Good morning. Yesterday the U.S. Stocks performed with high gains after the Dow Jones rose over 6.8% and the S&P 500 climbed 6.5%. The U.S. government’s plan seems to show first effects to the market. However we wish you a nice Tuesday.
Market review
The JPY fell to a five-month low versus the EUR and the USD, after expectations that the U.S. government plans to help banks, to dispose toxic assets which could bring investors to seek for higher yielding currencies. “Active policy steps by the U.S. government tentatively weaken demand for `safe´ currencies” a trader said. The JPY also fell against the other 14 major currencies on speculation the rally in stocks will spur investors to sell the nation’s bonds and buy higher-yielding assets overseas. The benchmark interest rate in Japan is 0.1 percent, compare to 1.5 percent in the Euro-Zone and 3.25 percent in Australia.
The EUR/JPY climbed to 134.00 from 131.65 after the Nikkei 225 rose 1.4%. This is for the sixth time in seven days while the MSCI Asia Pacific Index of regional equities increased 1.3%. The EUR/JPY touched a high at 134.07, which was the highest level since October 21st. The USD/JPY rose for a third day to 97.93 from 96.95 and reached its old level before the massive drop in the USD last week. The JPY fell for a fourth day against the NZD and AUD. The NZD/JPY touched a high at 56.26, which was the highest level since January 6th. The AUD/JPY climbed 6.84% over the past four trading days. It trades currently around 69.50.
AUD/CHF
Since October the AUD/CHF has been moving inside a horizontal trend channel. After the market touched the 0.7260 support line at the end of February and it pulled back to the 0.7940 resistance line. It’s the second time that the currency pair is touching the 0.7940 resistance level. If it breaks through this level, it could rise towards the next resistance line of 0.8150.
AUD/JPY
During the past five months the AUD has been trading under the technical and psychological resistance line of 70.00. It started a bullish phase inside a trend channel at the end of January. Now the market already crossed the resistance line of 68.00. If it goes through the main resistance line of 70.00 it could continue its bullish trend inside the trend channel.
