Good morning from cold Hamburg and welcome to our Daily FX Report. A lot of major currency pairs in the FOREX market moved to record levels based on concerns that the global economic recession will be bigger than expected after a lot of bad financial reports from huge banks worldwide.
Market review
The JPY rose to a record high against a basket of currencies. The GBP lost against the JPY on expectations the deepening financial crisis will force the U.K. government to nationalize banks. The JPY also rose to a 13.5-year high against the USD and a seven-year peak against the EUR the previous day, as investors started speculating about global banking woes. The GBP touched a 23-year low against the USD. Tomorrow, the U.K. government will announce a report that may show that the last quarter economy decline was the biggest since 1990. This announcement could support the BoE to cut interest rates next month. According to a survey the BoE may lower rates by 50 bps to 1 percent at its February 5th meeting.
The JPY rose to 124.88 against the GBP after touching an all-time high at 119.42 yesterday. The EUR/JPY rose back to 113.12 after touching the lowest level since March 2002 at 112.10 yesterday. The USD recovered to 89.15 versus the JPY yesterday after touching its lowest level since July 1995 at 87.13. The GBP/USD touched also a record low at 1.3622, which was the weakest price since September 1985.The EUR/GBP recovered from 93.27 to 93.46 yesterday. It might reach new highs in 2009.
GBP/USD
Since the end of September the GBP/USD was trading in two bearish trend channels. With its breakout from the yellow trend channel, the market entered the white channel again and could follow the upper trend line. This breakout combined with the MACD analysis could be signals for further bearish movements.
AUD/JPY
In the past four months the AUD/JPY was trading in Fibonacci fan lines. After touching the upper Fibonacci fan resistance line, the market pulled down and tried to break the middle fan line. The market is trading on the 57.00 support level and the middle Fibonacci fan line at the moment. If the pair breaks trough these support lines, it could continue its bearish phase.
