Market review
The USD dipped to a seven-week low versus the EUR after the Chinese government reports that the worst of the global economic recession is over, which decrease demand for the USD as a safe haven. China’s retail sales climbed 14.8 % in April from a year earlier, after rising 14.7 % in March. The EUR/USD rose for a second day and touched a peak at 1.3722, which was the highest level since March 23rd. Gains in the EUR could continue before a European Union report today may show the contraction in industrial production slowed in March, signalizing the recession in the Euro-Zone is easing. The USD also fell to a two-week low against the JPY as David Walker, former U.S. comptroller general, commented that the nation’s AAA credit rating may be cut. The USD/JPY fell for a fourth day and reached a two-week low at 95.79.
The JPY fell against the EUR after the Nikkei rose on optimism the global economic recession could be over as the world’s third biggest country China reported good news. The EUR/JPY rose to 131.86, recovering from losses during the past two days. The JPY also fell against the AUD, pulling back over the 74.00 mark.
GBP/USD
After finally breaking the bearish resistance line, the GBP/USD has started to trade inside an upward trend channel. It is moving in a “zigzag” formation and has already touched the upper line of the channel for the fourth time. If the market does not break the upper resistance line of the channel, it may pull back to the lower line.
EUR/USD
On a short-term view the EUR/USD has been trading in Fibonacci projection lines. After it finally crossed the 61.8% level last week, the pair rose above the 74.4% and reached the 100% line at 1.3720. If the EUR is strong enough and would break the 100% level again, it may reach the next Fibonacci profit target of 123.6% at 1.3916.
