Good morning from beautiful Hamburg. The currency market seems to get more volatile especially the JPY crosses. The reasons are repeatedly bad data from economies and concerns about deepening recession. However, we hope you will make further successful trades.
Market review
The JPY rose to a two-week peak versus the USD before a U.S. reports may show that the industrial output and manufacturing shrunk, adding to evidence the financial recession of the world’s biggest economy is deepening. After falls in Asian stocks, the JPY also climbed to its strongest in two weeks against the EUR, bringing investors to cut holdings of higher-yielding assets. The EUR/USD may fall for a second day on speculation a German report today will show that wholesale prices fell for the fifth month, which would support the ECB to cut interest rates.
The USD/JPY fell to 98.42 after touching its low at 98.38, the lowest level since April 1st. The Nikkei 225 Stock Average fell 0.8% and the MSCI Asia-Pacific Index of regional shares fell 0.8%. The EUR/JPY fell for the second day to 130.33 after it touched a low of 130.26, therewith it fell almost 2.7% in just two days. The JPY also rose against the CHF after it touched its high at 86.14, which is the highest level since April 2nd. The EUR/USD recovered from its high on Monday, opened on Tuesday at 1.3368 and fell in the course of the day to 1.3246. The ECB reduced its benchmark interest rate on April 2nd by a quarter-percentage point to 1.25 percent, less than economists expected. The next policy meeting will be at May 7th.
GBP/AUD
In the 120-minutes candle-chart, the GBP/AUD looks like an overbought market. As you can see the pair crossed the upper Bollinger Band long ago and reached the first resistance weekly pivot point. If the market doesn’t break the pivot R1 of 2.0778, it may recover towards the middle Bollinger Band.
AUD/CHF
At a short-term view the AUD/CHF has been trading inside a bullish trend channel with two support lines. It’s currently the fourth time that the pair touched the upper support of the channel. Additionally we can indicate an oversold market due to the cross through the lower Bollinger Band. If the pair doesn’t cross both support lines, it may pull back and continue its upward trend.
