Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from beautiful Hamburg and welcome to our last Daily FX Report for this week. U.S. stocks eased on Thursday as mixed messages about Greece's debt talks kept investor uncertainty high along with a sharp drop in Chinese shares after brokers tightened margin rules. Seven of the 10 major S&P 500 sectors were lower, with the industrials sector falling the most, 0.4 percent, a day after the Nasdaq closed at a record high. International Monetary Fund Managing Director Christine Lagarde said there was still a lot of work to do before Greece and its international lenders could clinch a cash-for-reforms deal. Greece's government said it aims to reach an agreement with lenders by Sunday. A euro zone official said Greece will not be able to get the money still available under its current bailout plan if it does not agree to the outline of a such a deal by the end of the week.
Anyway, we wish you a successful trading day and a relaxing weekend!
Market Review – Fundamental Perspective
The dollar climbed to a 12-1/2-year high against the yen on Thursday before pulling back as investors bet that U.S. interest rates will rise later this year while Japan's monetary policy remains ultra-loose. The latest data on U.S. jobless claims and pending home sales supported expectations that the Federal Reserve is moving toward raising rates by year-end. The USD was last up 0.2 percent at 123.915 yen after touching 124.46 yen on the EBS trading system earlier. Year to date, the dollar has gained 3.8 percent against the yen. In contrast, the USD weakened against the euro even in the absence of a deal between Greece and its lenders, although hopes persisted that the cash-strapped nation will soon secure more money to avert a default. The euro was up 0.4 percent at $1.09485, erasing earlier losses tied to encouraging U.S. jobless claims and pending home sales data. The dollar index fell 0.5 percent after rising 1.4 percent in the previous two sessions. The biggest mover on other major currencies was the AUD, which shed 1 percent against the USD. Commodity currencies came under pressure across the board, with the Aussie hitting a six-week low of $0.7618 and New Zealand's dollar shedding over 1 percent to trade at $0.7130 , its weakest in over four years. Front-month Brent rose 1.4 percent to $62.91 a barrel and U.S. crude futures rose 0.8 percent to $57.97. Gold was little changed near $1,188 an ounce, spot silver dipped less than 0.1 percent on the day and copper rose 0.2 percent.
Daily Technical Analysis
EUR/USD (Daily)
Since June the bears took control over this currency pair and the euro experienced a sharp decline versus the USD and even reached its lowest level for more than 10 years. After experiencing this decline to a level of around $1.04, the EUR was able to regain a bit and is now traded at around $1.095. After a pretty sharp decline over the last weeks the EUR could recover a bit. According to the indicators further gains may be possible. The decision about Greece`s debt repayment will clearly influence the direction of the pair.
Support & Resistance (Daily)
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