Daily FX Report

New Zealand data indicates the service sector had stalled for the first time in a year

Tue, May 20 2008, 09:02 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG


Good morning from wonderful Hamburg and welcome to Varengold’s Daily FX Report. In these days you have to be a rich man to fuel the tank of your car. FX market also keeps an eye to the oil all time high at 127,00, because of inflation risk and the risk of an economic slowdown.

Markets review

New Zealand data indicates the service sector had stalled for the first time in a year, driven by plunging consumer confidence and weak employment data. The NZD/USD quotes at 0,7710, a loss of 0,37%.

In its monthly report, BOJ says the economy is slowing due to high energy and raw material prices, but the central bank keeps its assessment unchanged. The BOJ also leaves its interest rate target stable at 0,5%. After the rate decision the USD/JPY lost 0,33%.

The USD rebounded from a 2 ½ week low versus EUR after an unexpected rise in a leading indicator report suggested that the economic downturn in the US might be nearing a bottom. That development reassured investors that the Federal Reserve would have room to hike interest rates later this year.

The market focus is on EUR/USD after the EUR failed to stay above 1,5600. “The EUR is choppy and traders are eyeing key German data later today. If figures are strong, the EUR could break above the recent range while weaker figures push it below the range’s lower end,” says a market analyst. Before Germany’s ZEW sentiment index and US PPI due later in the day, the USD will likely struggle to extend gains, traders say.

Technical analysis

USD/CHF

After the USD/CHF broke through the resistance at 1,0217 it now lasts around 1,0600. In view of the downward trend since the beginning of this year it could leave in trade channel. If this will happen we might expect a horizontal movement.

Chart 1

CAD/USD

The CAD lost profits against the USD after trading sideward since mid of March. Yesterday it broke the support at 0,9983 top down making further losses possible.

Chart 2


Pivot Points - Daily FX Support and Resistance Levels
Currency Support 2 Support 1 Pivotpoint Resistance 1 Resistance 2
EUR / USD 1,5396 1,5457 1,5544 1,5605 1,5692
USD / JPY 103,12 103,73 104,21 104,82 105,30
GBP / USD 1,9349 1,9420 1,9522 1,9593 1,9695
USD / CHF 1,0343 1,0435 1,0504 1,0596 1,0665
AUD / USD 0,9478 0,9504 0,9534 0,9560 0,9590
CAD / USD 0,9833 0,9874 0,9936 0,9977 1,0039
NZD / USD 0,7662 0,7692 0,7733 0,7763 0,7804
EUR / AUD 1,6173 1,6222 1,6291 1,6340 1,6409
EUR / CAD 1,5207 1,5294 1,5441 1,5528 1,5675
EUR / CHF 1,6222 1,6277 1,6328 1,6383 1,6434
EUR / GBP 0,7930 0,7944 0,7961 0,7975 0,7992
EUR / JPY 160,97 161,45 161,99 162,47 163,01
GBP / CHF 2,0328 2,0424 2,0499 2,0595 2,0670
GBP / JPY 202,20 202,74 203,42 203,96 204,64

Daily Calendar & Key FX Events
Date Time (GMT) Economic Indicator Last
20.05.2008 09:00 DE ZEW economic sentiment -40,7
20.05.2008 11:45 USICSC chain stores ww -1
20.05.2008 12:30 USPPI inflation y/y, NSA 6,9
20.05.2008 12:30 CASecurities Cdns C$ m/m -6,14
20.05.2008 12:30 USProducer prices, core yy 2,7
20.05.2008 12:55 USRedbook yy 2
20.05.2008 14:00 USIBD economic optimism 39,2

Published on  Tue, May 20 2008, 09:33 GMT

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