Good morning from Hamburg. We hope you had a nice weekend. Investors expect a further volatile FOREX week after the FED announced a plan to buy long term U.S. treasuries. Anyway we wish you a nice start in the new trading week.
Market review
The JPY and the USD dipped, on speculation the new U.S. government steps to support banks, will increase demand for higher-yielding currencies. The USD extended its biggest decline since the 1985 Plaza Accord from last week, as Treasury Secretary Timothy Geithner said that the Government plans a public-private program that may provide “$1 Trillion Term Asset-Backed Securities Loan Facility” to purchase property-related assets from banks and securities firms.
The program is designed to make a profit in the long run through interests and fees. It will stimulate the economy by circumventing traditional credit channels that are now blocked up, the government said. The USD fell against the EUR to 1.3666 after it touched a day-low at 1.3685. The EUR/JPY rose 0.87% to 131.46 from its opening at 130.31.
The JPY also fell against the USD, AUD and NZD, after gains in stocks spurred investors to seek higher returns. The USD/JPY recovered from its last week losses, and rose 0.26 % to 96.2. The currency pair climbed 2.4 % overall last week. The NZD and AUD rose for the third day versus the JPY. The NZD/JPY climbed to 54.39 after it touched a high at 54.52. The AUD/JPY is currently trading around 67.00. It rose over 230 pips since March 19th.
GBP/JPY
Since the end of November the GBP/JPY has been trading under the 140.00 level. After starting a bullish phase during the past three months, the market touched the important 140.00 resistance for several times. According to the MA Oscillator analysis the market could break the resistance line and stay on the bullish trend line.
GBP/AUD
Since October 2008 the GBP is trading in a bearish trend phase against the AUD. After breaking through the upper line of the bearish trend channel, the market touched the 2.29 resistance and pulled back to the 2.075 support level from the end of January. If the market crosses this support level it may fall towards the support line at 2.024.
