Daily FX Report
Good morning from wonderful Hamburg. We have reached the end of the week and it appears, to be also an exiting trading day. In these days every message or statement regarding the bailout bill or US economic situation triggers a large movement in the financial markets.
Markets review
On Thursday the USD edged higher against the EUR and the JPY in volatile trading, driven by expectations that the US government was nearing a deal on the $700 billion bailout package. But in the early Friday session the USD fell against these currencies after a White House meeting with congressional officials was unable to produce an agreement over the bank rescue plan. After the convention, they said an agreement could last until the weekend. This sent US stock futures down sharply in Asia trading and hurts the Greenback.
Because of high oil and food prices, Japan's core annual consumer inflation stayed at a high of 2.4 % in August. The data are driving concerns about rising costs of living that weight on personal consumption in an economy. But with decreasing crude oil prices after the peak in July, many economists say inflation will subside and the BoJ could keep rates unchanged at 0.5 % for another year. The JPY rose 0.6 % versus the USD to 105.90 in the early trading session.
New Zealand falls into recession for the first time in more than a decade. The GDP deflator falls 0.2 % in Q2, following a 0.3 % decrease in Q1. But economist in a survey had forecasted a 0.5 % contraction and therefore the NZD/USD jumped 1.0 % to 0.6878. The market expects that the RBNZ will cut the interest rate this year because of a weak housing sector and slower consumer demand.
Technical analysis
USD/CAD
At the beginning of this week, the USD/CAD broke through the rectangle and decreased. The subsequent week routine shows a horizontal trading channel with a support level at 1.0308 and a resistance at 1.0397. The further development depends on whether the currency could rebound a fifth time at the support level and which trend barrier it will cross first.
USD/JPY
Since March, the USD/JPY has been trading in an upward trend duct. But in September the USD left the channel and crossed the Fibonacci level at 105.16. Afterwards the currency touched once the 50.0 % line and rebounded back above the 61.8 % level. If the impulse is strong enough, the pair could come back in the old upward trend channel
Pivot Points - Daily FX Support and Resistance Levels
Daily Calendar & Key FX Events
Varengold Bank
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