Good morning from wonderful Hamburg. Yesterday some frightening information from Mexico about a new, aggressive form of the swine flu reached the markets. This headed the U.S. stock market to strong losses intermittent.
Market review
Japan’s retail sales declined for 3.9 percent compare to a year earlier, which is the seventh decrease in a row. The world’s second-largest economy may shrink 3.3 percent during this fiscal year, which would be the sharpest contraction since the Second World War. Nevertheless the JPY gained against a basket of major currencies. The USD/JPY fell 0.41 percent and the EUR/JPY by 1.96 percent. This is the lowest level since more than six weeks. The JPY rose on speculation that the spreading outbreak of the swine flu will increase demand for safety. The EUR also weaken against the USD said the ECB member Ewald Nowotny yesterday. The bank is ready to use unconventional measures of quantitative easing, to improve the flow of credit. While ECB President, Jean-Claude Trichet said, “we have seen liquidity flows moving back from our balance sheet to the money market. This is a sign of improving confidence and more favorable conditions.” EUR/USD fell today in the early Tokyo trading session below the 1.3000 level. The AUD and NZD were also bonded by speculation that the spreading swine flu will hurt tourism and could spurring investors to sell riskier assets. Yesterday the AUD/USD decreased 1.87 percent from 0.7236 to 0.7031.
USD/CHF
In April the USD/CHF is moving in a zigzag course. Now the currency pair trades close to an upward trend-line and crossed its resistance at 1.510. It remains to be seen if the next resistance at 1.1605 could breach as well. The MA Oscillator Indicator may support further bullish movements. If the 1.1605 level would be crossed, the next upside potential would the 1.1721 resistance.
GBP/AUD
The currency pair touched its lowest level on April 10th and marks the 0.00 percent line of the Fibonacci retracement levels. Yesterday the GBP/AUD rose over its 61.8 percent line. This may be an important support to extend the bullish movement. Additionally the MA Oscillator may give further bullish signs.
