Good morning from beautiful and cold Hamburg. Due to the Chinese New Year holidays the market is trading very quite. At the latest we should see some moves after the news from the FED. Anyway, we wish you a nice Wednesday and a happy New Year to all our Chinese clients.
Market review
The USD/JPY traded near to a one week high. Because on speculation the U.S. will create an institution to remove bad assets from bank balance sheets. The JPY also fell against the EUR the GBP and the AUD after the Japanese Government launched a $16.7 billion scheme on Tuesday. The USD/JPY climbed to 89.25 from 88.97 after touching a high of 90.07, which was the highest level since January 21st 2009. The AUD/JPY gained 1.4% to 59.53 while the RBA is expected to slash interest rates by 75 bps at its monthly meeting on February 3rd 2009. As well the EUR/JPY rose to 118.33 from 117.08 after touching a high at 119.45, which was the highest level since January 19th 2009. The GBP/JPY rose to a high of 127.96 after opening the day at 125.96.
The EUR increased against the USD before the end of the two-day meeting of the Fed. Market analysts are expecting that the central bank may announce to buy more assets to ease the credit crunch. With the benchmark interest rate, which is already near zero, the market is looking for any new policy steps, such as purchasing long-dated Treasuries. According to some traders, the EUR may extend gains on expectations the ECB could refrain from cutting it benchmark interest rate of 2%. However, the EUR/USD rose to 1.3230 from 1.3178, after touching a high at 1.3266.
EUR/USD
Since the beginning of January, the EUR/USD has been moved in a bearish trend channel. After breaking the upper line of the downward channel at the 27th, the pair touched the 1.33 resistance line and pulled back again. Currently the pair trades around 1.3230. If the market breaks the 1.31 support level, it could continue its bearish trend phase.
GBP/CHF
After touching the 1.6760 resistance level, the GBP/CHF came down and broke trough the 1.6200 support line. As the market reached a low of 1.5650 at the 21st, the GBP rose again and the pair reached the 1.6200 resistance line. If the currency pair doesn’t cross this level clearly, it could fall towards the three support lines of 1.5850, 1.5725 and 1.5650.
