sight in spring time, but in fact is still a reef, this week the European Union summit decided to European stability mechanism (ESM) can expand the scale, and the euro is influenced.

Last week, the euro against the dollar that grabs an eye movements, beginning from the euro zone finance ministers' meeting or achieved good effect of aid agreement expected, and the euro jump empty high open, and then the Greek and the private sector debt swaps, European economic data better than expected, and many other profits element, make the euro, try, try, try again on Friday nearly 12 weeks touch high. Pounds ups and downs is bigger, because the market worry the central bank continues to release liquidity, pounds for the dollar lower to 1.5650 near the beginning fast for firmer, second half pounds to follow a new euro's, and eventually recovered the formation of all of the early fall. At the same time, the Japanese yen weak trend, on the one hand, the central bank, expand the scale of quantitative loose accident is in effect; On the other hand, investors risk preference mood to warm up, and also a hedge against currency yen market popularity, against the yen hit a new $7 months high.

The debt crisis made new progress of the euro does not mean that a bright prospects. Before the deadline, the G20 summit held in Mexico City in did not confirm whether to IMF capital increase, if the meeting can't issue a rigid promise, will be to European series the bounce of the currency bring short-term pressure. This week the European Union summit also will decide whether to further expand the scale of ESM, and the biggest against the voice came from Germany, once the European Union on this issue in stagnation, will also crack down on euro calls morale. Even more important, the euro to continue recent rises momentum, data released this week, especially European economic data will be further proof that the economy is improving, such as the euro zone, Germany 2 month consumer confidence and the euro zone economic data on January unemployment, etc.

Overall, we think, this week the currency is rising trend will continue, but buying kinetic energy or with the approach of the major risk events will be weakened, so don't rule out in weeks appear profit taking short line down the currency risk dish phenomenon.

Technology perspective, the euro exchange rate against the dollar of average daily line 5 rapid rise, 60 average daily line head upward turn reason, KD index low gold after fork went up gradually. Despite recent powered the euro, but short line soon encounter the near 1.3510 technology resistance, this one is from May 2011 38.2% of the biggest fall since a retreat. To break through the only effective a, the exchange rate will get more rise kinetic energy, then resistance in 1.3615, 1.37 level. An important support in the previous high below near 1.3320, this a break to support. Keep steady on its, means that the euro since mid-february rising prices launched will last.

The pound last week after first or $Yang, weeks K line form apparent could, day figure technical indicators suggest that, short-term average daily line crisscross winding, lack of direction, but 60 average daily line up slowly began to look up, KD index gold again fork, forming a double bottom. Short line will have the opportunity to exchange rate is expected to impact technology resistance 1.5930, but without fundamental cooperate, there are some who will break through the difficulty. Only the move successfully and, just visible to 1.60 integer pass, higher resistance in the 1.6080 region. Below 1.5780 to the dollar constitute a preliminary support, the strong support in the lower interval near 1.5645.

Against the Japanese yen last week out of $independent market, the third consecutive weeks rises considerably, week closing at 81 levels above, is largely attributed to basic face the yen the negative effects of popularity. Th figure technology index showed that average daily line 5 go quickly high, average daily line system is bull is arranged, RSI index concussion rise, into the super buy area. Dollar short line may test is expected to 81.45 resistance, effectively break through this bit, dollars against the yen will have the opportunity to further near rose to 82.25, and higher resistance in the 83 level. But so far, as the dollar against the Japanese yen of persistent rise considerably, short term profit taking pressure also will increase. 5 average daily line will exchange rate form the preliminary support, the important support in near 79.50.