Good morning from wonderful Hamburg. Optimism gets around the financial markets that the end of the crisis is near. Anyway today the FOREX market may trade quietly due to the Easter holidays in some of the countries. However we wish you a nice start in the week.
Market review
The JPY fell to a six-month low versus the AUD on expectations the global financial crisis is easing, spurring investors to buy higher-yielding assets that are financed by the JPY. The NZD/JPY fell also after speculation that U.S. banks will post better quarterly performances this week than some analysts expect, which increases demand for so-called carry trades. The AUD/JPY rose to 72.60, which is the highest level since the 14th of October 2008. The NZD/JPY is also in a bullish phase after it reached a high at 60.35 last Monday, which was the highest level since November 10th. Overall the Japanese currency declined against 15 of the 16 major currencies after Asian stocks rose. The MSCI Asia-Pacific Index of regional shares increased 0.6%, which is the third daily gain. Additionally the Nikkei 225 Stock Average rose 0.1%.
The EUR fell near a three-week low against the USD after expectations the ECB could signal further rate cuts this week. The EUR/USD rose to 1.32 after it touched it lowest level since March 18th on Friday when it touched a low of 1.3090. ECB President Jean-Claude Trichet said last week “the bank is studying unorthodox ways of bolstering the 16-nation region’s economy,” while council member Nout Wellink said the central bank may make additional cuts to 1.25%.
EUR/USD
Since the beginning of March the EUR/USD has been trading outside the horizontal trend channel between 1.31 and 1.2450. After the losses in the last few trading days, the pair has reached its old support level of around 1.31 again. If the market breaks the middle Bollinger band and the 1.31 support line it could fall further inside the horizontal trend channel.
AUD/USD
Since the end of February the AUD/USD has been moving inside a bullish trend channel. After all the bullish performances the marked reached its highest level from the beginning of the year at around 0.73. If the market goes through this resistance level it could raise further along the upward trend channel.
