We wish you a wonderful good morning from Hamburg. Yesterday we didn’t saw any unexpected decision from the BoE and ECB but nevertheless the FOREX-market was stimulated. However, we wish you a prosperous trading day and hope that you will enjoy the weekend.
Market review
Yesterday Jean-Claude Trichet, President of the European-Central-Bank, signaled at the rate decision press conference that the ECB will cut key interest rate further. Hereupon, the EUR/USD boosted its bearish trend and fell near to its lowest level since November. Additionally, the Bank of England cut its main refinancing rate 50bps as well. It also announced that it will spend £75 bln to buying government and corporate bonds in the next three month. In order of that, the EUR/GBP decreased for the third day in a row from 0.8920 at its opening to 0.8853 at its lowest level on Thursday. Also the Fed reported that it bought for $30.1 bln mortgage bonds from Fannie Mae, Freddie Mac and Ginnie Mae. The GBP/USD was little changed and closed the session at 1.4118 from 1.4194 at its opening. The USD headed to a sixth week high against the JPY on concerns that Japan’s political turmoil and economic slump are worse than expected and will reduce the demand of the JPY.
Australia’s stock benchmark fell close to a 6 ½ year low and drags the AUD and the NZD. Incriminating factor was that the economy in Australia shrank in the fourth quarter unexpectedly and its January trade surplus grew less than expected which raised speculation that the central bank may cut the interest rate. The NZD/USD declined 1.7 % after a government report showed the New Zealand’s cash budget deficit was wider than expected.
USD/CAD
Since the end of February, the USD/CAD has been trading in a bullish movement close to a one-year high. But on March 4th the currency nosedive and stopped on the lowest Febonacci fan line. Then a Doji signalized a trend reversal and in order of this, the USD/CAD recoverd and climbed over its third Febonacci fan again. Yesterday the currency pair closed with a closing tail and the short MA crossed its long counterparty and the bearish risk increases.
GBP/JPY
The GBP/JPY fell conspicuous below its old support at 139.52 and the currency pair stabilized its level near the next support at 137.68. Now it seems that it has built a basement and could maybe the initial point to retest the 139.52 resistance. A first sign for a bullish movement could be the Bullish Engulfing Patt. doji on yesterdays closing. Also the MACD seems only to touch the zero level and may help to recover.
