Slowing global economy affecting US growth

Good morning from Hamburg and welcome to our latest Daily FX Report. Apple Inc., the well- known technology company, unveiled a slew of new products, from larger screened iPhones to refreshed Macs, late last year to rev up growth. The move paid off last quarter with record sales and profit. Apple shares rose as much as 6.7% in extended trading after the company reported that sales of iPhones during the 4th quarter rose 46% to 74.5 million units, topping analysts’ average estimate of 64.9 million. The sales generated a profit to a record $18 billion, or $3.06 a share, on sales of $74.6 billion, much higher than a profit of $2.60 a share, and revenue of $67.5 billion expected by the analysts. Demand of Apple products soared „to an all-time high”, CEO Tim Cook said in the statement. According to these stunning results, it seems that those who predicted the end of Apple’s world leadership after Steve Jobs were wrong.

However, we wish you a successful trading day!

Market Review – Fundamental Perspective

The dollar declined from a more of a decade high after U.S. durable goods orders unexpected decreased sharply 3.4% (+0.3% exp.) in December for a fourth month and Federal Reserve policy makers began a two day meeting. The US currency fell yesterday against most of the major currencies as worse than expected corporate results, such as Caterpillar In. and Microsoft Corp., suggested that a slowing global economy might be affecting on U.S. growth. Analysts are betting on an October increase in interest rates by Fed. On the other hand, euro rose against CHF after a Swiss National Bank official said it remained ready to intervene in markets. The franc had traded near parity against the euro since the SNB announced on Jan. 15 its decision of abandoning its cap of 1.20 franc per euro which pushed the Swiss currency as much as 41% higher against the euro to the strongest level on record. Russia’s ruble bounced from a record low close Monday, when it plunged after Standard & Poor’s lowered Russia’s credit rating to junk for the first time in a decade. The sink of the price of Crude Oil in the markets is harming deeply the Russian economy, very dependent of this energy source, as one of the main world suppliers. The dollar fell 1.3% to $1.1381 against the euro after gaining to $1.1098 the previous day, the strongest since September 2003, which reflects the different stage both economies are at the moment. China’s yuan rose by the most in four weeks as the central bank strengthened the reference rate after the currency’s biggest two-day slide since 2.008.

Daily Technical Analysis

EURGBP (Monthly)

Technically, the EURGBP is clearly bearish, once broken the long term uptrend-line. At the moment, this pair is close to the low side of a downtrend channel, coincident with a very important support in the area of 0.7214. As a most probably scenario, the pair should not be able to cross this level easily, being possible a pull back to the mentioned broken long term uptrend- line, or even higher, to the resistance of 0.8065. However, if this first support support is finally broken, the 0.6540 level should also work as an important support.

Support & Resistance (Monthly)