Good morning from beautiful and still cold Hamburg. It’s Tuesday and unfortunately we cannot report better news about the Global economy, which could slow down the volatility in the FOREX market. Nevertheless, we wish you a successful trading day and hope for better economic news.
Market review
On Tuesday the USD gained against a basket of currencies. The GBP/USD fell to its lowest level in more than six years as the Royal Bank of Scotland (RBS) reported the biggest loss in the British corporate history. Regarding this situation at RBS came up some voices saying the U.K. government could have to take the full control of the RBS. The U.K consumer prices rose 2.6 % last month, after a 4.1 % increase in November. The GBP/USD dropped 1.0 % from 1.4420 to 1.4277, after touching a low at 1.4248, which was the lowest level since March 2002. The dollar index, which displays USD’s performance against a basket of six major currencies, rose 0.3 % to 85.402. The EUR/USD fell from 1.3069 to 1.3003 after touching the 1.2989 for a moment. 1.2989 was the weakest level since December 10th.
After the news from U.K. and the losses on Tokyo stock exchange, the JPY rose to a record high against the GBP and gained against the EUR on speculation credit-market losses could widen. The U.K. government increased aid to banks in order to boosting demand for higher-yielding assets, which are funded in JPY. The GBPJPY touched its new all-time low at 127.44. The JPY climbed 0.9 % to 117.42 against the EUR and advanced to 90.29 versus the USD.
CHF/JPY
In the middle of December the CHF/JPY broke though the strong bearish trend line and entered in a new sideward trend channel with a resistance at 87.00 and a support line of 79.00. Currently the market trades closely above the support line. If the market doesn’t cross the 79.00 support level, it could move back towards the resistance line.
EUR/AUD
Since the beginning of 2009 the EUR/AUD has been moving between the 1.86 support and the 2.0040 resistance line. After touching the 2.0040 resistance for the third time, the market started to fell along a bearish trend line. If the market breaks trough the 1.95 support, it could follow the bearish trend line towards the support levels at 1.90 and 1.86.
