Daily FX Report

Good morning from wonderful Hamburg. The financial crisis has reached the economy of Germany after some of the German car builders partly had to stop their production.

Markets review

The USD/JPY seems to be resilient for a further Nikkei tumble, some traders say. After a 5% fall in Nikkei index there was some expectations about a pressure on cross/JPY pairs. But overall the FX move is as traders said, the market waits for a coordinated policy response to the worsening global crisis. The USD/JPY is down 0.2% on the day, hitting a session low of 101.07 before recovering to 101.30. The EUR/JPY falls to 137.75, but remains over its session low of 137.19. The AUD/JPY holds also off its lows at 72.05, down around 1% on the day.

The EUR/USD seems to fall further on the spreading financial instability in Europe. But yesterday the pair rose to a high of 1.3739 after touching a day-low at 1.3479 with a 0.88% rise on the day. The IMF chief Strauss-Kahn hold that there was room for lower interest rates in Europe as pressure increases for a coordinate global response to the worsening financial crisis. 'Interest rates are one point and certainly there will be room now for Europeans to have lower interest rates.' he says.

An economic assessment from Fed Chairman Bernanke is widely seen as laying the groundwork for a deep interest rate cut. The decision is possible before the meeting at the end of this month. 'The Fed will need to consider whether the current stance of policy remains' he told the National Association for Business Economics.

Technical analysis

GBP/JPY

Since the end of July the GBP/JPY has traded in bearish Fibonacci lines. After cutting the upper trend line the pair touched the 197.55 resistance level and recovered to its downward phase. If the market doesn't break through the upper Fibonacci trend line we could assume further falling movements

USD/JPY

For the last three months the USD/JPY has shown a strong bearish phase with a break through the 108.49 and 103.69 support level. If the currency pair doesn't show a rebound we could expect further bearish movements with a support level at 100.00

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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