The S&P 500 ended at a low not seen since early April

Good morning from Hamburg and welcome to our latest Daily FX Report. Washington wants to be certain that any nuclear deal between Iran and major powers includes the possibility of restoring U.N. sanctions if Tehran breaks the agreement without risking Russian and Chinese vetoes, a senior U.S. official said on Tuesday. United Nations sanctions and a future mechanism for Iran to buy atomic technology are two core sticking points in talks on a possible nuclear deal on which Tehran and world powers have been struggling to overcome deep divisions in recent days, diplomats said on condition of anonymity. The current talks have been taking place on the sidelines of a conference on the nuclear Non-Proliferation Treaty. The negotiations between Iran, the United States, Britain, France, Germany, Russia, China and the European Union will resume in Vienna next week.

Anyway, we wish you a successful trading day!

Market Review – Fundamental Perspective

Productivity over the past six months fell by the most in more than two decades, leading to increases in U.S. labor costs that threaten corporate profits. The measure of employee output per hour decreased at a 1.9 percent annualized rate after a revised 2.1 percent drop in the prior three months. The decline on average over the past two quarters was the biggest since the first six months of 1993. Expenses per worker increased more than projected at the start of the year. Another report showed companies may already be thinking twice about adding additional staff. Employment in the private sector advanced by 169000 in April, the weakest gain since January 2014. U.S. stocks ended weaker on Wednesday after U.S. Federal Reserve Chair Janet Yellen warned of high valuations, adding to anxiety about future interest rates and a global bond rout. The S&P 500 ended at a low not seen since early April after Yellen said high equity valuations could pose dangers, although she also said she does not see any bubbles forming. Most of Wall Street's top banks see the Federal Reserve holding off until at least September before raising interest rates, based on Reuters' most recent poll. Cutting losses of more than 1 percent in afternoon trade, the Dow Jones industrial average fell 86.22 points, or 0.48 percent, to 17,841.98, the S&P 500 lost 9.31 points, or 0.45 percent, to 2,080.15 and the Nasdaq Composite dropped 19.68 points, or 0.4 percent, to 4,919.64.

Daily Technical Analysis

EUR/GBP (Daily)

Since January 2014 this currency pair is experiencing a storng control of the bears as it is falling below an downward Fibonacci fan. It could touch the third resistance line (61.8) two times but couldn’t strengthen its position and dropped back below it. The support line around 0.7106 stopped the fall. Looking at the Stochastic one can see that it moves above the 80-line, signaling that losses might occur.

Support & Resistance (Daily)