Good morning from beautiful and cold Hamburg. The FOREX market started to get stronger after the surprising and important new announced government plan of the United States. However we hope for good news and wish you all the best in trading for today.
Market review
On Tuesday the U.S. Treasury and the Federal Reserve Bank announced further measures, worth about $800 billion to support the debt and mortgage-backed securities, issued by Fannie Mae and Freddie Mac. These measures are also good to support asset-backed consumer lending. The FOREX market became more volatile after that news. The Dollar-Index, which measures the value of the USD against a basket of currencies, was up 0.2 % while the EUR/USD went over its 1.30 mark and touched a day-high at 1.3080. During the day it recovered nearly one cent to 1.2985 as some market players remained skeptical, that the latest U.S. measures would ease concerns about the financial crises. The GBP and the JPY also gained against the USD. The USD/JPY currency pair lost 2.09 % on the day and closed at 95.06 and is still trading around that level this morning. The GBP gained 1.96 % against the USD and touched a high at 1.5533. Currently GBP/USD trades below the 1.54 level again.
The JPY has gained against the EUR as investors sold overseas assets while others have unwound carry trades in which they bought the low-yielding JPY to finance high-yielding assets. The EUR/JPY is down 1.8% from its opening at Tuesday after rising 3.86% at the beginning of this week.
GBP/USD
Since the end of September the GBP/USD has been trading under a bearish trend line. After breaking the 1.55 support line the market made a semicircle movement and trades now near the 1.55 resistance line. If the pair breaks this level and the bearish trend line, it could start a new bullish phase.
USD/CAD
Since October the USD/CAD has been trading over a bullish Fibonacci fan. After touching the 1.3 resistance level twice the market returned and is trading close to the upper Fibonacci fan line again. If the market enters the Fibonacci fan lines it could continue its bearish trend toward the 1.15 support and the lower fan line.
