Daily FX Report

Good morning from wonderful Hamburg. The likelihood that the US financial bailout bill would pass the Congress by 30th Sep is now seen at 76.5 %. On Tuesday the estimates were still at 65 %, but the high in the week was at 95 %. The recent survey shows that there is still some scepticism about a rapid enactment of the bill

Markets review

The USD edged up for a second day on Wednesday, supported by view that the credit crisis was not just a problem for the US economy and its currency, but would enlarge to the rest of the world. However a report that economists expect a drop in new home sales and a cut in interest rates next month pushed the USD down to 1.4718 in the early trading session. The USD-Index, which measures the USD value against six currencies, decreased 0.1 % as President Bush said that the market is not functional, major sectors are at risk and could send the US into recession.

The USD/JPY fell to 105.85 despite Japanese data showing the country's trade balance changed into a deficit in August for the first time since January because exports slowed and import cost rose. The data added fears that the world's No. 2 economy is running into a recession and the financial market could tumble.

Canada's government must control the rate of spending growth to keep its expenditure targets said the Finance Minister on Wednesday. Additionally, the Prime Minister said that the housing market in Canada is in good shape and there is no risk that it will collapse. The USD/CAD reacted quite unimpressed to these statements and ended the day with a small profit of 0.1 %.

Technical analysis

EUR/CHF

On a short-term view, the EUR/CHF is trading in an upward trend channel. The new trend originated, as the currency broke through the bottom of the horizontal channel on Monday. The zigzag movement inside the channel can be exploited, if the support line of the trend duct is strong enough

EUR/USD

After the EUR/USD dropped to 1.3875 in the middle of September, the currency pair recovered in a rising trend channel. Quite recently the EUR left the formation and tested the resistance at 1.48. In the last trading days the momentum decreased from a high to a negative value, a sign of a slowing of the upward trend. We should pay attention, if the oscillator turns into a positive area.

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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