Daily FX Report

Good morning from wonderful Hamburg and welcome to the Varengold Daily FX Report. The BOJ will hold its interest rates at 0.50 % after a meeting this week. However we wish you good luck for today and a nice weekend.

Markets review

US Fed Chairman Bernanke made no comment regarding the prospect of interest rates or the US economy in the opening minutes at a central bank meeting in Wyoming. He is due to present a more detailed speech today at 14:00 GMT at the Kansas City Fed's conference, where he is expected to touch on financial market instability. Some traders are hesitant to open new positions before hearing words from Bernanke on the credit market and financial situation. The EUR/USD rose to a high of 1.4886 as the dollar index suffered its biggest one-day drop in five months with a chart support at 75.90, and crude oil edged up and held at over $121 a barrel. Those gains gave an increase to the AUD and NZD. Gold dipped early while the USD/JPY recovered to 108.87 from a low of 108.13.

The government will try to find out a way to support the declining economy next week, said Japan's economic minister Kaoru Yosano, and added that the government is in doubt whether to increase its budget to carry out the measure, which some fear could lead to more debt issuance. Financial Minister Ibuki stated that he does not anticipate issuing any debt to support the expected stimulus package.

Technical analysis

USD/JPY

Since the beginning of June, the USD/JPY has been trading in a horizontal channel with a resistance at 108.49 and a support level at 104. After breaking through the resistance, the market made a semicircle move and recovered back. Should the market entry the trend channel we could expect a short term potential for decreases.

NZD/JPY

Since the end of last month, the NZDJPY has traded in a bearish trend channel. After breaking through the upper trend line, the market touched the 79 level from the beginning of August. If the market doesn't break trough the new resistance it could continue its downward movement.

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

IMPORTANT NOTIFICATION TO BE READ IN CONJUNCTION WITH THE CONTENTS OF THIS DOCUMENT

This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational urposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.