The United States and China agreed on a broad framework of cooperation and “laid the foundation for a positive, cooperative and comprehensive relationship for the 21st century”
Market review
On Tuesday the GBP/USD fell 0.4 % and the USD/JPY 1.1 % as stocks around the world declined and a report showed the consumer confidence in the US dropped more than forecasted. The GBP slid from near a three-day high against the USD as the Conference Board released its confidence index fell for a second consecutive month in July. The Standard & Poor’s/ case Shiller report on Tuesday showed US single-family home prices rose in May,the first increase in nearly three years. All in all the data prompted investors to cut long positions in European currencies. Investors remained cautions about the recent run-up in financial markets and any weak data could be a trigger for profit-taking. According to that the EUR/USD declined 0.45 % at 1.4167 after the Deutsche Bank said it set aside 1 billion euros for riskier loans in the second quarter, much more than analyst had predicted. The EUR/JPY dropped more than 1.1 % to 133.95 and the EUR/AUD lost 0.9 %.
In the early Tokyo trading session the JPY fell versus 13 of 16 major currencies as signs the global recession is easing and investors are more interested in higher-yielding assets. The AUD/JPY traded near a six-week high at 77.97 after the yieldadvantage of two-year Australian government bonds over similar-dated Japanese debt remained at a nine-month high of 4.04 percentage points.
CAD/JPY
Since January, the CAD/JPY has been trading in a bullish trend channel. In June the pair left the formation and rebounded back after hitting the resistance at 78.50. However, the CAD wasn’t able to reenter the channel. It seems that the MA Oscillator starts do decrease, what could result in a short signal. We have to pay attention if the MA development will continue and if the MA is going to cross the signal line in the next days.
AUD/NZD
The AUD/NZD is trading in a zigzag movement in a slightly downward trend duct. We could notice a candle stick formation in the daily chart, which is quite similar to one in June. At that time the Momentum reached a high level and afterwards the AUD started to decrease. Now the Momentum reached also a peak by a similar candle stick development. This could indicate an ongoing of the zigzag movement and a soon counter trend near the bottom line.
