Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from a sunny Hamburg and welcome to our second-last Daily FX Report for this week. On Wednesday President Barack Obama said that they plan to fight Islamic State until it is no longer a force in the Middle East and will seek justice for the killing of Americans. He added that destroying the militant group will take time because of the power vacuum in Syria. Beyond that, President Putin outlined plans for a ceasefire in eastern Ukraine but Ukraine’sprime minister dismissed the proposal.
Anyway, we wish you a great trading day!
Market Review – Fundamental Perspective
Yesterday the Dow Jones Index of shares climbed 0.1 percent and the Standard & Poor’s Index weakened 0.1 percent. Also as expected the Bank of Canada left interest rates unchanged at 1 percent after data showed a jump in exports. Officials said that foreign trade must be sustained to trigger broader economic growth. The USD/CAD tumbled the most in a week to 1.0871 before gaining to 1.0888.
A report yesterday showed that new orders for U.S. factory goods posted a record advance in July and therefore offering further signals that the U.S. economy is gaining momentum. Orders for manufactured goods inceased 10.5 percent on robust demand for aircraft and cars, compared to a 1.5 percent gain in June. In addition the MBA mortgage applications advanced 0.2 percent in the past month. In addition data yesterday showed that retail sales in the euro zone weakened more than estimated to 0.8 percent in July. Economists forecasted that today data will show a pickup in U.S. employment, supporting the bets the Federal Reserve will increase interest rates. A report by ADP Research Institute might probably show today that U.S. payrolls rose last month by more than 200,000 for a seventh-straight month. Moreover reports might show today expansion in service industries. The EUR/USD traded at 1.3150 and the EUR bought 137.88 JPY. The USD/JPY was 0.5 percent from its strongest level in almost eight months at 104.90. The European Central Bank faces intense market pressure to take policy action today and risks losing credibility if it does not succeed to back up a dovish message delivered by Mario Draghi. The Bank of England will also today announce its interest rate decision and the market estimated that it will be left unchanged at 0.5 percent.
Daily Technical Analysis
NZD/USD (Daily)
Since the 11th of July the NZD/USD decreased along a long term bearish trend line and touched a six month low around 0.8287. We might expect a continuation of the current trend while the moving average and the MACD still support the bears.
Support & Resistance (Daily)
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