Good morning from wonderful Hamburg. Yesterday the leader of the G20 countries demonstrated its determination to fight together against the worldwide financial crises. The ECB rate decision was rather a marginal note. However, we wish you a successful trading day and a good weekend.
Market review
Yesterday the European central bank cut its key interest rate by 25bps to 1.25 %, less than economists had forecast. After the rate decision the President of the ECB said that the ECB is looking at “optimizing what could be done and should be done to enhance credit support”. The ECB will announce its decision on new policy tools next month. The EUR gained against the USD 1.6 % to 1.3461 at its closing. As the G20, the 20 largest developed and emerging countries, proclaimed a more than $1 trillion big plan to counter the global financial crisis and a tougher regulation for hedge funds and other financiers, the JPY fell 1.01 % against the USD on reducing demand for Japan’s currency as a refuge. Robert Hormats, vice chairman of Goldman Sachs, said regarding the G20 “It’s the passing of an era and the U.S. is becoming less dominant while other nations are gaining influence”. Yesterday the GBP rose versus the USD and JPY about 1.77 % rather 2.8 % after a report showed that U.K. house prices unexpectedly rose last month for the first time since October 2007. The AUD and NZD also increased against the USD near to the highest level since January.
USD/JPY
On March 27th the Bollinger Bands narrowed to a bottleneck and suggested a trend reversal, which at least began on Monday as a bullish trend-channel. The USD/JPY crossed its resistance at 98.97 and the 100 level. If the pair will cross the upper Bollinger Bands as well, it could be a further boost for the bullish trend. On the other hand, the RSI indicator shows a over bought price and therefore there is a risk for taking profit.
EUR/CHF
Since March 20th, the currency pair has been trading in a bearish trend-channel until April 1st. The bottom was reached and an upward trendline was initialed. During this bullish trend the currency pair crossed its old resistance at 1.5264. But it seems that the resistance point at 1.5297 is too powerful and will probably stop the trend-channel.
