Daily FX Report

Good morning from Hamburg. At the end of last week, large US mortgage lenders Fannie Mae and Freddie Mac shocked the equity markets, as well as the Forex market, with higher than expected losses. With upcoming US elections, it is a good opportunity for politicians to use it in their own election campaigns. This is very dangerous for the fight against the inflation. It is still unsure how the interest rates will move in the next month.

Markets review

The USD lost on Friday after the Fed and the US Treasury offered to help prop up the embattled mortgage lenders Fannie Mae and Freddie Mac. Traders covered short positions on Friday when worries about the stability of the two mortgage lending giants were seen as a major threat to financial markets, which would constrain the Fed's ability to raise the interest rates. As a result, the EUR reached a 2 ½ month high of 1.5970 against the USD. The AUD even broke a high from March of 1984, of 0.9717. The GBP tried to attack the magic 2 USD mark, but fell short at 1.9912.

In New Zealand, retail sales fell 1.2% in May, much worse than the forecasted 0.1% increase; however, excluding autos, sales were up 0.7%. The NZD lost 0.7% against the USD with a session low of 0.7560. Against the JPY, the NZD lost a whole 1.12% and closed last week at 80.88.

The Canadian trade surplus widened more than expected in May to 5.54 billion CAD, from a previous level of 5.43 billion CAD, as high energy prices helped lift exports, especially outside the predominant US market. The USD lost 1.1 % against the CAD on Friday, and closed at 1.0159.

Technical analysis

GBP/CAD

The GBP/CAD lost in the first half of the July and was supported at 1.99. That support line was maintained for all of June. If the pair increases, the first resistance level will be at 2.02 and the second at 2.04, 200 pips up. However, the turn is not safe, as the MACD is still aimed downward.

GBP/CHF

The GBP/CHF held itself to the support at 2.02, has been trying since end of June to break through it. The upper resistance line of the side channel at 2.06 was twice, once in May and once in June, and even broken once at the end of May. The MACD does not indicate any fast moves in the near future, so we have to see if support can anticipate a slide.

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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