Good morning from beautiful Hamburg and welcome to our Daily FX Report. Yesterday, Germany won the Football 2009 European Championship U-21 and is holding now all three youth European Championship’s at the same time, hopefully a good sign for the World Games in South Africa 2010. However, we wish you a prosperous trading day.
Market review
On Monday the USD declined against a basket of major currencies on speculation that a U.S. report may show that the consumer confidence increase to a multi-month high today, which may boost the risk appetite and increase demand for higher-yielding currencies. The EUR/USD rose from 1.4053 at its opening to 1.4082 at its closing and gained in the early Tokyo trading hours 0.24 % further. This is the fourth daily gain in a row. The EUR was supported on concerns that a member of the ECB-council may signal today that the bank will refrain from cutting interest rates at its next meeting. Additionally, the index of executive and consumer sentiment in the 16-nation zone rose more than expected from 70.2 in May to 73.3, said the European Commission yesterday. Likewise the report from the U.K. showed a climb by 2 points to minus 25, the strongest level since April 2008. The GBP strengthened 0.24 % versus the USD and 1.21 % against the JPY. Japan’s unemployment rate rose to 5.2 %, a five-year high in May, from 5 % a month earlier. The AUD and NZD gained versus the USD, heading for their best quarter since at least 1985, as optimism the global recession is easing. The AUD/USD increased 0.21 % and the NZD/USD 0.78 %.
CHF/JPY
The currency pair traded in a bearish environment and triggered thereby its lowest monthly level. Henceforward, the CHF/JPY recovered and climbed over its S1 pivot point and broke also through all Fibonacci fans at least. Now it remains to be seen if the CHF could defend the level above the upper fan. Should that be the case, it could rise up to the S1 pivot point at 89.49.
GBP/JPY
The GBP/JPY broke through its bearish trend-line and a long legged doji heralded a trend reversal last week. This point marked the new support line at 154.70. Now it remains to be seen, if the bulls will be strong enough to breach the next resistance at 160.48 as well. On the other hand side, the RSI indicator shows an increasing risk for profit takings.
