Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from Hamburg and welcome to our Daily FX Report. People across Nepal were still waiting for help and relief to arrive yesterday, four days after a devastating earthquake killed more than 4,600 people and destroyed building and roads. Prime Minister Sushil Koirala said the death toll could reach 10,000, which would surpass the 8,500 who died in 1934 earthquake. Besides that Nigeria’s army has rescued 200 girls and 93 women from the Boko Haram Islamist militant group, which had been kidnapped in April 2014.
Anyway, we wish you a great trading day!
Market Review – Fundamental Perspective
the Dow Jones Index of shares increased 0.4 percent and the Standard & Poor’s Index gained 0.3 percent. Yesterday a U.S. consumer-confidence gauge was weaker than the most pessimistic of 77 forecasts, falling this month to its lowest level of the year to 95.2. Today a U.S. report is estimated to show that economy grew at the slowest speed in a year. Gross domestic product might only expanded an annualized 1 percent in the first quarster this year. In addition today the U.S. Federal Open Market Committee is going to release a statement after concluding a two-day meeting. Based on speculation of disappointing economic data, it is estimated that the Fed will push back its first interest-rate rose in nine years and will probably wait until September to raise borrowing costs. The EUR/USD strengthened 0.8 percent to 1.0981 and the USD/JPY declined 0.2 percent to 118.86. The EUR/JPY traded at 130.41. The USD increased 17 percent during the past 12 months.
Data yesterday showed that the economy in Britain expanded 0.3 percent in the three months through March, the least since the end of 2012 and compared with growth of 0.6 percent in the last quarter of 2014. Economists had estimated a reading of 0.5 percent. Nevertheless the GBP posted its longest winning streak in almost a year versus the USD. The GBP/USD climbed 0.5 percent to 1.5321 and the EUR/GBP decreased 0.3 percent to 0.7152. Investors are concerned about the immediate aftermath of the election next week.
Greek Prime Minister Alexis Tsipras said that he is confident of an outline deal with international creditors within two weeks. But he threatened to call a referendum if lenders insist on demands deemed unacceptable by his leftist government.
Technical Analysis
EUR/JPY (4 Hours)
Two weeks ago a trend reversal happened at the support line around 126.22 and lead to a bullish movement inside an upward trend channel. The MACD is still bullish therefore we estimate a continuation of the current trend as long as the pair does not drop out of the channel.
Support & Resistance (4 Hours)
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