Good morning from Hamburg and welcome to our Daily FX Report. Also the second attempt to rescue one of the big three U.S. automaker seems to be unsuccessful and unsettle the markets around the world. However, we wish you a prosperous trading day.
Market review
The JPY declined versus a basket of major currencies after the Nikkei 225 Stock Average fell and Japan’s retail sales weaken for the eighth month in April as worsening job prospects and declining wages. The retail sales slid 2.9 % from a year earlier and 3.8 % in March, the Trade Ministry said today. In the early Tokyo trading hours the EUR/JPY rose 0.59 % and the USD/JPY increased 0.52 %. The U.S. economy will already be back on the expansion course next quarter, evaluate 74 % of the economists, which were asked in a survey of the National Association for Business Economics. Further assistance got the USD as the Treasury Secretary Timothy Geithner said, “The national economy is showing some initial signs of stability, confidence is improved, the financial system is starting to heal and credit is starting to ease a bit”. The EUR/USD extended its previous day-losses and fell 1.14 % to 1.3825 at its closing. The German consumer prices declined in April unexpectedly, and calculated by an EU harmonized method, the prices fell 0.1 %. It was the first annual drop since 1996. The AUD rose toward a sevenmonth high against the USD on optimism that the global recession will ease and due to this fact, the demand for higher-yielding assets will increase. The AUD/USD climbed yesterday to 0.7791 at the highest level. The AUD is the best performer versus the USD this month.
EUR/CHF
The EUR/CHF has been trading like a zigzag-course since the beginning of April. At least the currency pair failed to brake through its second resistance pivot point and rebounded. After crossing the S1 pivot point at 1.5115, the RSI indicator showed an oversold market as well as on May 15th, which could mobilize the bulls again.
CAD/JPY
Since a hammer heralded a trend-reversal on May 15th, the CAD/JPY has been trading near to an upward trend-line, which is still faultless. Now it remains to see, if the bulls have enough power to brakes through the important resistance at 85.89. Though the MA Oscillator could indicate first profit takings.
