The USD strengthened versus the JPY to 87.12

Good morning from wonderful Hamburg and welcome to our last Daily FX Comment of this week. Surprisingly the concerns of the market over stress-test results of banks in Europe faded away and the debt crisis seem to ease.

Anyways, we wish you a successful trading day and a nice weekend.

Market Review – Fundamental Perspective

Although Ben. S. Bernanke admitted, that the economic outlook continues to be unusually uncertain, the USD strengthened versus the JPY to 87.12. This is largely owing to a report which revealed, that sales of U.S. previously owned homes fell 5.1 percent in June. Economists had predicted a drop of 9.9 percent. Furthermore speculations came up that Japan may weaken its currency to aid economic growth. Japans Finance Minister officially said, that he wants to avoid gains in yen which would have a negative effect on Japan’s export, the engine of the economy recovery. Based on that, the yen decreased against all of its major counterparts.

In Europe a report illustrated, that manufacturing and services industry suddenly rose and the debt crisis eased. In addition to that the market assumes that the results of stress test for 91 banks will not be such as negative as it has been forecasted. As a result of that European stocks increased and the EUR won against the USD after it fell in the past three days. It gained 1.1 percent to 1.2891 and the EUR/JPY also rose from a two-week low to 112.06.

A policy report from the Bank of Canada revealed, that successive interest-rate increases will still continue to take place in the future. This resulted in a rose of Canada’s currency by 1.3 percent against the USD at 1.0356. The CAD already gained 1.9 percent this week and strengthened the most versus the USD in the past two weeks. The AUD rallied near to a twomonth high and was the second-best performer against the USD yesterday. The AUD/USD already gained 6.4 percent in July and traded at 0.8943. The AUD/JPY rose 0.3 percent to 77.93. Based on speculations that the Central Bank of New Zealand is going to raise the interest rate next week, the currency pair climbed against the USD and traded at 72.57.

Daily Technical Analysis - Our Focus Currencies for Today

GBP/NZD (4 Hour)

After the GBP/NZD succeeded to enter the fan the bears took control of it and dragged it below its resistance level around 2.1126. If the pair may reach the resistance level again and could cross the lower line of the fan we might see further gains.

Intraday Support & Resistance (4 Hour)

EUR/GBP (4 Hour)

Since the end of June the currency pair has been trading in a bullish trend channel. We might see further losses if the EUR/GBP fell out of the channel again and move down towards its support level around 0.8373. The Stochastic indicator may support a bearish trend. Intraday Support & Resistance (4 Hour) Support Levels around Resistance Levels around 0.8373 0.8455

Intraday Support & Resistance (4 Hour)

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