Good morning from Hamburg and welcome. Weak shares and expectations of more Bank stress tests around the Euro-Zone affected the FOREX market yesterday. Nevertheless the hopes of an economic return and more confidence are still there. Have a nice trading day.
Market review
After declines in the stock market spurred demand for the relative safety currencies, the JPY rose for a second day versus the EUR and climbed against the USD. The MSCI Asia Pacific Index of regional shares fell 0.8 percent after earlier rising as much as 0.4 percent. The Nikkei 225 stock Average declined 1 percent. The strong JPY rose against all the 16 major currency pairs, after a report showed that the U.S. president Obama administration want the Europeans to put their banks through more rigorous stress tests. It showed that U.S. Treasury Secretary Timothy Geithner is likely to discuss stress tests for European banks at a meeting of finance ministers from the Group of eight nations in Italy this week. Standard & Poor cut Ireland’s credit rating for the second time this year. It lowered the rating to AA from AA+. That news raised concern about the strength of the banking system in the Euro-Zone and the EUR fell against the JPY for a second day and reached a low at 135.70. The EUR also fell versus the strong USD for a third day, touching a low at 1.3806, which is the lowest one since May 28th. Another reason for the strong USD may be the expectation that the Federal Reserve will increase interest rates this year. Yesterday the USD-Index climbed 0.2 percent to 80.963 after rising to its highest level since May 20th.
USD/CHF
As a short-term view we can see how the USD/CHF has been moving along the weekly pivot points. The first resistance of 1.0978 seems to be stable after the market pulled back after once it touched the line. If the USD is strong enough to cross over this line, the market may climb further towards the next pivot resistance of 1.101.
USD/CAD
As we can see the USD/CAD has been trading inside of two downward trend channels during the past six months. The market is now trading between the lower line of the green and the upper line of the red trend channel. The MACD and the Bollinger bands are signalizing a bullish market, so it could break the upper line of the red trend channel and rise towards the resistance of the green one.
