Good morning from Hamburg and welcome to the Daily FX Report. It could become very interesting how China will react on the U.S. tariff for imports and if the USD will get under pressure. However, we wish you a prosperous trading day.
Market review
The EUR/USD strengthened to a nine-month high at 1.4645 on concerns that German’s investors confidence rose to the highest level in more than three years, a report may show today. The USD also declined to a year-low against the CHF as the Fed of San Francisco President said that policy makers must guard against inflation becoming too low rather than too high. On Monday the European Commission updated its economic forecast and raised the expectations to 0.2 % in the third quarter and 0.1 % in the fourth. For the full year the commission expects a four percent drop. An U.K. report, which said that the national housingmarket slump will resume next year as the squeeze on mortgage lending persists, bonded the GBP and in order of this, the EUR/GBP rose to 0.8823 at its highest level and the GBP/USD weakened to 1.6569 at its lowest level. The CAD/USD fell the most in September as the second consecutive day-losses in crude oil, the nation’s largest export, dimmed the appeal of commodity-linked currencies.
GOLD
The precious metal has been trading in a bullish trend-channel during the September and touched its highest level around the 1010.00 level. As long as the resistance at 1009.63 won’t be sustainable cross we may have to allow further profit takings. If the upward trend will also break it may boost the bears and could pull the price near to its support at 984.94. The contracting ADX and DMI may further indicate for a sideways movement.
GBP/CAD
The GBP/CAD failed to break through its resistance at 1.8100 while the last bullish phase. Now it seems that the currency pair tries to build a basement around the 1.8000 level to start a further attempt to cross its resistance. The increasing Momentum indicator in considering of the contracting Bollinger Bands may also denote an upcoming bullish movement.
