Daily FX Report

Good morning from wonderful Hamburg and welcome to the Varengold Daily FX Report. It is Friday, and the last chance to generate profits for the week. Yesterday, we had the BoE rate decision, but the interest rates are unchanged at 5.00 %. The Varengold Orderdesk team wishes you a nice weekend.

Markets review

The USD steadied against the EUR in the Asian trading session, a day after sliding on renewed concerns over the US financial sector as shares and bonds of the country's two big mortgage finance companies tumbled on capitalisation fears. On expectations that the ECB is more likely to raise interest rates of fight inflation than to cut them later in the year, the EUR stayed within a sight of a record high against the low-yielding JPY. The EUR was only little changed in the Asian session, at 1.5790. The EUR/JPY was down about 0.1 % to 168.85. This is still not far away from an all-time high of 169.47. The USD/JPY slipped 0.2 % to 106.90.

The CAD closed at its highest level in more than two weeks yesterday. The USD/CAD closed at 1.0091, after starting at 1.0111.

The GBP dipped in the morning session, as the UK Telegraph reported that the BoE's next move will be a rate cut. The GBP/USD fell 0.1% to 1.9757, and the EUR/GBP edged up to the day's high, near 0.7990. Many market players are betting that interest rates may rise this year, because of rising inflationary pressure after the central bank held the interest rates stable and unchanged at 5.0% on Thursday. However, here has been little sign so far that inflation pressures are driving wages markedly higher and the growing risk of a recession has prompted some strategist to see an eventual rate cut.

Technical analysis

EUR/AUD

After a long term bullish trend, the EUR/AUD started a short term recovery phase in June. The market rebounded again on its resistance around 1.6526. The past few weeks have established a sidewards trading channel with a support at 1.6250. If the currency clearly crosses one of the channel limits, there will be a beginning of a new trend phase

EUR/CAD

In EUR/CAD over the last few days, we had a very strong bearish tend. The market lost about 130 pips in 4 days. Yesterday afternoon, the market started a recovery and developed a short term bullish trend. If the currency pair breaks through the resistance at 1.5941 this will be a sign for a continuation of the bullish trend

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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