Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from wonderful Hamburg and welcome to our second-last Daily FX Report for this week. One year after Hugo Chavez death, Venezuela’s President Nicolas Maduro is facing the largest challenge with anti-government demonstrations that have led to 18 deaths since the past month. Meanwhile diplomatic efforts to resolve the crisis in Ukraine made only little progress at talks in Paris.
However, we wish you a greatful trading day!
Market Review – Fundamental Perspective
Yesterday the Dow Jones Index of shares weakened 0.2 percent and the Standard & Poor’s Index finished almost flat. Beyond that data showed yesterday that U.S. companies added 139,000 workers in the past month following a revised 127,000 gain in January. Economists had estimated a gain to 160,000. In addition the European Union’s statistic office in Luxembourg announced yesterday that gross domestic product in the euro-area increased 0.3 percent in the fourth quarter of the last year, coming from a 0.1 percent gain. The market forecasted that today European Central Bank policy makers will keep benchmark interest rate unchanged at a record low at 0.25 percent. It has also been estimated that data today will show U.S. initial jobless claims dropped to 338,000 in the past month. The USD climbed yesterday to a one week high versus the JPY and is recently trading at 102.36. The EUR/USD was little changed at 1.3732 and the EUR bought 140.56 JPY.
Yesterday the Bank of Canada left interest rates unchanged at 1 percent and announced that ther next move depends on the progress of economic data. In January the CAD had tumbled to a 4 1/2 year low as the market had expected lower interest rates, so yesterday the CAD climbed against the majority of its most traded peers. The USD/CAD lost 0.6 percent and was at 1.1030.
Today data showed that Australia recorded a trade surplus and retail sales advanced in the past month more that economists had expected. Retail sales climbed in January to 1.2 percent following a 0.7 percent gain. Yesterday data had already revealed that fourth-quarter economic growth was faster that expected at 2.8 percent. The AUD/USD traded at a one week high around 0.9022. The NZD/USD remained high around 0.8420.
Data yesterday showed that U.K. economy is gaining momentum after an industry report showed U.K. services output expanded in February. The GBP/USD was at 1.6717.
Daily Technical Analysis
USD/CAD (Daily)
After the USD/CAD had touched a 4 1/2 year low at the resistance level 1.1194 (Fibonacci level 100) it declined back to the long term upward trend line. Based on the Stochastic, which is on a low level, more losses might be unlikely.
Support & Resistance (4 Hours)
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Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.