Good morning from beautiful Hamburg. It seems that the comedown of Japan’s economy takes control over the Japanese Yen. The majority of economists expect the end of gains in the JPY, which were mostly caused by the zero interest policy of Japan.
Market review
The JPY declined to a three-month low versus the USD after some reports showed this week that Japan’s economy could slip deeper in the recession than expected. That would reduce the spur of the JPY as a refuge from the global financial crisis. The Japanese currency also fell against the EUR before a report may show tomorrow that the unemployment rate rose to a three-year high and the consumer prices decreased for the first time since September 2007, some economists said.
The USD/JPY rose to 97.92 from 97.18 after rising over 4.3% this week. It touched the 97.94 level, which is the highest price since November 14th. The EUR fell against the JPY to 124.14 from 123.10. It is JPY’s worst month against the EUR since 2000 and the biggest drop versus the USD in more than 13 years. The USD/JPY increased on speculation that a U.S. report show today durable goods orders are decreased, which could appeal demand for the USD. Weaker economic news from the U.S. could assist the USD/JPY, a trader said.
The EUR could fall for a second month versus the USD on expectations the financial crisis in Eastern Europe will deepen. That will spur the ECB to cut interest rates on the coming policy meeting. Today Jean-Claude Trichet could express an increased concern about the Euro-Zone’s financial system. He will speak on European competitiveness at 13:00 in Dublin.
NZD/USD
Since the end of September, the NZD/USD moved along a bearish Fibonacci fan. During February the market touched the resistance level around 55.00 and started to trade close to the upper line of the bearish fan. If the pair breaks the upper line of the fan it could gain towards the 55.00 and 60.30 resistance levels.
NZD/JPY
During the past four months, the NZD/JPY has been trading in a bearish trend channel and built a resistance level at 50.00. Now the market is touching the 50.00 resistance line for the 3rd time, near the upper channelline and tries to cross the resistance. If the currency pair breaks both lines, it could rise further towards the possible next resistance line of 56.00.
