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S amp P downgrades Spain by two notches to BBB

Article By: ,  Financial Analyst
April 27, 2012 9:00 AM

S&P downgrades Spain by two notches to BBB+. Standard and Poor’s rating agency downgraded Spain to BBB+ with outlook negative. The country is just two notches away from entering ‘junk’ territory. The S&P cut on Spain was mainly caused by bleak growth prospects.
EUR/USD
Range: 1.3158-1.3211
Support: 1.3160
Resistance: 1.3210

Euro-dollar closed in New York at 1.3217, the rate correcting away from a late recovery high of 1.3240, with news of S&P’s downgrading of Spain by two notches to BBB+, dropping the rate down to opening Asian session lows of 1.31766 in very thin trading conditions. The rate recovered, settling within a range of 1.3190/1.3210 and easing down to 1.3185-1.3195 after the BoJ announcement. Bids reported between 1.3175-1.3170, more between 1.3160-1.3150. Resistance seen at 1.3210, with a break to open a move toward 1.3230 ahead of 1.3245-1.3255 with Thursday’s high at 1.32635 lurking behind.

GBP/USD
Range: 1.6154 – 1.6190
Support: 1.6160
Resistance: 1.6190

Cable closed in New York at 1.6179, the rate having retained an underlying buoyant tone, holding just off extended highs at 1.6208 with pullbacks in this session contained by 1.6167. The rate was knocked down to 1.6166 into early Asian dealing as it tracked euro-dollar’s negative reaction to S&P’s late New York session downgrading of Spain (two notches to BBB+). The rate recovered to 1.6191 before stalling, then drifting lower through the balance of the overnight session with early Europe adding further weight as it broke under its overnight low to extend the base to 1.6161. Demand noted around the 1.6160 level, a break of 1.6140 to open a deeper move toward 1.6110-1.6100. Resistance remains in place between 1.6190/1.6200, a break to expose 1.6208, with offers noted into 1.6210.
Gold
Range: 1,650.73 – 1,657.95
Support: 1,646.25
Resistance: 1,660.39

Gold traded another tight range over night of 1,654.75 to 1,658.70. Prices rose for a third straight session on Thursday after the Fed’s statement that it would step in to aid the US economy if necessary, This helped push gold prices up to near 1,660.00, with silver prices also rallying on short-covering and in anticipation of growing industrial demand. Immediate resistance now seen at 1,660.39, followed by the 55-day moving average at 1,682.83, support comes in line at 1,646.25 and 1,634.83.

 

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