Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from beautiful Hamburg and welcome to our latest Daily FX Report. Yesterday, the unexpected star of the World Cup finals, James Rodriguez, has signed for Real Madrid for a reported £63m. He follows Toni Kroos who joined for a bargain £20m. Rodriguez passed a medical in Madrid on Tuesday and has agreed to a six-year deal with the club. The fee makes him the fourth most expensive transfer off all time after Real`s £86m for Bale and £80m for Cristiano Ronaldo. At the World Cup finals, Rodriguez scored six goals to finish as the leading scorer of the tournament.
Anyway, we wish you a successful trading day!
Market Review – Fundamental Perspective
Due to a divergence in borrowing costs and monetary policies between Europe and the U.S., the USD reported additional wins versus the EUR and advanced to the highest in eight months. The USD appreciated 0.4 percent to 1.3466 per EUR. It also appreciated versus the JPY by 0.1 percent to 101.46 JPY per USD. The EUR depreciated versus the JPY by 0.4 perccent and is now traded at 136.63 yen. The EUR alos declined against the majority of its peers and a quick improvement is not in sight as analysts expect that consumer sentiment remains subdued. The AUD rose to the most since November against the EUR after the central bank chief said he was content with the monetary policy. Overall, the AUD was able to record gains versus most of its 16 major peers due to positive news regarding Australia`s monetary policy. Annual price gains were in the top half of the central bank`s target range. The AUD rose 0.6 percent to 1.4335 AUD per EUR and even touched 1.4312, which marked the strongest level since November 12. It gained 0.2 percent to 93.94 U.S. cents after dropping 0.2 percent the day before. The positive development of the AUD makes it the best performer among 10 developed-nation currencies tracked by Bloomber Correlation Weighted Indexes. The same Indexes also indicate that the NZD has lost 0.3 percent along with the EUR. Meanwhile the USD was able to gain 0.2. percent. For tomorrow, it is expected that the Reserve Bank of New Zealand will raise its borrowing costs for a fourth time this year.
Gold declined in the last two weeks caused by strong economic data in the U.S. which streghtened the USD and boosted demand for equities. Gold for immediate delivery is traded at $1,306.96 an ounce. On July 10, the price for ounce was at $1,345.17.
Daily Technical Analysis
EUR/AUD (Daily)
Since the beginning of May, the chart shows a strong bearish trend. Although, the currency pair showed signs for a trend reversal, the resistance levels at 1.4827 and 1.4756 were too strong. At the moment the pair is traded a 1.4332. It remains to be seen whether we will experience a further downward movement. The ADX under the mark of 25 indicates that the bearish trend lost in strength. Moreover, the course also touched the lower Bollinger Band what could be the initiation of a reversal.
Support & Resistance (Daily)
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