Good morning from frosty Hamburg. After the important decision of the government in Washington to support the Citigroup, the Stock markets showed a lot of gains as well as the FOREX market which has also shown some surprising movements.
Market review
Yesterday the EUR/USD rose 2.8 % after U.S. stocks has shown a lot of gains and the crude oil price came back with its biggest 2-day gain in two months to 54 USD a barrel on expectations of another OPEC oil conveyance cut. Another reason of this huge move in Stocks and the EUR/USD could be the important decision in Washington as the Government agreed to pump 20 bln USD into struggling Citigroup, the second-largest bank of the United States. The EUR/USD touched its 2-week high at 1.2927 before coming back below the 1.29 level again. The USD also lost a lot against the CAD as the pair fell almost 3 % and closed the day at 1.2298.
In spite of the national holiday in Japan on Monday the EUR/JPY gained around 5 % from its low at 119.60 to its high at 126. The EUR came back and trades currently around 123.90 against the JPY. “The EUR is in a correction stage from its overnight rally against the JPY and given the thin volume, it could easily fall 1-2 JPY,” said a Japanese trader. “In the short term, however, there is more interest in buying the EUR against the JPY,” he adds. The USD/JPY fell 1 % to a low at 96.30 on the day while the Nikkei is up about 5 % this morning.
EUR/GBP
Since the beginning of November the EUR has shown huge gains against the GBP. After its break through the 0.82 resistance line and touching its all-time high at 0.8662 the market came back and trades currently near the bullish trend line. If the pair breaks this line it could fall further toward the 0.82 support level.
EUR/CAD
As supposed the EUR/CAD recovered very strong after it reached the lower Bollinger band at the beginning of this month. The currency pair has already touched the upper Bollinger band and it could be that the market is ready for a repeatedly return towards the middle and lower Bollinger bands.
