Daily FX Report
Good morning from wonderful Hamburg. We have reached the end of the week and expect an enjoyable weekend. In the wake of Thursday's data, prospects for the Fed to raise lending rates by a quarter at its policy meeting in September dropped to 16% from 40% on Wednesday.
Markets review
The USD fell on Thursday as news of a surprising jump in US weekly jobless claims and belowforecasted economic growth in the second quarter reduced prospects for Federal Reserve interest rate hikes this year. However, the greenback recovered some of its losses as crude oil prices fell more than $2 per barrel to 124.29 and US data showed manufacturing activity in the country's Midwest region rose in July. Today investors are still awaiting more job data. There is no doubt the job data will generate a host of opinions, but the market is likely waiting for a surprise - whether it be on the upside or downside, said a market analyst.
The EUR/USD fell 0.3% to 1.5559, not far from a one-month low of 1.5522 hit earlier this week and well off a record peak of 1.6040 struck last month. Against the JPY, the EUR also fell 0.3% to 167.67. The EUR appears to be peaking out. The ECB hiked rates in July, but inflation still remains a threat. Furthermore, this week indicators did not showed euro zone conditions in a positive light, said an analyst.
The NZD/USD fell to a 10 month low of 0.7272 after the country's largest fund manager said it was suspending activity in one of its funds, adding to worries about New Zealand's financial sector. It is the second fund suspension in NZ this week. The kiwi has taken a hit since the Reserve Bank of New Zealand cut rates last week and the governor signaled this week that the bank had 'plenty of room' for cutting rates further.
Technical analysis
EUR/AUD
Since the beginning of May, the EUR/AUD has been trading in a horizontal trend channel. After touching the support level at 1.6191 for the third time, it increased to the resistance at 1.6586. If in the next few days the market trades down, we will be able to expect a repetitive support at the 1.6191 level.
CHF/JPY
After the constant bullish market in the CHF/JPY, the market started to trade in a horizontal trend channel with a support level at 102.9 and a resistance at 104.75. At the moment, the currency pair is trading close to the support. If the level is strong enough, the CHF will begin an increasing phase.
Pivot Points - Daily FX Support and Resistance Levels
Daily Calendar & Key FX Events
Varengold Bank
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