Good morning from beautiful and cold Hamburg. Due to the bad financial situation of the huge and important banks in central and eastern Europe concerns about the economic situation is diffusing. Nevertheless, we hope you will have a nice day and good luck in trading.
Market review
The JPY rose for a third day versus the EUR on speculation European banks will confess increasing losses because of the financial recession in the region. The JPY increased against 13 of the 16 major currencies on concern the stock decline could prompt investors to sell higheryielding assets. It increased to 116.17 against the EUR and to 92.23 from 92.41 versus the USD. Overall, demand for the JPY rose after Asian equities fell. The Nikkei 225 Stock average fell 1.4% and the MSCI Asia-Pacific Index slipped 1%, spurring investors cut holdings of higheryielding assets.
The EUR fell close to a 10-week low versus the USD on expectation the Commerzbank AG, German’s second biggest and ING Group NV, the largest Dutch financial company, will report combined losses of more than 4 billion Euros when they release earnings today. “Worries are mounting over the financial situation in central and eastern Europe, especially about countries that have large exposure to those regions,” a trader said. The EUR/USD fell to 1.2582 from a week-opening of 1.2851, which is the lowest level since the 4th December 2008. This week the currency pair fell more than 2% and the next main support level would be at 1.2389 from November 13th 2008.
AUD/JPY
Since October, the AUD/JPY has been trading alongside bearish Fibonacci fan lines and a support level at 57.00. As you can see, the market is trading close under the upper fan line and it is also quoted near to the 57.00 support level. If the market clearly breaks through the support line, we could expect further bearish movements. If not, it will cross the upper fan line and maybe start an upward movement.
EUR/CHF
Since the end of December, the EUR/CHF has been moving inside a horizontal trend channel. After the market touched the 1.5150 resistance line for the 5th time, the pair came back to the 1.47 support level. If the market goes through the 1.47 support line, it could continue its bearish trend towards the all-time low of exactly 1.4300.
