Good morning from wonderful Hamburg and welcome to the Varengold Daily FX Report. Last night, one of the world’s biggest cruise ships arrived in Hamburg. The Queen Mary 2 stopped by again for a visit in town, and it was a big happening in the harbour with some small fireworks. We wish you some fireworks for your trading today with some good results.

Market review

The USD dipped against the EUR this morning, taking a breather after hitting a six month high yesterday on data showing a deterioration in German business morale. The EUR gained about 0.3% from late US trading to 1.4698. The EUR pulled away from its six month low at 1.4570 from yesterday. The GBP also edged up about 0.3% against the USD to 1.8433 and trimmed some of its losses after cooling down to a two year low of 1.8330 on Tuesday. The JPY was also stronger against the USD this morning and was up to 109.29. This was also a gain of about 0.3%. This loss in the USD could be caused by selling by Japanese exporters, some professionals assumed.

The NZD has been trading around 0.7009 against the USD today, extending gains after hitting a two week low of 0.6896 on Tuesday, as the EUR reclaimed some of its losses versus the USD on short covering. A support line in NZD/USD could be around the level of 0.6940 and a resistance could be at 0.7040. Today, the market waits for the release of the National Bank of New Zealand’s business outlook for August. Some market professionals expects a slight recovery in confidence on cheaper energy costs and lower interest rate.

GBP/JPY

The GBP/JPY established a strong downward trend at the beginning of August. The trend channel was broken once through the upper line and once through the bottom trend line. Both breaks were not sustained, and the market continued on with its downard trend. If there is no sustained break through one of these lines, the market could keep on falling.

GBP/CAD

In GBP/CAD, it looked like more bullish potential with the second attempt to break the resistance line at 2.04. But after this short excursion, it was met with a very strong and cliffy bearish market with a break through its strong supprt at 1.99. The market doesn’t show any signs for a recovery anytime soon, and so the bearish trend could hold on.