Good morning from beautiful Hamburg and welcome to our first Daily FX Report in July. This month starts with a depth of economic data, in special case the rate decision of the ECB tomorrow. However, we wish you a successful trading day.
Market review
Today the JPY declined against a basket of major currencies after the Bank of Japan Tankan survey showed that the sentiment among the largest manufacturers rebounded indeed from a record low but rose less than economists expected from minus 58 in March to 48. The JPY fell against the USD and EUR by 0.44 % rather 0.42 %. The USD extended its gains from yesterday against the EUR in the early Tokyo trading hours on concerns that the unexpected drop in U.S. consumer confidence increase demand for the relative safety of the USD. The economy of the United Kingdom shrank more than previously estimated in the first quarter of 2009. The gross domestic product fell 2.4 % from the last quarter of 2008. Mervyn King, Governor of the Bank of England, said last week that Britain’s recovery from recession may turn out to be “a long hard slog”. Yesterday the GBP/USD weakened 0.66 % and fell to 1.6423 at its lowest level.
The AUD/USD fell in the early Tokyo trading hours notwithstanding that the nation’s retail sales climbed by twice as much as economists estimated in May. The index rose 1 % from April, the statistics bureau said in Sydney today. The Government has given A$12 bln in cash handouts to households to help the nation withstand the global recession.
The CAD slid to the lowest level within six weeks as crude oil slid below $70 and the U.S. consumer confidence fell unexpectedly. The USD/CAD strengthened from 1.1563 to 1.1623.
EUR/GBP
The EUR/GBP has been trading close to a downward trend-line during the last quarter. After the currency pair fell below the 0.8605 level it seems to be stabilize and two hammers within a shortly sequence could denote a trend reversal. But at first it remains to be seen if the EUR could cross the resistance at 0.8605. The MA Oscillator continues its upward trend and could support the bulls.
EUR/CAD
Since April the currency pair has been trading in a bearish environment until a hammer led for the trend-reversal. Due to this fact, the resistance at 1.6202 breached and now it seems that the EUR/CAD tries to build a basement over its new support. Indeed the MA Oscillator tumbled and could denote a test on the downside soon. Should the support level at 1.6202 be strong enough, it could boost the bullish trend.
