Good morning from wonderful but frustrated Hamburg. Yesterday evening our local soccer team lost the semi-final of the national cup and cancelled the hope for its first championship since 22 years. Anyway, we wish you a successful trading day.
Market review
The GBP declined versus a basket of major currencies lead by the GBP/JPY which lost 1.95 % and fell from 144.88 at its opening to 142.01 at its closing. This bearish movement against the GBP was deployed by a U.K. Treasury report, which said that the amount of sold gilts will rise to a new record this year. Prime Minister Gordon Brown needs this money to attempt to lift the economy out of its worst recession since World War two. In Germany a familiar newspaper reported, that the government will announce today a forecast, which show that Europe’s largest economy will shrink by a postwar record of 6 % this year. The German government will run a budget deficit of 3.7 % of GDP this year and 5.5 % next year. So that Germany would breach the Stability and Growth Pact of Maastricht. Yesterday the EUR/USD rose 0.44 % from 1.2948 to 1.3001 at its closing.
The CAD decreased against the USD and the EUR, as the Bank of Canada will issue a report today, which paves the way for the quantitative easing policy. The AUD and NZD fell for the second day against the USD on concern that the U.S. government stress test will reveal additional bank losses.
EUR/CHF
The 120-minute candlestick chart of April shows a contracted Bollinger Bands for three times which implicate a heavy price movement in all three times. At yesterday’s closing the Bollinger Bands contracted again and this could be the next indicator for a trend boost. It remains to be seen, if the support at 1.5091 could be hold and if the resistance at 1.5160 might be crossed.
CHF/JPY
The currency pair has been trading in a bearish trend-channel since the 6th March. Now it seems that the CHF/JPY could stop its downward trend at 83.50 and try to build a new support. As long as this support-line hold on, an attempt to leave the long-term bearish-trend seems possible. The MACD Indicator is also showing a rising environment and may support the CHF/JPY.
