Australia's currency strengthened 0.2 percent to 0.8146 USD

Good morning from beautiful Hamburg and welcome to our first Daily FX Report for this week. U.S.President Barack Obama accused North Korea to be responsible for the massive hacking of Sony Pictures which was classified as a cyber-vandalism. Obama and his advisers are weighing how to punish North Korea and he said that they will respond proportionately. One option might be to put North Korea again to the U.S. list of state sponsors of terrorism, from which North Korea was removed six years ago.

Anyway, we wish you a great start into a new trading week!

Market Review – Fundamental Perspective

Last Friday the Dow Jones index of shares climbed 0.1 percent and the Standard & Poor’s index even rose 0.5 percent. Yesterday Saudi Arabia said that it would not cut output to prop up oil markets even if non-OPEC nations did so. So the world’s top petroleum exporter plans to ride out the market’s biggest slump in year. U.S. crude future prices fell 14.2 percent over the past two weeks, last Friday they rose 5.1 percent to 57.13 USD per barrel.
Economists estimated that the Federal Reserve will increase interest rates as early as April as other major central banks continue monetary easing. Therefore the USD held gains from last week versus most major peers. It also advanced to match a two-year high against the EUR after European Central Bank Vice President Vitor Constancio told a German magazine that policy makers aren’t ruling out quantitative easing. In addition governing council member Luc Coene said in an interview on Saturday that the European Central Bank should start buying government bonds to tackle poor investor confidence and low inflation in the euro zone. According to the Belgian central bank chief Coene the ECB had already waited too long, and that this could be one tool to boost economic activity. The ECB Governing Council will hold its next policy meeting on January 22. The EUR/USD tumbled to 1.2224 and the USD/JPY was nearly unchaged at 119.55. The EUR bought 146.10 JPY. Last week the Bank of Japan maintained unprecedented stimulus as exports in Japan have shown signs of picking up. Australia’s currency strengthened 0.2 percent to 0.8146 USD, after decreasing 1.4 percent in its fifth straight weekly decline. New Zealand’s currency fell versus the USD to 0.7733 after a report showed a drop in consumer confidence.

Daily Technical Analysis

XAU/USD (4 Hours)

Six weeks ago the metal Gold recovered at the support line around 1137.6 and started an upward movement inside a bullish trend channel. It gradually rose towards an eight week high around 1237.9 but rebounded there. Last week it was in a sideways trend with signs of further decrease.

Support & Resistance (4 Hours)