Good morning from beautiful, thundering Hamburg and welcome to the last Daily FX Report of this week. If we’ve a look at the world stock markets at the moment, it’s inspiring the impression that lots of economists are differing about its expectations regarding the worldwide recession.
Market review
Yesterday the central bank of Russia announced that the national foreign reserves fell $2.8bln after the EUR increased to the highest level in almost five month against the ruble. “There was a sell-off on August 12th and it seems the central bank was intervening a lot” said Tatiana Orlova, ING Group in Moscow. The JPY strengthened versus all of its 16 major counterparts as the Nikkei 225 stock index fell 0.7 percent. The AUD and NZD also declined against the JPY having Moody’s Investor Service said today that the Australian state and territory budgets are under pressure from declining revenues while spending remains relatively high. The USD/JPY weakened in the early Tokyo trading hours from 94.20 to 93.48 at its lowest level and also the EUR/JPY is easing and fell from 134.26 to 132.98. A U.K. report showed yesterday that the national government debt climbed to 801bln GBP, in other words 56.8% of the gross domestic product. This is a higher level as when the U.K. received an International Monetary Fund loan in 1976. The EUR/GBP rose from 0.8607 to 0.8643 and extended its gains this morning to 0.8651. The CAD touched a weekly high against the USD after Goldman Sachs Group Inc. advised purchasing the currency.
EUR/JPY
The currency pair lost in a recovering phase after it lost the support of its bullish trendline last week. The EUR/JPY fell down to its next support level at 132.30 wherefrom it tried to quit its bearish movement and rose for several times to its resistance at 134.52 but it failed. If the EUR/JPY will break through the first Fibonacci Fan again it may boost the downward trend anew.
NZD/JPY
The NZD/JPY traded since the beginning of July close to a bullish trend-line until it lost this support last week. Since that time the currency pair has been trading in a bearish trend-channel and now it remains to be seen, if the pivot point may strong enough to moderate the downward movement. An argument against could be the declining Momentum indicator, which crossed its MA and approximate its zero level.
