Welcome to our Daily FX Report. It seems to be the last summer day for Hamburg at this year. Done again, falls in Asian stocks caused falls in JPY crosses. Investors are showing more concern for low-yielding currencies to use them as a refuge.
Market review
The JPY climbed against the USD and the EUR while drop in stocks boosted demand for lowyielding currencies. The JPY increased versus all 16 most-traded currencies after Japanese stocks fell and government figures showed the nation’s current-account surplus was less than expected. The JPY climbed versus the AUD for the first time in five days while the Shanghai Composite Index fell as much as 1.7 percent and Japan’s Topix Index dropped 0.4 percent. The GBP fell versus the JPY for a second day on expectation the BoE will expand its asset-purchase program this week, which would be a sign of a sluggish economic recovery. The USD fell almost to its lowest level in a year against the AUD on speculation the FED officials will signal that they plan to hold down interest rates this week, which would boost demand for USD carry trades.
Yesterday, the AUD/USD climbed to a high of 0.8577, which was the highest level since September 22nd 2008. The GBP/JPY fell for a second day to 151.68 after opening at 152.18. The USD/JPY also fell to 92.80 which could be a recovery to its lowest level from July that was already touched last week. The AUD fell for the second day in September against the JPY to 79.32 after opening the day at 79.65.
EUR/JPY
Since the beginning of August the EUR/JPY has been trading under a bearish trend line. It is the sixth time that the market is touching the trend line before pulling back to the downside. In addition the market seems to pull back after touching the upper Bollinger band for the first time since August 20th. If the MACD confirms the trend reversal, the market may fall towards the lower Bollinger band.
EUR/GBP
During the past two months, the EUR/GBP has been moving along Fibonacci retracement lines and a bullish trend line. After touching the upward green trend line at the beginning of September, the market crossed the 76.4% Fibonacci retracement line. This could be a sign for more gains towards the Fibonacci resistance line of 100% at 0.8642.
