Good morning from Hamburg. Now we can start the fifth season, the Christmas season. While supermarkets start the business period in September with gingerbread hearts and chocolate Santa’s. We appreciate to start Christmastime when they build up the Christmas market where they sell a lot of mulled wine.
Market review
The US producer prices decline by a record of 2.8 % in October after energy prices slumped, which was shown by the government data on Tuesday. But a key measure of core inflation at the farm and factory rose by more than the forecast. Investors will remain very tense because US data showing a sharp slide in home prices in the third quarter. In choppy trading the USD increased at the beginning of European trading session. But a late rally on Wall Street limited the USD gains against the EUR and the GBP and boosted it against the JPY on hopes that the financial market turmoil may be starting to calm down.
The markets on the Australian economy have become overlay bearish and seem to be ignoring its strong starting position. The AUD/NZD 14-day relative strength index climbs to 70.518, which indicate that Aussie is overbought against the Kiwi for the first time since July 25th.
On Wednesday the JPY rose 0.6 % against the USD and 0.7 % against the EUR as investors continued to fear for a global recession and many saw the safety in the Japanese currency. Especially fears about the future of automakers darkened investors sentiment. General motors and Chrysler warned the US Congress that their industry has massive sale problems. A Japanese trader said, that a negative news or comment about their future could support the JPY.
EUR/GBP
After the big decline of the EUR/GBP on Monday, the currency pair developed a doji yesterday. This might be a good indicator for a turn around. Additionally to the doji the momentum shows that this was just a corrector in the strong increase of the EUR/GBP.
USD/CAD
At the beginning of this week, the increase of the USD/CAD slowed down and initially stopped the movement on the resistance at 1.2450. Also the 14-21-35 triple moving average indicates an end of the rally while the 14 day broke the 21 day MA and is as close to the 35 day MA as in the mid of October, where the USD increase started.
