Good morning from Hamburg. As you already know, we have seen a volatile FX market last week. After a strong start yesterday, we probably could experience a more volatile week, expecting a lot of economic data from around the world.
Market review
The USD fell for a second day against the GBP as Asian stocks rose before Goldman Sachs Group Inc. reports its earnings today, spurring investors to increase holdings of higher-yielding assets. Yesterday the GBP/USD recovered to 1.6227 from a low of 1.6034. It trades currently around 1.6290 after it touched its daily high at 1.6302. After stock gains in the Pacific-Zone, the high-yielding NZD gained against 13 of the 16 most-traded currencies. Another reason for its gain could be caused by the comment of Reserve Bank Governor Alan Bollard who said that the nation’s economy is likely to start recovering earlier than many of its trading partners. The NZD/USD climbed for a second day and reached a high at 0.6346, which was the highest level since July 7th. It also climbed against the JPY to 59.00.
The low-yielding currencies JPY and USD fell after the Nikkei 225 Stock Average climbed 2.2 % and the MSCI Asia-Pacific Index of regional shares rose 1.9 %. The S&P 500 Index gained 2.5 % yesterday. Anyway, the JPY fell broadly stronger than the USD after the greenback climbed for a second day by touching a high at 93.16. It started the week at 92.43 and touched a weekly low at 91.74.
GBP/JPY
As you can see, the volatile GBP/JPY has been coming back from its low at the lower Bollinger band and is trading close to its resistance level at 152.00. It has already crossed the middle Bollinger band. If the market goes also through the 152.00 resistance, it could recover towards the upper Bollinger band and end the bearish phase, which consists since the end of June.
GBP/CAD
Since the end of June, the weekly pivot points seem to be a significant indicator for the GBP/CAD. After the market touched the middle pivot point from last week close to the 1.90 level, it pulled back and touched the 1.8650 support level, which is near its first pivot support of this week. If the market leaves its bearish phase, it may rise towards the 1.8842 pivot point.
