The G20 meeting of finance ministers was held in Mexico City over the weekend. The main topic of discussion was the size of the bailout fund needed for Europe. Any increase in the size of the bailout fund would indicate that other members would make more funds available to the IMF. Non-European countries are demanding that more resources be made available to the European Stability Mechanism before requesting additional funding from the IMF. The IMF sounded a warning call on the global economic outlook despite the recent agreement reached over the Greek debt. IMF Managing Director Christine Lagarde said, “The G-20 countries must now strengthen resilience to further shocks that could result from still fragile financial systems, high public and private debt, and higher world oil prices.” Lagarde echoed the sentiment of non-European member countries that additional resources will not be provided to the IMF until the Euro zone countries reassess their bailout fund in March. Germany is set to vote later today on the Greek debt package. Support for the EURUSD is seen at 1.3100 and resistance is seen at 1.3500. The Inside View indicator on HotForex shows that 72% of traders are short on the EURUSD.
Australian Prime Minister Julia Gillard won the party leadership ballot ending the political hopes of former Prime Minister Kevin Rudd. Gillard won the majority of her party votes 71 to 31. Rudd unexpectedly resigned from the post of Foreign Minister last week to challenge Gillard for the leadership position in the Australian Labor Party. Today’s ballot ends the political stalemate in Australia. Rudd said that he will help Gillard win the reelection after his loss. Support for the AUDUSD is seen at 1.0600 and resistance is seen at 1.0810. The Inside View indicator on HotForex shows that 52% of traders are short on the AUDUSD.
With a light economic calendar today, the U.S. will release Pending Home sales data. The data is expected to show a 1.1% rise in the month of January. The housing market is seeing signs of recovery with last week’s data showing decline in inventories. Later this week we will see preliminary estimate of the fourth quarter GDP which is expected to show an expansion of 2.8%. Support for the USA30 is seen at 12,750 and resistance is seen at 13,000.
New Zealand reported the trade balance for January 2012 was a deficit of $199 million. For the month of January 2012 compared to January 2011, exports fell slightly but imports rose strongly mainly due to large aircraft imports. The export of dairy products rose 25% in January 2012 compared to January 2011. Meat exports on the other hand dropped 13%. Exports increased $430 million in the last twelve months and imports rose $637 million. Support for the NZDUSD is seen at 0.8250 and resistance is seen at 0.8450. The Inside View indicator on HotForex shows that 87% of traders are long on the NZDUSD.