Good morning from Hamburg and welcome to our Daily FX Report. Today, the EUR started very weak in the day, which could be caused by a report from one of the biggest ranking companies. Anyway, we wish you a nice day and effectual trades.
Market review
The EUR/USD fell to a 10-week low after the Moody’s Investors Service, one of the world’s biggest ranking companies, said it probably will downgrade a number of banks with units in Eastern Europe. This brought back concerns inside the Euro-Zone and the EUR weakened against 14 of the 16 most-active currencies on speculation its recent declines triggered the execution of automatic sell orders. The EUR fell to 1.2650 from 1.2800 after touching a low at 1.2651. The EUR/JPY declined to 117.00 from 117.46 and touched a day low at 116.34. The Moody’s story “helped push EUR down below 1.27 and accelerated USD gains across the board,” a trader said. The EUR needs to find support at 1.2330, the lowest level since April 2006, which was touched in October, he adds.
The JPY fell to a five-week low against the USD, as Japan’s Finance Minister Shoichi Nakagawa said he would resign after budget bills are passed in the nation’s parliament. The USD/JPY rose to 92.41 from 91.73 after touching a high of 92.75, which was the highest level since January 8th.
The GBP fell on concern because of a U.K. report could show inflation dropped due to the economic slowdown, which would give the BoE more room to cut interest rates. The GBP/USD dropped from 1.4251 to 1.4200 after touching a low at 1.4187.
GBP/AUD
Since the beginning of the year, the GBP/AUD has been trading in a bullish trend channel. After touching the 2.30 resistance line and the upper line of the channel, the pair rebounded back to the 2.18 support level. If the pair doesn’t break through the 2.18 support line, it could continue its bullish phase inside the channel.
GBP/CHF
After finally ending the bearish phase at the end of the year, the GBP/CHF has started an increasing period with a resistance level of 1.70 and 1.75. After the market touched the 1.75 resistance line five days ago, it dropped down to the bullish trend line. If the market crosses the upward trend line, it may fall towards the levels of 1.5728 and 1.5127.
