Daily FX Report
Good morning from Hamburg, and welcome to Varengold Daily FX Report. This year, summer has been keeping us waiting. Unfortunately, the weather got worse this morning. The only consolation we can have is the approach of the weekend.
Markets review
Market analysts are expecting the Fed to increase its rate later this year. This delay in the rate hike would be due to weakness in the US economy. This sentiment came just after yesterday's publication of the Housing data in US, which reached a 17 year low in May. Only a possible recession situation would conduct the Fed to act early this year. Moreover, the financial sector seems to be delicate these days. This situation led the USD to fall against a basket of currencies.
The USD fell against the EUR during the overnight session. The EUR/USD rose by 0.3% to 1.5574. It recovered its losses on Wednesday when the currency pair hit 1.5560.
The CHF went up against the USD and the JPY and reached a 17 year high. The main reason of these gains is that the Swiss National Bank is expected to raise its interest rate. The USD/CHF fell by 0.3% and is currently being traded at 1.0330. In addition, the CHF/JPY reached its highest level since February 1991 at 104.24.
After hitting 0.9475 and a 1 week high yesterday, the USD/AUD changed slightly and reached a level of 0.9475. Moreover, the AUD/JPY slipped to 101.86 from a 7 month high of 102.16 hit on Wednesday.
The GBP/USD rose slightly by 0.17% on Wednesday after UK Finance Minister presented a BoE plan to reorganize, in order to boost the financial stability.
Technical analysis
EUR/JPY
In spite of short term negative impulses, the EUR/JPY has been trading in an upward long term trend channel since the middle of March. The short down period in April and the breakout of the trend channel in June didn't start a trend reversal and the currency rebounded from the support at 161.63. This development might be a sign for a trend continuation.
EUR/AUD
Between April and the end of May, we had a strong bearish market in the EUR/AUD. At the beginning of June the currency pair crossed the upper line of the down trend channel and started an upward movement, which stopped at the resistance at 1.6523. If the EUR breaks through this level, we might be able to expect a further long potential.
Pivot Points - Daily FX Support and Resistance Levels
Daily Calendar & Key FX Events
Varengold Bank
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