Good morning from sunny Hamburg. We hope you have enjoyed your weekend and could start relaxed and well informed into the new trading week by our Daily FX Report. This week the rate decision in Europe will be at the centre of the FOREX market interest.
Market review
The USD rose for the first time in three days versus the EUR and also 14 of the 16 major currencies, after China’s central bank Governor said yesterday, that the nation’s “foreign exchange reserve policy is always quite stable”. Notwithstanding the International Monetary Fund said at least on Saturday that China renewed its call for a new global currency. “The USD will keep its role as reserve currency” said Koji Fukaya, a senior currency strategist at the Tokyo Unit of Deutsche Bank AG. The losses in EUR may be moderated on speculation that a report may show today that the European consumer confidence improved, which increase the probability that the ECB will keep its main interest rates unchanged this week. Today Japan’s Trade Ministry announced that the industrial output rose 5.9 % from a month earlier, the same pace as like in April, which was the biggest gain since 1953. The GBP/JPY released its Friday gains again and fell in the early Tokyo trading hours 0.17 %.
New Zealand’s exports strengthened 5.8 % from a year earlier and narrowing the annual trade deficit to the smallest in more than five years. Nevertheless, the NZD weakened against the USD and also against the AUD as Japanese retail sales declined and the industrial output increased less than economists expected.
EUR/JPY
In the middle of June, the currency pair slumped down and fell to 131.43. This level designated its new support level. The youngest recovering may lose ground in considering of the contracting Bollinger Bands and the negative Momentum Indicator, which could indicate an anew trend reversal.
EUR/AUD
Since more than one month, the EUR/AUD is struggling against a long-term bearish trend-line. And the currency pair was able to defend its pivot point last week. Now it seems that the downward trend may breach if the EUR/AUD could climb over its pivot point this week as well.
