Good morning from wonderful Hamburg. The winter seems to be over here in Germany after the temperature rose in the past two weeks. Hopefully, we’ll have an early summer this year. However, we hope you had a great weekend and wish you a good start in the FOREX week.
Market review
The EUR fell against the USD and finished a period of four increases in a row on expectations that the European nations’ reluctance to boost spending which will extend the region’s economic recession. The EUR fell versus nine of the 16 major currencies after the Group of 20 finance ministers met on the weekend and said they had spent enough money to handle the financial crisis and don’t want to blow out their budgets any more. The EUR/USD fell to 1.2891 from 1.2928. The EUR/GBP fell 0.7% to 0.9194 from a day-opening of 0.9256. The demand for the EUR also fell on speculation the ECB could continue cutting rates. Investors expect a rate cut at its next meeting on April 2nd.
The JPY fell against 12 major currencies before the BoJ’s policy board starts a two-day meeting tomorrow. “The JPY is likely to be under pressure amid speculation longer-dated yields will decline,” a trader said. The USD/JPY rose to 98.24 from 97.95 after touching a day-high at 98.50. The USD-Index, which tracks the USD’s performance against a basket of major currencies traded at 87.413. The index touched the 89.624 level on March 4th, which was the highest level since three years.
USD/CAD
Since the beginning of October 2008, the USD/CAD started a bullish trend phase. After the market touched the 1.30 resistance line for the fourth time, it came down and touched the bullish green line for the 5th time. If the pair breaks the bullish trend line clearly, it may start to fall further. A break through the important resistance line at 1.30 could be a sign for a bullish phase.
AUD/NZD
Since July, the AUD/NZD has been moving inside Fibonacci retracement lines and a bullish trend channel. Now the market is trading close to the lower line of the channel at the 76.4% retracement line. If the market breaks through both lines, it could fall towards the 61.8% Fibonacci level at 1.2174.
