Last week, the EUR closed with a slight gain

Good morning from beautiful Hamburg and welcome to our first Daily FX Report this week. In yesterday’s European championship game between England and Italy, Italy won in the penalty shootout after being the dominant squad.

Nevertheless, we wish you a great start into the week and much success in trading.

Market Review – Fundamental Perspective

Last week, the EUR closed with a slight gain, before continuing to drop to the lowest level within a week. But tomorrow’s bond selling auctions of Spain and Italy could calm investor’s skepticism concerning a soon waning European debt crisis. Leading economists expressed in several statements that the demand for European bonds is still present, although the interest rates of many euro nations, are still on a high level. Italy will sell inflation-linked securities with expiration date in 2016 and 2026 as well as 3 billion EUR of zero-coupon bonds, while Spain will issue three- and six-month bills. Besides this, there are concern that today's to be released German consumer confidence will be lower than in the previous months as a sign of the rising influence of the debt crisis on the biggest European economy. In addition, the focus will remain on the European area when the Heads of States will meet for a two-day summit in Brussels starting at the 28th of June, the first one after the Greek elections on the 17th of June. The election was won by the New Democracy leader Samaras, who expressed its will to remain into the European Union. But he demanded a time delay for the implementation of the austerity measures together agreed with the payment of the rescue funds. Therefore, the EUR tumbled 0.3 percent to 1.2536 against the USD after having declined to 1.2519 on Friday, the lowest level of the week. Also the JPY enforced against the 17 nation’s currency and advanced 0.4 percent to 100.67. While the JPY dropped briefly versus the USD to 80.62, the weakest level since the end of April, before gaining 0.2 percent to 80.29 triggered by the growing concerns of a splitting of the ruling Democratic party on the increasing of the sales tax. The parliament will vote tomorrow. During the last quarter, the EUR depreciated 2.7 percent and showed the weakest performance among the tracked currencies of the Bloomberg Correlation-Weighted Indexes. In contrast, the JPY strengthened 6.6 percent and the USD rose 3.7 percent in the same period. The AUD lost 0.3 percent to 100.31 U.S. cents and 0.5 percent to 80.54 JPY, while the NZD slid 0.4 percent to 78.75 U.S. cents and 0.5 percent to 63.23 JPY.

Daily Technical Analysis - Our Focus Currencies for Today

EUR/USD (4 Hours)

Since rebounding from the support level around 1.2315 on the 1st of this month, the EUR has been strengthening versus the USD along a bullish Fibonacci fan. After having opened with a bullish gap last week, it rebounded at the resistance level around 1.2746 and the upper fan line several times. Then the bears took control of the pair and pressed the market down to the support around 1.2518, where it is currently consolidating. As the DeMarker is indicating an overbought market and the MACD remains still bearish, we have to wait and see, whether the support level around 1.2518 can support the rate or further losses will be seen.

Intraday Support & Resistance (4 Hours)

AUD/NZD (4 Hours)

After having failed to cross the resistance level around 1.2946 on the 6th of June, the AUD/NZD currency pair has been declining inside a bearish Standard Deviation channel. The rate has reached a six week low around 1.2700, but there the pair experienced demand and is now trading close to the next hurdle around 1.2754. A recovering Momentum and the increasing Commodity Channel Index (CCI) is providing a bullish signal, why we might see further gains if the rate succeeds to cross this resistance.

Intraday Support & Resistance (4 Hours)