Good morning from cold Hamburg and welcome to our Daily FX Report. Yesterday’s rate decisions of the BoE and ECB proceeded without any big surprises. Anyway, we wish you a successful trading day and hope you have a nice weekend.
Market review
The GBP slid against the USD by 0.87 %, the lowest level this month, as traders speculated that U.K.’s Prime Minister Gordon Brown was poised to resign. Due to this fact, the GBP declined versus the EUR to 0.8625 at its lowest level. The Bank of England left its key interest rate at a record low at 50bps for the fourth month and continued its plan to purchase bonds as expected. Also the European counterparty, the ECB, decided to leave its key interest rate at its current level at 1.00 % and indicated that there are no immediate plans to increase the asset-purchase plan or cut interest rates further. The President of the ECB said on a following press conference in Frankfurt “We have decided to embark on a 60 billion EUR purchase of covered bonds, full stop” and that the interest rates are “appropriate”. Furthermore, the ECB expect that the economic performance will still improve this year. While the JPY headed for the third weekly loss against the EUR before a U.S. report may show that the employers cut fewer jobs than last month. The EUR/JPY rose 0.76 % to 136.97 and the USD gained 0.62 % versus the JPY.
The CAD strengthened near to an eight-month high as the nation’s central bank said that financial conditions “improved significantly” and the increasing crude oil assists the commoditylinked CAD as well. The USD/CAD fell 1.20% to 1.097.
GBP/USD
Since the middle of May, the currency traded in a bullish trend-channel and pointed on June 2nd its highest level. After that, the GBP/USD recovered, fell close to a downward trend-line and lost its support at the lower trend-line. It remains to be seen, if the next support, located at the 61.8% Fibonacci retracement-line, could be strong enough to stop the bears. The MA Oscillator suggests a declining pressure on the downside.
AUD/NZD
The AUD/NZD traded close to a bearish trend-line since the 19th of May until June 1st. A hammer heralded a trend-reversal. In order of that, the currency pair broke through the bearish trend-line and touched its resistance at 1.2738. It depends on whether the bulls have enough power for a further attempt. If not the risk on downside, considering of the crossing MACD indicator may grow up again.
