Good morning from wonderful Hamburg. The new week starts with a good sign: Asian stocks list higher and we hear optimistic sentences regarding the end of the global economic crisis.
Market review
On Monday the JPY slid towards a five-month low against the USD and the EUR. It also fell against all of the 16 most traded currencies and decreased against the NZD to the weakest since November 2008. On the one hand the currency dropped on expectations the Bank of Japan will keep the interest rates near zero percent tomorrow. On the other hand we got last week’s global plan to help developing countries to lift up the investor’s appetite for riskier assets and high-yielding currencies such as AUD and NZD. The current market trend is to sell the JPY on higher stocks, while a recovery in emerging markets is encouraging market player to buy high-yielding currencies against the JPY. Even an analyst said that the global recession and financial crisis may be come closer to the turning point.
On Friday the EUR/USD fall 0.31 % to 1.3442 despite bad US job data. The data showed that the United States lost 663,000 jobs in March, but the figure was not as bad as many market players had feared. However in Asia trading the EUR was able to re-growth more than 0.90 % and is now trading at 1.3560.
Foreign-exchange traders are boosting bets that Bank of Canada Governor Mark Carney will weaken the CAD by embracing quantitative easing. Among the world’s most traded currencies, only the JPY, GBP and USD performed worse in March than the CAD as central bankers began printing money to buy debt assets. For example the NZD, which like the CAD tends to track fluctuations in commodities, had its best month in at least 20 years in March.
GBP/USD
Since March, the GBP/USD has been trading in a bullish trend duct. At the beginning of April, the pair rebounded strongly from the lower channel border and crossed the first pivot point at 1.4833. Because it broke through the pivot resistance in the first attempt and the momentum is rising and has a positive value, the long GBP phase could still persist.
EUR/GBP
Since January, the EUR/GBP has been trading in an upward trend channel. However, in March the short term moving average crossed the medium term MA and is now very close to break through the long term MA. This movement is accompanied by a hammer candle, which is a trend reversal signal in the chart technique. According to Andrew’s pitchfork, the EUR could decrease near to the middle line of the support level.
