The USD/JPY traded at 101.64 and the EUR bought 138.65 JPY

Good morning from rainy Hamburg and welcome to our second last Daily FX Report for this week. In the semi final of the Fifa World Cup Argentina has beaten the Netherlands 4-2 on penalties after no goal has been scored in the extra time of an defense-dominated game. So on Sunday in the final Germany will play against Argentina. On Saturday Holland is going to play against Brazil for the third place.

However, we wish you a great trading day!

Market Review – Fundamental Perspective

Yesterday the Dow Jones Index of shares climbed 0.5 percent and the Standard & Poor’s Index also increased 0.5 percent. Yesterday the minutes from the Federal Reserve’s last meeting have been released but failed to provide additional insight on the speed of future interest rate roses. According to the officials policy depends most on the evolution of the economic outlook. They agreed to monitor markets for signs of froth and only if necessary to take measures to address excessive risk-taking and associated financial imbalances. The asset purchases of the FED will probably come to an end in October this year. As a result the EUR advanced 0.2 percent for a third day against the USD to 1.3642. The USD/JPY traded at 101.64 and the EUR bought 138.65 JPY.
Yesterday Mario Draghi said in his speech in London that euro zone states should respect their joint fiscal rules and extend their cooperation to economic reforms, and urged governments to learn to govern together. He repeated again his message that the ECB is ready to use unconventional instruments if needed, like for example large-scale asset buying. He also added that high debt made countries more vulnerable in the event of financial shocks. In addition euro zone states may be able to achieve the mutual trust that is a pre-requisite for intergration in other areas if they show the willingness to respect common fiscal rules. Beyond that ECB’s top financial supervisor said that plans to complete bank safety checks are running according to plan. The ECB’s Single Supervisory Mechanism is preparing to oversee around 120 banks as the leading European watchdog from November 4.
Today the Bank of England is going to release its interest rate decision and economists forecasted that the rate will remain unchanged at 0.5 percent. Today also U.S. initial jobless claims and continuing claims are going to be released.

Daily Technical Analysis

EUR/GBP (4 Hours)

Since June 25 the currency pair dropped immensely close towards a two year low at the support line around 0.7901 below the lowest channel of the fan. Afterwards it succeeded to enter a bearish Fibonacci fan and is recently moving inside the upper channel of the fan. Both the moving average and the Stochasstic are indicating further losses inside the fan.

Support & Resistance (4 Hours)