Good morning from Hamburg and welcome to Varengoldbank´s daily FX report. We have reached the end of the week and if we will look in the past the FOREX trading week was stamped by high volatilities. However, we wish you a nice weekend and a successful last trading day in this week.
Market review
The JPY rose to a record high versus the GBP and traded close to the strongest level since 1995 against the USD on lingering concerns about the global banking sector and economic fears. The USD stayed firm against other currencies, partly thanks to the shift and drastic economic steps in the United States, according to some traders. The GBP dipped toward a 23- year low against the USD and fell near to its lowest level in two weeks versus the EUR. This week the GBP lost 6.3 % against the USD, 4 % versus the EUR and 10 % against the JPY, after the U.K. government’s plan for a second bank bailout within three months. Also the U.K. retail sales declined 0.7 % in December from the previous month.
The EUR fell to a four week low against the USD, after comments from Treasury Secretary Nominee Timothy Geithner who said, “a strong USD is in the United States’ interest”. The EUR/USD declined to 1.2939, after touching a low at 1.2825 on January 21st, which was the lowest level since the middle of December. The GBP/JPY fell to 122.60 after touching its all-time low at 119.43 on Wednesday. The JPY was little changed versus the USD at 88.96, after touching its lowest level since July 1995 at 87.12 from January 21st. The EUR/JPY rose up to 114.68, after touching 112.12 on Wednesday, the lowest level since March 2002.
GBP/AUD
Since the end of September the GBP/AUD has been trading in a bearish trend channel. After touching the 2.030 support level from July, the market came up and touched the upper line of the channel. Actually the pair trades close over the 2.100 support line from September. If the market will break the 2.100 support line it could continue its trend towards the 2.030 support level.
EUR/CAD
After its break trough the 1.6230 support line at the beginning of 2009, the EUR/CAD went down close to the lower Bollinger band. The pair came back to the middle band, with a cut trough the 1.6230 resistance level. If the market will cross the 1.6230 support line again, it could fall further towards the lower Bollinger band.
