Daily FX Report

Good morning from wonderful Hamburg and welcome to Varengold Daily FX Report. Yesterday there were huge movements in a lot of currencies against the JPY and in EUR/USD as the ECB let interest rates unchanged. However we wish you a nice weekend and a successful trading session.

Markets review

According to some market players the USD/JPY dropped down because a lot stop-loses from Japanese retail margin traders were triggered shortly after 21:00 GMT. The stop-loss orders started to getting a hit at a time of the day where the market was very thin said a trader. The AUD/JPY reached 87.28 that were higher than its 2-year low of 85.84, which were hit earlier the day. But that is still 6% less this week. The EUR/JPY touched 152.37, near a 13-month low of 150.60, while the NZD/JPY hit its 2-year low of 69.80 before recovering back to 70.97.

Yesterday the investors slammed the EUR and the EUR/USD reached its lowest level in 2008. It happened as ECB President Jean-Claude Trichet highlighted the Euro zone economy downside risks and Eurogroup Chairman Juncker added that the single currency is overvalued despite its recent fall. The ECB now forecasts growth in the euro zone for 2008 at between 1.1 and 1.7 %. For 2009 the staff forecast a growth between 0.6 and 1.8 %. Adding to that the USD gains versus the EUR were comments by the International Monetary Fund that the EUR was on the strong side despite some weakning and the greenback was now closer to its medium-term equilibrium level. The EUR/USD is down 1.3 % to 1.4306 after touching the 1.4211 level yesterday.

Technical analysis

EUR/CAD

Since the middle of March, the EUR/CAD has been trading in a horizontal trend channel with a support at 1.5280 and two resistance lines at 1.62 and 1.5655. After the EUR touched the 1.62 resistance line the fifth time, the currency rebounded and decreased to the support level at 1.528. This movement might be similar like in April and May. If the support line is strong enough we will expect a recovery phase.

AUD/USD

Since the middle of July, the AUD/USD has been trading in a strong bearish trend channel. After the currency touched the second time the upper trend line the market continued the downward trend phase. This might be a sign for further bearish moves.

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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