Good morning from Hamburg and welcome to the last Daily FX Report in May. The flood of important economic data and news will be continued today and may keep the volatility on a high level. However, we wish you a successful trading day and have a nice weekend.
Market review
The JPY recovered today from a two-week low against the USD and gained also versus the majority of the 16 most-traded currencies. The JPY increased against the USD 0.53 % and against the EUR 0.25 %, after a Japanese report showed that the industrial output rose by the most in six years. The production climbed in April to 5.2 %, while economists only expected 3.3 %. The advancing jobless rate in Japan, which increased to 5 %, was widely ignored. “The strong output data raised expectations for raises in capital inflow into Japanese assets”, said Masashi Hashimoto, a senior foreign exchange analyst at Bank of Tokyo-Mitsubishi UFJ Ltd. The GBP slid against the EUR yesterday about 0.91 %, having a U.K. report showed that the retail sales fell in May, a sign that the recession may not be easing yet. The NZD benefits from Standard & Poor’s adjudication to raise the outlook on New Zealand’s sovereign debt rating to “stable”. The NZD/USD climbed from 0.6144 at its opening to 0.6232 and thus, the AUD extended its gains versus the USD and rose 1.07 %. The CAD strengthened as crude oil touched on Thursday a six-month high, which boosted the demand for commodity-linked currencies and higher-yielding assets. The USD/CAD weakened from 1.12311 to 1.1107 at its lowest level.
AUD/JPY
Having the currency pair failed to cross its resistance at 75.90 on May 11th, it recovered to the 71.00 level. At this low level, the bulls enter the market and pushed the AUD/JPY again to the 75.90 resistance. Now it could remain and look if this level could be crossed sustainable. On the downside a strong support seems to be at the second Fibonocci Fan. The MA Oscillator remains furthermore on its high level.
USD/CAD
Since the middle of May the USD/CAD was under considerable strain and fell close a bearish trend-line to its support at 1.1100. It remained to test if the support will be strong enough to stop the long-term downward movement, especially considering of a sliding Momentum indicator. If the currency pair even may not break the trend-line it could be the beginning of a trend-reversal.
