Good morning from beautiful Hamburg. The weekend is over and we start the new week with more bad news and record losses. However, we wish you successful trades and a good start in the new week.
Market review
The JPY rose while finance ministers from the Group of Seven nations said that the global slump will persists for the most time of 2009. Additionally, Japan’s economy shrank by the most since 1974. This prompted the investors to sell riskier assets and the JPY recovered from losses of two days against the USD. The JPY climbed to 91.93 against the USD and reached a high of 116.99 from 118.37 versus the EUR. The Japanese currency rose 1% against the AUD to 59.75 and 1% versus the NZD to 47.56. The G-7 repeated its traditional message that “excess volatility” and “disorderly movements” in exchange rates must be avoided. However, the JPY rose further and Japanese stocks fell after the Cabinet Office said that Japan’s economy shrank 12.7% in the fourth quarter of 2008. On a long term view the JPY increased 21% against the USD in the past six months. It has been the best performer compare to the 16 major currencies in that time.
The GBP fell against almost all currencies after the Confederation of British Industry commented that the U.K. economy will contract. Contrary to the forecast the pace of economic recession doubled that was surprising. The GBP/USD declined to a low of 1.4202 from a day-opening and a day-high of 1.4294. The EUR/USD dipped to 1.2756 from 1.2862.
AUD/CHF
Since October, the AUD/CHF has been moving inside a horizontal trend channel with a resistance line at 0.81 and two support levels at 0.75 and 0.7280. At the beginning of February the market crossed the 0.75 line and came back to the support line. If the pair doesn’t break the 0.75 support level, it could pull back towards the 0.81 resistance line.
EUR/GBP
Since the middle of December, the EUR/GBP has been trading in a downward trend channel with a resistance line at 0.91. The market pulled back after touching the lower line of the channel twice. At the moment it is pausing at the 0.91 resistance line. If the EUR would crosses this level in the next days, we could expect a climb towards the upper line of the trend channel.
