Daily FX Report

Good morning from wonderful Hamburg and welcome to our expanded Varengold Bank's Daily FX Report. We're proud to provide you with more important news and information related to the FOREX markets. We wish you a good start into the new trading week and successful trades

Markets review

The EUR started friendly into the new trading week and climbed near to a five week high versus the JPY as speculation the European Union may bail out Greece boosted demand for the 16- nation currency. A Vienna-based newspaper reported that the Finance Ministers of the EU strapped a 55bln euro emergency package for Greece. While the industrial output in the Euro- Zone strengthened with the strongest pace since the statistics began in 1990, Eurostat reported Friday. The industrial production rose 1.7 % from December. Also the USD/JPY opened higher and rose near to a three-week high during the early Tokyo trading hours on concern that the Bank of Japan will take extra monetary-easing measures at its two-day policy meeting starting tomorrow. Japan's Prime Minister said last week that the government needs to stop the currency rising adding signs that the government rather the BoJ will intervene against its own currency. 'The currency is under pressure from growing expectations the Bank of Japan will ramp up quantitative easing to put an end to falling consumer prices', said John Kyriakopouloa, head of currency strategy at National Australia Bank in Sydney.

Moody's Investors Service told today that the U.S. as well as the U.K. moved 'substantially' closer to losing their AAA credit ratings as the cost of servicing their debts rose. Both countries will spend more on debt service this year than any other top-rated country. New Zealand's performance of service index climbed 0.6 points in February the Bank of New Zealand said today.

The USD declined against the CAD to the lowest level since July 2008 on speculation that the higher than expected increase in job creations lead Canada's central bank to raise its key interest rates earlier. Canada's unemployment rate fell to 8.2% while economists expected 8.3%. The NOK fell versus nine of the 16 most important counterparts after Norway's Prime Minister pledged to curb the use of oil revenue in the 2011 budget to ensure interest rates stay low as the economy emerges from recession.

Technical analysis

EUR/JPY (4 Hour)

Since the end of February the EUR/JPY has been trading in a bullish trend-channel and touched its resistance level around the 125.24 at last. It seems that the currency pair may change-over in a short consolidation phase and we maybe have to allow some profit takings. But as long as the trend-channel won't be broken the EUR could be able to attack the 125.24 level again

USD/JPY (4 Hour)

After the USD touched its lowest level on 4th of March the currency pair began to recover. In order of this the USD crossed the 61.8% Fibonacci level around 90.71. But it doesn't seem that the bulls have enough power for further gains. It remains to be seen if the support around 90.62 could be strong enough.

EUR/NOK (Daily)

The EUR/NOK has been trading close to a long-term bearish trend-line but it seems that the bearish movement is stopped around the 8.000 level. It remains to be seen if the bulls could build a basement around the 8.000 level and only the case of breaking through the downward trend-line could push the forecast for an EUR/NOK increase

USD/CAD (1 Hour)

As you can see, the USD/CAD tumbled last Friday near a two-year low around 1.0150 indeed it crossed the bearish trend-line again and stabilized. Now we see that the Bollinger Bands contracts like a bottle neck once again which lead in the youngest history always to further declines. At the moment there could be potential in both directions to the next support or resistance

GBP/USD (12 Minutes)

After the GBP/USD touched its high level last Friday it has been trading between the support at 1.5150 on the downside and the resistance at 1.5200 on the upside. Now it remains to be seen if the MACD indicator could cross its zero level and boost the bears or if the support-level around 1.5150 rather 1.5127 may stop the countermovement.

Pivot Points - Daily FX Support and Resistance Levels

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.