Good morning from sticky Hamburg and welcome to the last Daily FX Report of this week. Notwithstanding, the ECB rate decision didn’t hold any surprises but the FOREX market keep on doing very volatile. However, we wish you a nice weekend and a prosperous trading day.
Market review
The EUR fell versus the JPY and the USD for the second day after a U.S. report showed that employers cut more jobs last month than economists expected. The unemployment rate rose to its highest level in almost 26 years to 9.5 % and furthermore the U.S. payrolls dropped by 467,000 in June. Also the unemployment in the European Union increased in June to 9.5 %, the highest level since May 1999. These facts caused an increasing demand for the safety of the USD and the JPY. The EUR/USD and EUR/JPY declined by 0.98 % rather 1.72 %. The European central bank left its key interest rate untouched, decided the ECB-council in Frankfurt yesterday. “The markets are getting a dose of reality after becoming over-optimistic on the worldwide recovery”, said Yuji Saito, head of foreign exchange group in Tokyo of Societe Generale. On Thursday the USD/CHF strengthened 0.86 % because SNB governing board member Thomas Jordan said that officials are ready to intervene to prevent an appreciation of the CHF. Driven by the bad U.S. economic data’s, the CAD fell the most in two weeks versus the USD, on concern that investor’s risk appetite lowering. The USD/CAD rose from 1.1496 to 1.1630 at its closing.
EUR/USD
After rebounded from its peak at the end of May, the currency pair has been trading in a zigzag movement. Today the EUR/USD lost its 38.2% Fibonacci retracement support and enforced the bears. As recently as at the S1 pivot point, at 1.3924, the bulls entered the market again. If the EUR recover again and climb over the 38.2% level sustainable, it could boost the bulls.
GBP/JPY
In June the GBP/JPY lost the support of the bullish trend-line and failed to cross its resistance at 162.60. Since this time the currency pair tested for several times its support at 154.90. Now it seems for an anew rest on the downside in considering of the tumbled Momentum indicator. Should the support line break, it could be the beginning of a strong bearish trend.
