Good morning from beautiful Hamburg and welcome to the first Daily FX Report of this week. We hope you enjoyed your weekend and you will start relax and successful into this new and interesting trading week.
Market review
The EUR strengthened versus the USD and JPY on growing optimism that the global economy is recovering from the recession and easing demand for the currencies as a refuge. Economists caused this with better than expected economic data. The Sales of existing U.S. homes rose to the highest level in almost two years, with a gain of 7.2 percent the biggest since the records began in 1999. Also the on Friday announced data of the German manufacturing index boosted the 16-nation currency. The index climbed unexpected to 54.1 from 48.1 in July. A reading above 50 points indicates an expansion. The GBP fell to the lowest level within four weeks against the EUR after the minutes of the BoE showed that its Governor Mervyn King wanted a bigger assetpurchase program to revive the economy. “The recovery story in the U.K. is priced into the pound, while European data can surprise to the upside”, said Marcus Hetting, foreign-strategist at Credit Suisse AG in Zurich. The AUD extended its gains in the early Tokyo trading hours as futures indicated for rising Asian stocks, which may boost investors’ appetite and the demand for higher-yielding assets. The NZD/USD increased from 0.6825 at its opening to 0.6874 at its highest level.
EUR/USD
The EUR/USD has been trading in a slight bullish environment but recovered in the last three month always after triggering the first pivot resistance level. Now it seems that the youngest bullish trend could extend, in considering of the rising ADX indicator and the climbing +DMI. The next resistance may be at 1.4453 rather on the downside the next support at 1.4249 and 1.4122.
AUD/NZD
As you can see, the currency pair boosted plunged down from its long-term bearish trend-line after a S+H+S formation heralded a further trend-reversal and broke through its important support level at 1.2342. Now it remains to be seen if the youngest pludge will continue while the ADX indicator may suggest that on this low level the bulls entered the market again.
