Good morning from sunny Hamburg and welcome to our Daily FX Report. For one more time the U.S. consumer surprised the World’s economists and increased the hope for a faster recovering from the global recession. We wish you a prosperous trading day.
Market review
The GBP climbed versus the EUR on speculation that U.K.’s banks may survive the financial turmoil better than their counterparts in the rest of Europe. The president of the banking regulator BaFin, Jochen Sanio, said in an interview that the debt levels at German banks will blow up “like a grenade” unless they participate in a government plan to strengthen the financial system. Yesterday the EUR/GBP declined 0.33 percent from 0.8809 to 0.8780 at its closing. The U.S. consumer confidence index surged in May by the most in six years to 54.9 points. That was probably a reason why the USD pushed the EUR below the 1.40 level, to 1.3948 at its lowest point. The JPY fell against 15 of the 16 most-traded currencies before a report may show today that the home sales in the U.S. rose to 5.02 million annualized from 4.93 million in March. Japan’s exports weaken with the slowest pace this year and adding the signs the worst recession since World War II is easing. The AUD benefits from the upcoming hope, that the global recession may be over faster than economists expected incipiently. Australia’s index of leading economic indicators rose in March for the first time in seven month from 247.2 points to 247.9. The AUD/USD climbed to 0.7862 from 0.7821 at its opening. The NZD/USD declined 0.42 percent, as the world’s largest dairy exporter, Fonterra Cooperative Group, cut its forecast for milk prices.
GBP/CAD
After the currency pair has been trading in a bullish trend-channel since the middle of May, it breached the lower support line with a long packing doji, which heralded a trend reversal and as a result the GBP/CAD fell near to its support at 1.7752. At this level the Momentum Indicator recovered and if the support-line will hold, it could be a sign for rising movements. In this case it remains to be seen if the bearish trend-line could cross.
NZD/JPY
On May 18th a doji with a long roving launched a long-term bullish trend-line. In the following the NZD/JPY breached its resistance-level at 57.77 and aim now for the 59.17. If this resistance could brake sustainable as well, it may boost the upward trend. On the other view, the RSI stays on a comparative high level which increases the risk for a countermovement.
