Daily FX Report

Good morning from wonderful Hamburg. After the agreement about the $700 bln bailout plan, the market participants are looking for the international financial reaction. The US Government hopes for a better economic cycle. Nevertheless we wish you good luck and a nice start in this new week

Markets review

According to some traders the rise in USD could partly be due to the $8.5 bln investment of the Bank of Tokyo-Mitsubishi UFJ at Morgan Stanley. The BOJ Deputy Governor says the central bank should be attentive to downside risks for the nation's economic growth. He adds that the possibility of a deep adjustment in Japan's economy was small. The USD/JPY is up 0.6 % at 106.66 after touching the 106.97 level. The August retail sales of Japan rose 0.7 % yr/yr with a 0.2 % increase median forecast. According to CFTC, the Currency speculators trim their long positions on USD in the week to September 23rd. The Value of USD's net long position falls to $11.77 bln from 13.34 bln in the previous week. However the AIG is trying to sell above to 15 businesses to repay its $85 bln government loan. They met on Sunday in New York to discuss possible sales.

Chairman of Morgan Stanley Asia, Stephen Roach, says he gives the US bailout plan a grade of 'B-minus' due to its complexity. 'There are a lot of pieces to this puzzle and it is a sub-optimal response from the fiscal authorities. It adds pressure for monetary policy to add some firepower.' He thinks the Fed could cut rates by 50 basis points. The EUR/USD is back at less than 1.45 after touching the one-month high at 1.48.

Technical analysis

GBP/AUD

As written before the GBP/AUD rose after its break trough the 2.2 resistance level. After touching the peak in the middle of September the market recovered and is trading now close to the 2.2 support level. If the market breaks trough this level we might expect a downward trend phase

GBP/USD

Since last Monday the GBP/USD has been trading in two horizontal trend channels with a resistance level at 1.8631 and a support at 1.8455 and 1.83. After trading close to the 1.8455 level the market breaks the 1.83 support line in a combination with a gap. This could be a signal for bearish movements.

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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