Good morning from cool Hamburg and welcome to second last Daily FX Report in this week. After yesterday’s decision of the German constitutional court, today the focus of the investors returned to the awaited latest figures of the U.S. business, which will be released during the day.

But anyways, we wish you a successful new trading day.

Market Review – Fundamental Perspective

Speculations of imminent announcement of further market interventions to weaken the U.S. currencies by the Federal Reserve Chairman Bernanke this afternoon, spurred the establishing of a two-day gain of the AUD and the NZD. In addition, both currencies are benefiting from the positive decision of the German Federal Constitutional Court concerning the legality of the installment of the permanent European Stability Mechanism. The NZD increased its attraction to investors further as the Bank of New Zealand confirmed the retention of the current main interest rate at 2.5 percent yesterday. Furthermore, central bank Governor Bollard implied to keep this rate unchanged until 2013. But economists expressed their concerns that in view of the weak economic outlook of the biggest trading partners of both nations could force the currency strength further. In this case, the export profits or the reimbursement of imports could be affected. Therefore, the AUD enforced against its U.S. counterpart and was at 1.0478, while the NZD advanced to 0.8212 USD from 0.8208 the day before as the currency rose 0.8 percent to the best level since the 23rd of August. Versus the JPY, the AUD strengthened slightly to 81.50 from 81.48 and the NZD climbed to 63.80 JPY from 63.55. According to the Bloomberg Correlation-Weighted Indexes, so far, the NZD showed the strongest performance among the tracked peers in this year and succeeded to add 3.4 percent.

Influenced by the expectations of an expansion of the bond purchase program by the Fed, the USD slid close to a four-month low against the 17 nation’s currency. But a further boosting of the EUR was stopped by Greek’s Prime Minister Samaras second rejection of his spending cut intensions by the coalition partners, which are required for getting additional financial aids. Nevertheless, the EUR rallied 0.1 percent to 129.15 U.S. cents from 129.00 the day before, after reaching briefly the highest level at 129.37 since the 11th of May. The USD dropped 0.1 percent to 77.75 versus the JPY, while the EUR remained stable at 100.42 JPY.

Daily Technical Analysis - Our Focus Currencies for Today

USD/CAD (4 Hours)

After having failed twice to cross the resistance level around 0.9946, the USD has been dropping versus the CAD along a bearish Fibonacci fan since the 23rd of August. Recently, a strong fall was stopped by the support level around 0.9714, where the rate experienced demand and increased to the next hurdle around 0.9767. But a first test remained without avail. Stochastic and depreciating MACD are providing us with bearish signals, why a decline back to the support level is likely.


Intraday Support & Resistance (4 Hours)

Support Levels aroundResistance Levels around

EUR/JPY (4 Hours)

On the 5th of September, the EUR/JPY currency pair has been entering a bullish Andrew’s pitchfork, after having traded in sideways movement along the support level around 98.38 for three weeks. A double touch of the support level around 99.80 boosted the rate up to the resistance level around 100.62 by trading along the lower pitchfork line. There a first attempt failed and the market returned to the pitchfork line. Both indicators are currently stagnating just below their overbought market level, why further gains might be only possible, if the rate succeeds to cross the next hurdle and remains inside its pitchfork. Otherwise losses might be follow.


Support Levels aroundResistance Levels around