Good morning from Hamburg and welcome to our Daily FX Report. Today in Germany we have a public holiday, which is called “Father’s Day”. Thus, we would like to congratulate all fathers around the World and wishes a prosperous trading day.
Market review
The JPY gained against all 16 most-traded currencies and rose versus the USD to an eightweek high. The crucial factor was the speculation that the Federal Reserve will boost purchases of assets to counter the global recession, which increase the demand for the JPY as a refuge from the international slump. Relatively unappreciated was the fact that Japan’s demand for services fell at the fastest pace in 12 years, a report showed today. Yesterday the USD/JPY declined 1.14 % and extended its losses in the early Tokyo trading and fell further 0.33 % to 94.57. The EUR gained also against the USD and strengthened to the highest level in more than three month. Yesterday the EUR/USD rose to 1.3830 at its high. As well the GBP utilized the weakness of the USD and broke through its 200-day moving average. In order of this, the GBP/USD climbed on Wednesday 1.79 % to 1.5748 at its closing. An industry report showed that the U.K. manufacturers were the least pessimistic on the outlook for production in eight months in May.
The AUD rose versus the USD for the fourth day in a row, as gold prices increased, due to the fact that Australia generates around 60 % of its exports with commodities.
GBP/USD
Since the end of February the currency pair has been trading in a bullish trend-channel and boosted its upward movement yesterday. At the cone point the GBP/USD crossed the resistance at 1.5724 and rose up to the highest level in more than six month. Though the RSI Indicator suggest that the market may be overbought and you may have to bargain for a short-term adjustment.
EUR/USD
Yesterday the EUR/USD boosted its bullish movement and climbed near to the upper trend-channel line. Thereby it breached the important resistance at 1.3751 and if it won’t pass this line again, could it support the currency pair to continue the bullish trend. Even the RSI give the bulls a small leeway to aim for the next resistance points at 1.3915 and 1.4058.
