Daily FX Report

Good morning from wonderful Hamburg. Currently the market's focal point is how aggressively the ECB and BoE will cut interest rates on Thursday. However we hope you will make successful trades in this exiting market environment.

Markets review

The USD/JPY is still trading below the 94.00 level, which is near a five week low. Analysts expect that economic data will probably show U.S. companies accelerated job cuts and a shrinking in services deepened as the world's largest economy battles with a recession. Fed Chairman Ben Bernanke said on Monday 'The U.S. central bank had alternative tools to help the economy as interest rate cuts' and he said further 'cuts in rates beneath the current 1 % level were feasible.' The EUR/USD is a little down and trades currently under the 1.27 level after the day opening at 1.2711. Overall trading is subdued because investors await interest rate decisions by the ECB, the BoE and the RBNZ on Thursday. The ECB is seen to cut the rates by at least 50 bps, from 3.25 %, while investors bet the BoE will slash rates by 100 bps from the current 3.0 % level. The RBNZ is forecasted to cut interest rates by a record of 1.5 % point while the RBA decided to cut rates about 100 bps yesterday. The NZD/USD is back to its opening from yesterday after falling to a low of 0.5293. The AUD/USD rose 0.94 % and trades currently nearly flat at 0.6430.

Worries about a recession pushed British consumer confidence to its lowest level since four years. However the consumers were more inclined to spend money but this positive news disappeared in a record fall in job appointments and wages. The GBP/USD barely reacted and closed the session with a 0.13 % gain

Technical analysis

AUD/JPY

Since November, the AUD/JPY has been trading under a bearish trend line. After breaking through the 64.00 resistance level, the market pulled back and touched both lines several times. If the market breaks through the bearish trend line, it could rise towards the 64.00 level

USD/CAD

Since the end of September, the USD/CAD has been trading along the upper level of a Fibonacci Fan. As you can see the market is following accurately the bullish Fibonacci Fan. If the market doesn't cross the Fibonacci lines, it could rise further towards the clear resistance at 1.3 level

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

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