Good morning. The economic data are signalizing an economic rebound, which makes the FOREX market more and more volatile. The global economy seems finally be on the way to reach the end of the recession. Anyway, we hope you’ll make successful trades and have a nice Thursday.
Market review
The JPY fell against 15 of the major currencies on speculation the U.S. banks need less new capital than projected, decreasing demand for the JPY as a safe haven from the global financial crises. The JPY also fell against the USD and the EUR after Treasury Secretary Timothy Geithner said “none of the 19 banks that underwent stress tests are insolvent”. That spurred gains inside the stock and other financial markets, expecting investors would buy higher-yielding assets. Yesterday the USD/JPY fell to a low of 97.94, but recovered back to 98.46. The EUR/JPY decreased for a third day in a row to 130.87 after touching the 1.30 support line yesterday.
The EUR dipped against the USD after expectations the ECB would cut interest rates by 25 bps and buy debt to stimulate the financial growth. The European currency fell for a 3rd day against the USD and for the 7th day against the CAD. The EUR reached its lowest level versus the CAD since November 18th 2008.
The strong AUD performed gains against almost all the major currencies after the employment in the South Pacific nation unexpectedly rose in April. The AUD climbed to a seven month high against the USD and the JPY. It reached the 74.00 level against the JPY, which is the highest since November 2008 and gained for a 5th day versus the USD.
GBP/CHF
Since the 28th of April, the GBP/CHF has been moving inside a bullish trend channel. It has reached the highest level since April 15th. The market seems to be in a recovery phase. If the pair breaks through the 1.72 resistance line, it could rise further towards the possible resistance level at 1.73.
GBP/AUD
At the end of December 2008 the GBP/AUD ended the long-term bearish phase by crossing the trend-channel. Afterwards the recovery phase resisted at the 2.3 level. Today the market broke through the support line at 2.0230, which is the lowest level since April 1997. If the market extends the break clearly, it may be a sign for further bearish movements.
