Good morning. Today we will inform you about a strong JPY and USD. Negative data in china made low-yielding currencies more attractive, after investors used both currencies as a safe haven. We wish you a nice day and success in trading.
Market review
The JPY climbed against all major currencies after a report showed that the Chinese industrial output grew less than expected and exports fell, making Japanese currencies more attractive as a safe haven. China also reported that producer and consumer prices dropped both. Consumer prices fell 1.8% while the producer prices slid 8.2 percent. Exports in China fell 23 percent from a year earlier, the report showed. The USD/JPY fell for a second day after it touched a low at 96.56. It opened the week at 97.56 and trades currently around 96.70. The JPY also climbed against the EUR. Today, the pair reached a low at 136.46 while it opened at 137.36. It started the week at 138.42, which was almost the highest level since the middle of June.
The EUR/USD dropped below the 1.4150 mark after ECB council member Erkki Liikanen said “the recovery in the Euro-Zone will take more time”. Yesterday the EUR/USD extended its losses and dropped to a low at 1.4105, which was the lowest level since the month started. The EUR could make further losses before a German report may show that wholesale prices fell for the 9th month, economists say.
EUR/USD
Since the middle of June, the EUR/USD has been trading inside a bullish trend channel. After it touched the first monthly resistance pivot point (Pivot R1 (M)) at 1.4430, it pulled back to the middle Pivot point at 1.4131, which is close to the lower line of the channel. If the market breaks the middle pivot point and the lower line of the channel as well, it may aim the first support pivot line at 1.3959.
EUR/GBP
As you can see, the EUR/GBP is trading around the resistance line at 0.86. It pulled to this level after it touched the downward trend line, which starts around the middle of May. The MACD lines didn’t cross each other yet, but they are touching each other already. If the pair crosses the 0.86 resistance level sustainable, it could boost the bulls and may lead for further gains towards the next resistance around 0.87.
