Global stock markets were stung by severe swings in recent weeks

Good morning from Hamburg and welcome to our first Daily FX Report for this week. Egypt will hold a long-awaited parliamentary election, starting on Oct. 18-19, the election commission said on Sunday, the final step in a process to bring back democracy that critics say has been tainted by widespread repression. Egypt has been without a parliament since June 2012 when a court dissolved the democratically elected main chamber, dominated by the now-banned Muslim Brotherhood, reversing a major accomplishment of the 2011 uprising that toppled autocrat Hosni Mubarak. The election had been due to begin in March but was delayed after a court ruled part of the election law unconstitutional.

Anyway, we wish you a successful trading week!

Market Review – Fundamental Perspective

After a dizzying two weeks that saw a rapid plunge and rebound in equity prices, investors are looking forward to a week of economic data that may provide clarity on the likelihood of a near-term U.S. interest rate hike and help tamp down the market's recent wild swings. The economic figures will culminate in Friday’s jobs report that should reveal more about the strength of the U.S. economy. Car sales, construction spending, the Federal Reserve's "beige book" and jobs growth may show the economy is strong enough to withstand the first rate hike in nearly a decade from the Federal Reserve, despite worries about a hard landing for China’s economy. Global stock markets were stung by severe swings in recent weeks, stoked by concerns that a slowdown in China's economy may be more harsh than anticipated. But after confirming a move into correction territory, the S&P 500 rebounded to score its best two-day percentage gain in over six years this week, as comments from Fed officials led some investors to believe the market turmoil and global growth concerns had diminished the possibility of a rate hike at the central bank's September meeting. A September rate increase hasn't been ruled out, however. Fed Vice President Stanley Fischer told CNBC during the Fed's annual conference in Jackson Hole, Wyoming, that the committee was "heading in the direction" of higher rates. Should next week's data show the U.S. economy continues to slowly improve, market volatility is likely to remain as investors grapple with the possibility of a September hike and its ramifications for risk assets.

Daily Technical Analysis

GBP/USD (Daily)

As the chart shows, the GBP decreased steadily versus the USD since the mid of July 2014. At the support around 1.4726 the bearish trend was broken and the price rose till the level around 1.5770. It has fallen after it reached that resistance level. Currently the suppost at 1.5323 is significant as it could stop the current bearish trend.. The CCI is showing that the pair is likely to move upward.

Support & Resistance (Daily)