The dollar weakness and nerves about the Greek talks drove gold higher

Good morning from Hamburg and welcome to our latest Daily FX Report. Global shares hit their highest since September and the euro firmed on Monday with investors cautiously optimistic that euro zone finance ministers would reach a funding deal for debt-laden Greece. The MSCI all- country world stocks index, which has risen in recent days on hopes for a Greek deal and a ceasefire in Ukraine, touched its highest since Sept. 22. It was last fractionally up on the day at 427.95 points. Tokyo's Nikkei closed at its highest since July 2007, buoyed by a record close on Friday in the U.S. S&P 500 index and after data showed Japan emerged from recession in the final quarter of 2014, although its 0.6 percent growth was less than forecast.

However, we wish you a successful trading day!

Market Review – Fundamental Perspective

The euro fell broadly early on Tuesday after a sudden collapse in talks to secure a new debt deal for Greece disappointed investors who had hoped there would be an outcome by now. The common currency fell to $1.1347, from Monday's high of $1.1429 and back near the bottom of its prevailing $1.1270-1.1534 range. Trading overnight was light with U.S. markets shut for a public holiday. The euro plumbed a one-week low of 134.00 yen before drifting up to 134.57. Against the GBP, it came within a whisker of a 7-year trough of 73.69 pence set last week. It was last at 73.87 pence. Renewed weakness in the euro helped lift the dollar index to 94.201, from a one-week low of 93.899. Against the yen, the dollar came close to retesting 118.00, but managed to recover some ground to last stand at 118.47. It was still off Monday's high of 118.88. Overall, the dollar was broadly weaker. It fell 0.1 percent against a basket of major currencies. Among commodity currencies, the New Zealand dollar was the best performer, reaching a three- week high of $0.7529. In contrast, its Australian peer was flat at $0.7775. The focus this morning is likely to shift to the minutes of the Reserve Bank of Australia's Feb 3 policy meeting, when it surprised some by cutting the cash rate to a record low 2.25 percent. Oil held on to last week's gains after Kuwait's oil minister said lower levels of supply would support prices in the second half of this year. Brent crude was last up 0.1 percent at $61.60 a barrel, off a high for the day of $62.57. Oil topped $60 a barrel last week for the first time since December as the number of oil rigs in the United States fell. The dollar weakness and nerves about the Greek talks drove gold higher. Spot gold last traded at $1,230.60 an ounce, off a high of $1,236.50.

Daily Technical Analysis

EUR/JPY (Daily)

After touching the resistance level at 149.77, the bears took control over this currency pair and the EUR highly lost in value versus the JPY. At the moment the pair is traded close to its first resistance level at 136.66 and according to the indicators, this level may be to strong to pass in the short run. A sideward movement between the first support and the first resistance line may be likely over the course of the next months.

Support & Resistance (Daily)