The euro ́s nine-month tumble is history

Good morning from Hamburg and welcome to our first Daily FX Report for this week. Negotiations between Greece and its international lenders over reforms to unlock remaining bailout aid have made headway and an agreement could be closer this month, a government official said on Sunday. Prime Minister Alexis Tsipras's three-month-old government is under growing pressure at home and abroad to reach an agreement with European and IMF lenders over reforms to avert a national bankruptcy. Talks have been painfully slow as the leftist-led government is resisting cuts in pensions and labour reforms that would clash with its campaign pledges to end austerity. "There were very important steps made at the Brussels Group (talks) which bring an agreement nearer," the official said, declining to be named.

Anyway, we wish you a successful trading week!

Market Review – Fundamental Perspective

The euro ́s nine-month tumble is history. The 19-nation currency posted its biggest weekly gain versus the dollar in six weeks on signs the European Central Bank ́s stimulus plan has the region ́s economy ready to generate stronger growth and inflation. The euro gained 3 percent to $1.1199 this week in New York, staging a six-day climb that was the longest rally in more than a year. The 4.6 percent April rise was the first since June and largest since September. The shared currency strengthened 4 percent to 134.58 yen this week, the biggest gain in two years. Japan ́s currency fell 1 percent to 120.15 per dollar. Euro-area consumer prices ended a four- month streak of declines in April after falling 0.1 percent in March. The ECB seeks to foster inflation close to 2 percent. The signs of rising prices reflected results for the central bank ́s bond-buying program, sending the euro higher and helping fuel a rout in euro-area bond markets. Government bond yields moved higher in Germany and other nations, adding to the allure of euro-denominated assets. Lackluster U.S. data magnified the euro ́s rally by casting doubt on the timing of the Fed ́s first interest-rate increase in almost a decade. The biggest hit to the dollar came on April 29, when a report showed the U.S. economy sputtered to a near-halt in the first quarter, and the Federal Open Market Committee didn ́t give a strong signal for higher rates. The dollar slid 1.3 percent against the euro that day. Even after its losses in April, the dollar is still the best-performing major developed currency the past 12 months, gaining 18 percent.

Daily Technical Analysis

GBP/USD (Daily)

As the chart shows, the GBP decreased steadily versus the USD since the mid of July 2014. At the support around 1.4726 the bearish trend was broken and the pric reache the level around 1.5502. It is difficult to say where it could develop. The CCI is showing that the pair is likely to move sideward.

Support & Resistance (Daily)