Good morning from Hamburg, everything seems fine after the Fed statement. But Warren Buffet said the US may need a second stimulus package as unemployment will continue to rise.
Market review
On Wednesday the USD gained against the JPY 0.5 % and against the EUR even 1.1 %. The main support for the greenback was given by the Federal Reserve Open Market Committee; because it left interest rates unchanged as expected but removed the warning that inflation could be undesirably low. Additionally, the Fed refrained from increasing its $1.75 trillion bondpurchase program, because the pace of economic contraction is slowing. The USD got an additional support from durable goods, which unexpectedly rose in May.
In the early Tokyo session the JPY lost ground against the EUR and the USD, because a government report today sowed Japanese investors bought more overseas assets than they sold for a seventh week. The JPY declined 0.4 % against the USD to 96.09 and 0.5 % to 133.93 against the EUR.
Yesterday the CHF dropped the most in more than three months on speculations the Swiss National Bank sold their currency to curb the recent gains. The CHF slid as much as 2.4 % versus the EUR and 3.3 % against the USD. Six days ago the SNB President said that policy makers will act to curb any “irrational appreciation” of the franc. A trader said that it looks like the SNB directly or one of their agents, a multilateral bank, buying on a grand style EUR selling CHF.
AUD/NZD
Since the middle of June, the AUD/NZD has been trading in a downward trend channel. But for now the pair stopped the movement at the support level and rebounded to the upper duct line. Simultaneously, the MA Oscillator is on the way to cross clearly the signal line. If the support level at 1.2393 is strong enough, the AUD might stop the bearish trend and could leave the trend channel formation.
GBP/CHF
Yesterday, the GBP/CHF rose from the lower part of the trend channel to the upper limit. In contrast to the movement at the beginning of the month, the pair couldn’t leave the trend formation. Also we could see long wick in the candels and a smaal doji package, what could indicate a overbought market and a trend reversal. Additionally, the RSI crossed the 70 level.
