Good morning from rainy and cold Hamburg. The FOREX market is trading with high volatility after speculations about FED’s stress tests and the ECB rate decision tomorrow caused more risk appetite. Anyway, have a nice day and successful trades.
Market review
The JPY and the USD climbed against the EUR after U.S. regulators expected to say that some of the nation’s banks need more capital, which would increase demand for the relative safety of the two currencies. The USD/JPY fell by the most in more than a week as Bank of America Corp. holds the biggest demand for new capital among the 19 banks that got stress tests. According to a report that the government’s review will show that Bank of America needs $34 billion fresh capital. The EUR dipped the highest level in more than a week versus the JPY on speculation the ECB may take more steps tomorrow such as cutting interest rates and buying debt to fight against the economic recession. The Benchmark interest rate in Japan is 0.1 percent and as low as zero in the U.S., compare with 3 percent in Australia and 2.5 percent in New Zealand, increasing demand for the south Pacific nations’ assets while investors seeking higher returns. According to a survey, the ECB could probably cut the rates by a quarterpercentage point to 1 percent tomorrow. Today the EUR/JPY fell 1.3 percent, touching the psychological support at 1.3000. The USD/JPY fell 82 pips to 98.00 after opening the day at 98.82. The EUR/USD fell to a low of 1.3247 by falling the second day.
EUR/USD
As you can see the Pivot points in the EUR/USD chart might be an important indicator. The most active currency pair has been showing very clean movements inside the points since 20th of April. The next support will be at 1.3208. If the market breaks through the point it could fall further towards the next pivot support line of 1.3030.
AUD/CHF
The AUD had pocket a lot of gains inside an upward trend channel against the CHF. After it touched the 80.70 support and the lower line of the channel, it came back, up to the 84.50 resistance. It’s the second time that the pair is touching this level. If the pair breaks through this line, it could extend gains inside the channel.
