The yen appreciated 0.3% to 117.54 per dollar

Good morning from Hamburg and welcome to our latest Daily FX Report. Yesterday, a government report showed that U.S. crude inventories advanced to the highest level in data going back more than three decades which caused Oil to fall down to the lowest in almost six years. Oil extended last year’s drop of almost 50% but seems not be a problem to the U.S. as they decided to produce 9.31 million barrels a day in 2015, the most since 1972, while the Organization of Petroleum Exporting Countries also resists to cut supply. There are just not interest for prices to go higher at the moment and this is positive for some economies dependent of that energy source who will see a smaller figure in their bills. If supply and demand is one of the main rules of economy, it seems that we will have cheap oil in the next months.

However, we wish you a successful trading day!

Market Review – Fundamental Perspective

The dollar climbed against most major peers even despite the Federal Reserve has pushed back expectations for the timing of the central bank’s first interest rate increase. It has been more important the statement from the Federal Open Market Committee saying that „economy activity has been expanding in a solid pace. Labor market conditions have improved further, with strong job gains and a lower unemployment rate”. Still, most of the analysts have the Fed’s October meeting as the most probably date for the first interest rates hike since December 2008. The U.S. dollar appreciated 0.8% to $1.1287 per euro, after weakening 1.3% the previous day. The peer reached $1.1098 last Monday, the strongest since September 2003. The yen appreciated 0.3% to 117.54 per dollar and also rose 1.1% to 133.68 per euro. The New Zealand dollar extended losses after the Reserve Bank held rates at 3.5%, saying the nation’s currency remained unjustifiably and unsustainably high. The NZD slid 1.8% to 73.17 U.S cents and touched a more than three years low. Regarding the Australian dollar, even though it raised as much as 1.1% in the earlier trade, encouraged by good economic data released (consumer price index rose 0.7% in the fourth quarter from the previous three month period, exceeding estimates) the Australian’s currency finally slid 0.6% to 78.89 U.S. cents. The Singapore dollar weakened against most of its major peers after its Monetary Authority, which uses the currency as the main policy tool, decided to ease policy to combat growing risks of deflation. Singapore’s currency dropped 1.1% against U.S. dollar, touching the weakest level since August 2010.

Daily Technical Analysis

EURUSD (H4)

Technically, the EURUSD continues immerse in a deep downtrend, no matters the time frame used. In this occasion, the peer is clearly bearish as long as the price continues below the main trend-line, so even if it is able to cross the first resistance placed at 1.1400, it would no change our bearish idea. Only if the price is able to break the main trend-line, and more important, confirm the movement breaking the second resistance placed at 1.1650, we could change our idea of a change of the trend to bullish. Below the current price, the minimum reached on Jan. 25th would be the immediate support.

Support & Resistance (Monthly)