Good morning from beautiful Hamburg and welcome to the last Daily FX Report of this week. The stock markets scaled again new highs as a very well ongoing report season and increase investors risk appetite around the world. However, we wish you a nice trading day and weekend.
Market review
The JPY rose in the early Tokyo trading hours against the EUR to 133.82 after it weakened yesterday against a basket of major currencies. Activators for the JPY gain were speculations that Japanese exporters bought JPY to convert their overseas earnings before the weekend. The GBP/JPY rose 1.27 % to 156.42 and even the USD/JPY rose 1.33 % to 94.92. The EUR/USD weakened 0.54 % as a U.S. report showed that Sales of existing homes climbed in June for the third consecutive month and signaled that the financial crises is ending. Purchases climbed 3.6 % to an annual rate of 4.89 mln, the highest level since October. Economists in Germany expect that the business confidence will strengthened for the fourth month in a row, as the IFO report may show today.
The AUD and NZD rose against the USD after the S&P500 Index rose to an eight-month high and increased investor demand for higher-yielding assets. Also the CAD climbed and touched its highest level versus the USD since more than seven weeks, as the BoC said the country’s recession is ending amid rising commodity prices and consumer confidence.
GBP/CAD
The currency pair rose to a one-year high on June 30th, until a bearish V-formation signalized a trend-reversal. In order of this, the GBP/CAD got under pressure and went down near to its support at 1.7925. At this level the RSI indicator showed an oversold market and assists the bulls to stop the trend. Now it remains to see, if this support will be strong enough to push the GBP/CAD to the next resistance at 1.8203.
NZD/USD
Having the NZD/USD traded in a bullish environment, it couldn’t defend the level above the resistance pivot point 1 at 0.6574 and rebounded. A rising –DMI and an ADX above 25 pts could suggest a continuing bearish trend and the next important pivot support is located at 0.6386. On the other hand, if the currency pair could climb over the R1 again, it could boost the bulls again.
