The GBP/JPY has been gaining along a bullish trend line

Good morning from Germany and welcome. Economic data from Far East and the U.S. as well as the situation in Europe may be the responsible for the FOREX market movements today. We should be curious of further economic data that get released today.

Market Review – Fundamental Perspective

The JPY fell for a second day versus the EUR as signs that the global economy is recovering reduced demand for Japan’s currency as a refuge. The JPY dropped versus 11 of its 16 major currency crosses as Asian stocks gained and economic data pointed to improving employment in Australia and the U.S. The MSCI Asia Pacific Index of regional shares gained 1.2 percent, which supported demand for higher-yielding assets. According to the statistics bureau in Sydney, Australian employers added 33,700 jobs in April while economists expected a rise of 22,500. According to a separate survey, the U.S. initial jobless claims that will be published today fell 4,000 to 440,000 last week. The NZD gained for a second day versus the JPY after New Zealand’s manufacturing index increased to 58.9 in April from 56.7 in March. The index reached its highest level since December 2004. The JPY fell for a second day versus the EUR after it reached a level of 118.04 while it traded almost unchanged versus the GBP. Against the NZD and the AUD, the Japanese currency fell also for a second day, dropping to a low by 83.81 versus the AUD and touching a second daily loss against the NZD after reaching a level around 67.00. Before U.S.’s jobless data today, the high-yielding AUD gained against the USD, touching a high near 0.8990.

Similar movements in the U.S. stock market supported the CAD after the currency gained for a fifth day. The S&P 500 Index gained 1.4 percent, while the S&P/TSX Composite Index gained 1.6 percent. Crude oil June futures (Canada’s most exported commodity), dropped 1.3 percent to 75.38 a barrel on the NYMEX after earlier rising 0.8 percent. Canada sold C$3 billion ($2.94 billion) of three-year bonds maturing in September 2013, drawing an average yield of 2.604 percent. The USD/CAD rebounded from record highs after it fell for a fifth day and reached a low at 1.0163, back from gains of last week as the market reached a level at 1.0745.

Daily Technical Analysis - Our Focus Currencies for Today

GBP/JPY (4 Hour)

Since May 6th, the GBP/JPY has been gaining along a bullish trend line. After touching the resistance level around 139.45 several times, the market reached the “cutter” level between the bearish and the bullish trend line. According to our Stochastic Oscillator, we might expect a continuing upward trend. We might wait until we can see which trend level has been crossed.

Intraday Support & Resistance (4 Hour)

USD/CAD (Daily)

After coming back from its very high resistance level, which was touched last Thursday, the USD/CAD has been falling for the past five trading days. It crossed the support levels around 1.0300 and 1.0215 before it reached its current price. The aggressive loss with the breaks might be a signal for further falls along the bearish trend support line.

Intraday Support & Resistance (Daily)

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