The euro stayed on the back foot after the weak German data

Good morning from beautiful Hamburg and welcome to our last Daily FX Report for this week. Islamic State fighters seized more than a third of the Syrian border town of Kobani, a monitoring group said on Thursday, as U.S.-led air strikes failed to halt their advance and Turkish forces looked on without intervening. With Washington ruling out a ground operation in Syria, Turkey said it was unrealistic to expect it to mount a cross-border operation alone to relieve the mainly Kurdish town.

Anyway, we wish you a successful trading day and a relaxing weekend!

Market Review – Fundamental Perspective

Investors have long believed that a solid U.S. recovery will eventually help lift many other sluggish economies around the world, including those in Europe. But now there is growing fear that the U.S. economy cannot escape unscathed when Europe is stalling and many other big economies, including China, Japan and Brazil, face their own hardships. The latest shock came from Germany, which reported on Thursday that its exports fell 5.8 percent in August, the worst decline since January 2009. While U.S. Federal Reserve policy makers start to raise concerns that the recetns dollar strenght may impact growth, the Bank of Japan is banking on policies designed to weaken the yen for boosting its economy.
As stocks declines and signs of a overall global slowdown boosted demand for haven assets, the yen was set for gains against most of its 16 major peers this week. The yean headed for its biggest weekly advance in almost nine months versus the dollar. It touched 107.53, which was the strongest level since Sep. 17. The euro stayed on the back foot after the weak German data. It had reached a 2-1/2 week high of $1.2791 per euro early on Thursday, but beat a hasty retreat and was last trading at $1.2688.
Unsurprisingly, commodity currencies were among the hardest hit with the Australian dollar sliding back below 88 U.S. cents from near 89 cents. It last traded at $0.8764. Its New Zealand peer fell back to $0.7861 from a two-week high of $0.7975, while the Canadian dollar dipped to C$1.1187 per USD from C$1.1082.
Concerns about global economic growth hit oil prices hard, with Brent oil prices falling to $89.24 a barrel, its lowest level since mid-2012. U.S. crude futures traded at $84.68, having fallen to $84.06 on Thursday, its lowest level in almost two years.

Daily Technical Analysis

EUR/USD (Daily)

After reaching the resistance level at 1.3693 in the end of June, the EUR experienced a sharp decline against the USD. As we already said on Monday, the currency pair experienced a further decline and was even able to break through the previous support level of 1.2889. At the moment the EUR is experiencing a light recovery and both indicators support the evidence that the recovery phase may hold for a while.

Support & Resistance (Daily)