Daily FX Report

Good morning from rainy Hamburg and welcome to our first Daily FX Report in this week. In sports, Sebastian Vettel of Red Bull Racing Team clinched a third straight Formula One drivers title with a sixth-place finish at today’s rain race Brazilian Grand Prix, during the living legend Michael Schumacher ended his career.

Meanwhile, Euro area finance ministers prepare for their third meeting this month today, on Greece’s rescue. As with the budget talks for the 27-nation European Union, euro finance chiefs have stocked on a plan to steer the country back to fiscal health.

Anyways, we wish you a great start into a new trading week

Markets review

The German Chancellor Angela Merkel told reporters yesterday in Brussels that there is no time to waste to finding a solution for Greece, a plan is being intensively worked on, Merkel said. An agreement, which would release an aid payout of at least 31 billion euros, may raise Greece’s debt target to 124 percent of gross domestic product in 2020 from a previous goal of 120 percent, a Greek official said on the 22nd of November. The cost of reaching the new target from a currently projected trajectory of 129 percent of GDP that year is about 10 billion euros. The main barrier to clearing the loans for Greece is a plan to reduce the interest rates charged by euro area creditors. A cut in interest rates would put them below the cost of funding for some of the 17 euro area countries. The latest news in the Greek economic crisis that opened in 2009 was triggered by the ministers’ decision to extend by two years, to 2016, the deadline for Greece to cut its budget deficit to 2 percent of gross domestic product. The extra time drove its projected debt higher, cause tensions with the so called International Monetary Fund. The IMF has provided about a third of 148.6 billion euros in loans given to Greece since the year 2010.

Meanwhile, the EUR rallied to 106.982 versus the JPY, the highest since April. The EUR currency touched 1.29912 against the USD, the strongest in three weeks versus the dollar, and beginning the week with 1.29690 USD. At the end of last week the JPY fell for a second week against the USD, declining to 82.842 the weakest in more than seven months, but started trading this morning at 82.349 USD.

Technical analysis

EUR/USD (4 Hours)

Since the mid of November and the low around 1.26801, the EUR/USD currency pair traded in a upward movement an breakthrough its former resistance level at 1.27362 and 1.28619. Last Friday the rate stopped its gains at the level of 1.29725 at the upper Bollinger Band. Currently the rate is testing this level, but the MACD and the Bollinger Bands support further wins.

USD/JPY (4 Hours)

Since the 13th of November, the USD/JPY traded in an strong upward trend channel. Five days ago the currency pair touched the level of 82.422 the highest since seven month but slightly falls back. Currently the rate traded along its trend channel. The narrowed Bollinger Bands could be a sign for an strong upward movement, so further gains insider the channel seems possible.

EUR/JPY

Since the 13th of November and the support level around 100.583 the EUR/JPY climbing inside a standard deviation channel. The currency pair also crossed the level of 106.231 and generated further wins. Currently, the pair is trading at the middle channel line, while the Stochastic Oscillator providing us with an overbought market, therefore a drop can be possible.