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The EUR/GBP rose from 0.8560 to 0.8585 at its closing

Tue, Jul 7 2009, 09:09 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG


Good morning from beautiful Hamburg and welcome to our Daily FX Report. It seems that China follow a long-term strategy to establish its own currency as an alternative to the USD. Let’s wait and see how the FOREX market reacts. However, we wish you a prosperous trading day.


Market review

The GBP fell against the EUR on speculation the Bank of England may increase its program of asset purchases by £25bln amid signs that the economy recovery is petering out, according to a report of the Sunday Times. The EUR/GBP rose from 0.8560 to 0.8585 at its closing. The JPY increased for the second day against all 16 major currencies after the Finance Minister of Luxembourg, Jean-Claude Juncker, said “we are still in the middle of the crisis”. In these uncertain times the relative safety of the JPY is in great demand. The USD/JPY weakened 0.67 % and the EUR lost versus the JPY even 0.70 %. The German edition of the Financial Times reported that China’s government started a pilot project to permit importers and exporters to use the Yuan as settlement currency, to fight against the hegemony of the USD. Though, the USD got support by the U.S. service index of non-manufacturing businesses, which rose from 44 to 47 points and signaled that the industries shrank by the slowest pace within nine months. The EUR/USD closed little changed at 1.3984 with a profit of 0.1 %. The AUD and NZD strengthened in the early Tokyo trading hours as Asian equities declined and reducing the demand for higheryielding assets.


USD/JPY

Daily FX Report

The bulls turned its back on the USD/JPY after it touched its peak at the beginning of June. Since that time, the currency pair has been trading in a bearish trend-channel, which amplified its strength since the first July week. It remains to be seen if the S1 pivot point may be strong enough to stop this trend, otherwise we should allow for a decrease near to its support at 94.50. The ADX indicator shows also a faultless bearish trend.


AUD/USD

AUDUSD

Since the middle of June, the AUD/USD has been trading in a trend-less zigzag movement. Now it seems that the bears prevail and in order of this, the currency pair crossed the 0.8007 and 0.7983 resistance levels and primary the support at 0.7880 stopped the downward movement. But it seems that the short recover phase may be over, in considering of a tumbling Momentum indicator, which could boost the bears again.

Published on  Tue, Jul 7 2009, 10:35 GMT


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