Daily FX Report

Good morning from Hamburg and welcome to our first Daily FX Report of this week. Today, we will report about the weak EUR and its downward trend against other major counter parts. However, we wish you a good start in a new trading week.

Markets review

The EUR dropped towards its lowest level in eight months versus the USD on speculation that the budget deficit in some European nations will keep policy makers from raising interest rates. The USD climbed to 1.3652. In the meantime, the EUR reached 1.3586, its lowest level since May 2009. Furthermore versus the JPY, the EUR traded near a one year low. The EUR weakened to 121.78. The USD was at 89.37 JPY. The CHF lost for a fourth day against the USD on speculation that U.S. reports this week will show that the trade deficit has shrunk and retail sales rebounded. This increased the demand of assets in the world largest economy. The USD rose to 1.0726 versus the CHF.

The European Central Bank left its benchmark rate at a record low of 1 percent and ECB President Jean-Claude Trichet signaled that there isn't in any rush to raise borrowing costs. The EUR also weakened for a fourth day versus the USD as futures traders raised its bets to the highest level in more than a decade that the EUR will fall against the USD

Technical analysis

EUR/AUD

Since the middle of January, the EUR has been trading in a bullish trend channel against the AUD. Currently, the prices reaches the lower line of the trend channel. Two times before as the EUR touched the lower line, the prices could recover and the currency pair could continue its upward trend. Also a crossing MA Oscillator through the signal line from below may indicate a further increasing trend.

GBP/NZD

Since the last two weeks, the GBP has been trading in a sideways movement versus the NZD. Recently, the currency pair touched its resistance around 2.2956 and rebounded. Now it seems that the prices will continue its downward trend like the last time as the GBP couldn't cross its resistance. Also the MACD may support this with a breakthrough by the signal line from below. Next support level could be around 2.2457

Pivot Points - Daily FX Support and Resistance Levels

Daily Calendar & Key FX Events

Varengold Bank

IMPORTANT NOTIFICATION TO BE READ IN CONJUNCTION WITH THE CONTENTS OF THIS DOCUMENT

This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational urposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.