Good morning and welcome to our first Daily FX Report of this week. We hope you enjoyed your weekend and you could relax by such a good weather like we had in Hamburg. However, we wish you a successful trading week.
Market review
The JPY rose versus a basket of major currencies. The statement from Lawrence Summers, the director of the White House National Economic Council, that the U.S. economy will keep shrinking, pushed the JPY to the fourth gain in a row against the USD. The USD/JPY declined on Friday by 0.81 percent from 97.96 to 97.17. Today, Japan’s government lowered its estimate for the gross domestic product to -3.3 percent, the worst on record. The government said also there is a risk that the deflation may reemerge in the current business year.
The German Index for business confidence increased more than economists expected. The index rose from 82.2 points in March to actual 83.7 points. The International Monetary Fund said after its summit in Washington that the Group of 20 industrial and developing countries had committed to spending increases and tax cuts totaling 2 percent of their GDP this year and 1.5 percent next year. This would be 0.2 percent more as at the Beginning of 2009 appointed. The EUR/USD rose on Friday 0.75 to 1.3242 at its closing and opened today at Tokyo trading session at 1.3229.
The NZD declined versus the JPY and the USD as economists expect the New Zealand central bank will cut its key interest rate by 50bps to a new record low of 2.5 percent.
EUR/USD
On 17th of April the EUR crossed the support line of 1.3090 against the USD. After it pulled back and rose along the bullish trend line, it reached the resistance level of 1.3308. At the end of last week the market turned back again as the RSI showed an overbought market. If the pair gets support from its bullish trend line, it may increase and cross the 1.3308 resistance level.
AUD/JPY
Since the 20th of April the AUD/JPY has been trading in a bullish trend-channel. At the last trading hour on Friday, the currency pair tried to cross its resistance level at 70.35 and additionally to breach its middle-term downward-line. As you can see there are three resistance lines against one support level and the market is trading near to the support. If the market breaks through the support, it might be a sign for downward movements.
