U.S. dollar gained 0.6% to 118.29 yen

Good morning from Hamburg and welcome to our latest Daily FX Report. Amazon.com Inc.reported profit for the fourth quarter that topped analysts’ estimates, shrugging off the effects of heavy spending on fast delivery and original video programming to attract customers. The online retailer posted a final profit of $214 million, or 45 cents a share. The average of analysts had projected a profit of 18 cents a share. Revenue was $29.3 billion, slightly below the average analysts’ estimate of $29.7 billion. The results boosted amazon following two consecutive periods of losses but they have not been good enough to avoid end 2014 with the first annual loo in at least 12 years. After the results, shares surged as much as 9% in the extending trading after early closing at $311.78.

However, we wish you a successful trading day!

Market Review – Fundamental Perspective

The dollar Closed at the highest level against its peers in more than a decade after the government report showed an improvement of labor market. This strong figures reinforces the views that the Federal Reserve is on track to raise interest rates this year, likely in October’s meeting. This prospect for higher rates in the U.S contracts with the new stimulus measures being enacted by central banks, like EBC last week, among others across the globe. With all this easing, the U.S Federal Reserve is the only central bank that is talking about normalizing their interest rates policy, and this is reflected in the strength of the currency. The only central bank that, at the moment, could follow the steps of the Fed is the Bank of England, but lately Mark carney and his colleagues have become more prudent about the possibility of an interest rate hike in 2015. The U.S. dollar gained 0.6% to 118.29 yen. Against the euro, it fell 0.3% to $1.1320. The Krone remained close to the euro after Denmark’s Central Bank unexpectedly cut its benchmark rate to a record minus 0.5% in order to protect the peg. On the other hand, Turkey’s lira fell to a record versus the dollar, the Aussie reached lowest since July 2009 and the New Zealand’s dollar slid to the least in almost four years. While those central banks lean dovish, the U.S. Fed is headed in the opposite direction, helped by good jobless claims figures to the lowest level since April 2000. According to this wide view, we just can expect the appreciation of the U.S. dollar continues during 2015 and 2016 against most peers, euro of course included, not being difficult to reach the parity in that period.

Daily Technical Analysis

EURGBP (Monthly)

At the moment, the EURGBP is technically in a crucial point because the peer is touching the downside of a down term channel and, at the same time it is standing on the long term uptrend. Even though the momentum is clearly bearish, we believe it is not going to be easy for the peer to cross the mentioned line at first, being probably to expect a bounce to the closest resistance at 0.7780 or even higher. Below the current price, we identify two significant supports at 0.7200 and 0.6575, being the second one stronger.

Support & Resistance (Monthly)