Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from rainy Hamburg and welcome to our Daily FX Report. The last two days the U.S. military forces carried out four air strikes on Islamic State targets in Syria, and were also joined by partner nations in attacks in Iraq. Beyond that Sweden’s military is working on two new observations that could be evidence of suspected foreign underwater activity near the country’s capital. Since Friday are Swedish forces searching the sea of activity by foreign submarines or divers using an underwater vehicle.
Anyway, we wish you a great trading day.
Market Review – Fundamental Perspective
Last Friday the Dow Jones Index of shares climbed 1.3 percent and the Standard & Poor’s Index rose 2.0 percent. Speculations came up that the European Centrla Bank will expand stimulus to bolster growth in the 18-nation bloc. But a spokesman for the central bank said that the Governing Council has taken no such decision, nevertheless the market assumes that the ECB will add corporate bond purchases to its easing measures as soon as December. As a result the EUR decreased versus 13 of its 16 major peers and weakened 0.7 percent to 1.2716 USD. The EUR/JPY fell 0.6 percent to 136.06 and the USD/JPY was nearly unchanged at 106.97. Yesterday data showed the U.S. home resales increased to a one-year high in the past month Existing home sales advanced 2.4 percent to an annual rate of 5.17 million units, which is the strongest reading since September 2013. Furthermore a separate report showed service sector activity picked up speed this month.
Yesterday data showed that China’s gross domestic product rose 7.3 percent in the third quarter from a year earlier. Economists had estimated a climb of 7.2 percent. China is Canada’s biggest trading partner after the U.S. so after these good data the USD weakened versus the CAD to 1.1221. Today the Bank of Canada will announce interest rates and investors estimated that they will leave them unchanged at 1 percent. Yesterday German Finance Minister Wolfgang Schaeuble warned that higher public debt and surplus levels of global liquidity could be setting the stage of new asset price bubbles. He also said that a weaker EUR will help Germany exporters and in addition he added that the reason for economic weakness of some European countries is that they failed to implement structural reforms.
Daily Technical Analysis
NZD/USD (Daily)
The shark decline of the currency pair has been stopped at the support level around 0.7703 three weeks ago. Currently it is struggling with the close resistance level around 0.7975 and tries also to enter the lowest channel of the bearish Fibonacci fan. According to the climbing MACD the pair should succeed over the bears.
Support & Resistance (Daily)
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