The yen and New Zealand dollar are the next biggest losers

Good morning from Hamburg and welcome to our latest Daily FX Report. A bitter Air France labor dispute deepened on Monday as management pledged to press ahead with its low-cost airline ambitions and pilots said that an eight day-old strike over the proposals would continue indefinitely as a result. The strike has grounded 60 percent of Air France flights and is costing Air France-KLM up to 20 million euros ($25.7 million) a day. Qatar remained adamant it would host the 2022 soccer World Cup despite a FIFA Executive Committee member suggesting on Monday that the tournament would have to move because of scorching temperatures.

Anyway, we wish you a successful trading day!

Market Review – Fundamental Perspective

ECB President Mario Draghi said yesterday that recent indicators haven ́t signaled that the “sharp decline” in the euro area ́s economic activity has stopped. He added that policy makers can implement more stimulus if required to stave off deflation. The central bank lowered its deposit rate to minus 0.2 percent this month. Even after cutting borrowing costs for banks to record lows and offering long-term loans, Draghi is struggling to persuade them to take more ECB cash to finance lending to the real. In contrast to other major central banks, the ECB ́s assets have shrunk by a third since 2012. The euro was little changed at $1.2849 after rising 0.2 percent yesterday. Australia ́s dollar was 0.2 percent from a seven-month low against its U.S. counterpart, while the nation ́s debt rose for a second day as the nation ́s central bank releases its financial stability review tomorrow. It traded today at $0.8871 from $0.8873 yesterday. The AUD dropped 2.5 percent in the past month, the worst performer among the 10 developed-nation currencies tracked by the Bloomberg Correlation Weighted Indexes. The yen and New Zealand dollar are the next biggest losers, falling 2.1 percent and 1.2 percent, respectively. The yen rose 0.1 percent to 108.76 per dollar and traded 0.1 percent higher at 139.74 euro. Japanese markets are closed today for a public holiday. New Zealand ́s dollar held a two-day drop as a private report showed farmer confidence fell to a two year low. It slipped 0.2 percent to $0.8104. The Bloomberg Commodity Index declined yesterday to the lowest level since July 2009 after Chinese Finance Minister Lou Jiwei said growth in the world ́s second-largest economy faces downward pressure.

Daily Technical Analysis

EUR/USD (4 Hours)

One of the most important currency pairs worldwide is held under control by the bears since the mid of August. The surprising interest rate cut and the geopolitical tension are the reasons for the current 14-month low around the 1.284 level. The Bollinger Bands indicate that further losses might occur as there is no reliable support level.

Support & Resistance (4 Hours)