Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from Hamburg and welcome to our latest Daily FX Report. Apple Inc., the well- known technology company, unveiled a slew of new products, from larger screened iPhones to refreshed Macs, late last year to rev up growth. The move paid off last quarter with record sales and profit. Apple shares rose as much as 6.7% in extended trading after the company reported that sales of iPhones during the 4th quarter rose 46% to 74.5 million units, topping analysts’ average estimate of 64.9 million. The sales generated a profit to a record $18 billion, or $3.06 a share, on sales of $74.6 billion, much higher than a profit of $2.60 a share, and revenue of $67.5 billion expected by the analysts. Demand of Apple products soared „to an all-time high”, CEO Tim Cook said in the statement. According to these stunning results, it seems that those who predicted the end of Apple’s world leadership after Steve Jobs were wrong.
However, we wish you a successful trading day!
Market Review – Fundamental Perspective
The dollar declined from a more of a decade high after U.S. durable goods orders unexpected decreased sharply 3.4% (+0.3% exp.) in December for a fourth month and Federal Reserve policy makers began a two day meeting. The US currency fell yesterday against most of the major currencies as worse than expected corporate results, such as Caterpillar In. and Microsoft Corp., suggested that a slowing global economy might be affecting on U.S. growth. Analysts are betting on an October increase in interest rates by Fed. On the other hand, euro rose against CHF after a Swiss National Bank official said it remained ready to intervene in markets. The franc had traded near parity against the euro since the SNB announced on Jan. 15 its decision of abandoning its cap of 1.20 franc per euro which pushed the Swiss currency as much as 41% higher against the euro to the strongest level on record. Russia’s ruble bounced from a record low close Monday, when it plunged after Standard & Poor’s lowered Russia’s credit rating to junk for the first time in a decade. The sink of the price of Crude Oil in the markets is harming deeply the Russian economy, very dependent of this energy source, as one of the main world suppliers. The dollar fell 1.3% to $1.1381 against the euro after gaining to $1.1098 the previous day, the strongest since September 2003, which reflects the different stage both economies are at the moment. China’s yuan rose by the most in four weeks as the central bank strengthened the reference rate after the currency’s biggest two-day slide since 2.008.
Daily Technical Analysis
EURGBP (Monthly)
Technically, the EURGBP is clearly bearish, once broken the long term uptrend-line. At the moment, this pair is close to the low side of a downtrend channel, coincident with a very important support in the area of 0.7214. As a most probably scenario, the pair should not be able to cross this level easily, being possible a pull back to the mentioned broken long term uptrend- line, or even higher, to the resistance of 0.8065. However, if this first support support is finally broken, the 0.6540 level should also work as an important support.
Support & Resistance (Monthly)
This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational purposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.
Recommended Content
Editors’ Picks
AUD/USD jumps above 0.6500 after hot Australian CPI data
AUD/USD extended gains and recaptured 0.6500 in Asian trading, following the release of hotter-than-expected Australian inflation data. The Australian CPI rose 1% in QoQ in Q1 against 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY hangs near 34-year high at 154.88 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.