Good morning from Germany and welcome again to our Daily FX Report. Unfortunately we have to report bad data and pessimistic concerns from Europe, Asia and the USA. The global financial recession doesn’t want to end. However, have a nice day and sunny weather.
Market review
The JPY strengthened against 11 of the 16 major currencies, after China said its economy expanded at the slowest pace in almost a decade, which heightened concerns that the global recession may deepen. “It looks like people who had sold the JPY on hopes for better China figures had to buy back the JPY to cover their short positions,” a trader said. China’s statistics office reported today that the gross domestic product grew 6.1% in the first quarter compare to last year. This is the weakest grow since December 1999. The JPY rose against the USD before a U.S. report may show today that home construction slowed and initial claims for jobless benefits increased. Yesterday, the EUR touched a two-week low versus the JPY on speculation that today a European Union report could show the region’s industrial production dropped by a record pace, which supports the ECB to reduce interest rates. The weak EUR may fall for a second day against the USD while economists estimate the European Union’s statistic bureau in Luxembourg will say today that industrial production fell 18% in February from the year before, which would be the biggest decline since the data series began in 1986.
The USD/JPY fell to 99.16 after it opened the day at 99.37. The EUR/USD decreased a little to 1.3216. The GBP/USD is performing gains for the 4th day after it touched a high at 1.5068.
EUR/JPY
Since the end of January the EUR has been moving inside an upward trend channel against the JPY. Now the market is trading very close to the psychological support level of 130 and the lower line of the rally trend channel. Additionally we can indicate a small bearish signal from the MA Oscillator indicator. If the pair breaks both support lines it may start a new bearish trend.
AUD/NZD
Between the 19th of March and the 14th of April the AUD/NZD was trading stable under the resistance line of 1.2430. But during the past two days the strong AUD gained and broke the middle Bollinger band and crossed its resistance level at 1.2430. That analysis could be a clear indicator for more upward movements towards the upper Bollinger band.
