Good morning from Hamburg and welcome. We have reached the end of the week again and we have seen a very volatile and risk full FOREX market. Nevertheless we hope you had a successful trading week and wish you a nice weekend.
Market review
The EUR rose close to a one-month high against the USD after the ECB cut interest rates by 25 bps to 1.00%, which is a record low. Another reason for the gains in the EUR/USD could be a report which will show that employers cut jobs at a slower pace in April economists said. That could decrease demand for the USD as a safe haven from the global recession. The EUR/USD rose 56 pips yesterday after it touched a high of 1.3470, which was the highest level since April 4th.
The strong EUR also gained against the JPY as the yield spread between Japanese and German 10-year notes expanded to the widest in three months. This happened after the ECB decided to buy covered bonds to reduce yields. The EUR/JPY rose 0.30 to 133.11 after touching a high of 133.57 yesterday, which was its highest level since April 14th.
The JPY fell this week against 15 of the 16 major currencies and touched a seven-month low against the AUD, on speculation demand for higher-yielding assets will increase. The AUD climbed to 74.82 against the JPY, extending this week’s gains to 3.3%. The NZD/JPY rose 4.2 percent this week.
GBP/JPY
Since the beginning of the year the GBP/JPY has been trading in a bullish phase. After breaking the lower line of the trend-channel, the market touched the support line of 1.40, pulled back and reached the 1.50 resistance for the second time. If the market doesn’t break the 1.50 resistance and enter the channel, it may rebound back toward the 1.40 support level.
AUD/NZD
Since the end of October 2008 the AUD/NZD has started an upward trend inside Fibonacci Projection lines. During the past six weeks the pair has been trading in a trend channel. It’s currently trading on the lower line of the channel. If it breaks that line, it may fall further to the next Fibonacci line of 76.4% at 1.2397.
