Good morning from Hamburg. The injection plan of the Japanese government determines the market this morning because the Asian equity markets rise sharply. However, we wish you a successful trading day.
Market review
The JPY fell against major currencies, as gains in Tokyo shares reduced demand for the currency. Today, the Japanese government said it would offer public funds to companies whose capital is seriously hurt by the financial crisis. The MSCI Asia-Pacific Index of regional shares rose 3.1 %, which was the biggest rise in six weeks. The USD/JPY climbed to 89.50 after touching the day-high at 89.73. The AUD/JPY rose to 59.40 from 58.76. As well the JPY fell against the EUR after the pair rose to a high of 118.89 from a day-opening of 117.14.
Today, extra gains in the EUR may be limited because economists expecting a German report that will point out a decline in business sentiment. This boosts expectations for the ECB to cut its benchmark interest rate. The EUR/USD climbed to 1.3236 from 1.3189. According to a survey the Ifo research institute may say its business climate index, which is based on a survey of 7,000 executives, dropped to 81 this month from 82.6 in December. Yesterday, the GBP/USD touched a one-week high of 1.4080 after Barclays Bank PLC said it retains more than 17 billion GBP. The GBP fell to 1.3503 on January 23rd, which was the lowest price since September 1985, after the government announced a further bank bailout in three months and a further injection of funds into the Royal Bank of Scotland Group Plc.
The Dollar Index, which tracks the USD against a basket of major currencies, fell 0.6% to 84.261 after loosing 1% yesterday which was the biggest decline since December 17th 2008.
GBP/JPY
Since the beginning of 2009, the GBP/JPY has been trading along three bearish Fibonacci fan lines. After touching the 120.00 support level twice, the market rose and touched the 125.00 resistance and the lower Fibonacci fan line. If the pair crosses the 125.00 resistance and the lower fan line clearly, it could rise further and break out of the horizontal trading channel.
GBP/CAD
Since August 2008, the GBP/CAD has been moving in a bearish trend channel. As you can see the market pulled back whenever it touched the lower line of the channel. Now the market is trading again in the near of the lower line of the channel. This analysis combined with the MACD could be a sign for a rebound towards the upper line of the bearish trend channel.
