Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from Hamburg and welcome to our latest Daily FX Report. Yesterday, a 22-year-old woman from the United States was killed on a safari outside Johannesburg. She was taking pictures and likely didn't see the lion approach from the side, the source said. The woman was a passenger in a vehicle with a tour operator when the lion attacked. The operator was hurt trying to fight off the animal, but he is expected to survive, according to Scott Simpson, assistant operations manager at Lion Park. Lion Park said witnesses confirmed that the passenger's and driver's windows were open, something absolutely forbidden at the park.
Anyway, we wish you a successful trading day!
Market Review – Fundamental Perspective
The dollar rally took a pause in Asian and early European trade today as USD/JPY touched but failed to hold the 125.00 level reaching multi year highs, but then quickly lost air and faded back to 124.50 as profit taking kicked in. The pair continues to benefit from rising US yields which in turn are moving positive US data. EUR/USD and GBP/USD and AUD/USD all also advanced on slightly better economic news. The rest of the week however could be the telling point as to whether USD/JPY retakes 125.00 or not. With ADP and NFP numbers on tap the pair could hover around these levels until the market gets a better read on the labor conditions in the US economy. Elsewhere the EUR/USD moved a little higher in the wake of better than expected CPI data from the EU which came in at 0.3% vs. 0.2% estimated. However, the rally stopped short of the key 1.1000 level as markets still remain on edge over the negotiations with Greece. The talks still appear to be at an impasse and time is quickly running out. Greek Prime Minister Alexis Tsipras stated that Greece has specific and realistic proposals for a compromise and added that Greece trusts that EU leaders will be realistic. So far though the parties have not reached any tentative deal, but the market remains relatively certain that some compromise will be reached. In UK the Construction PMI came in a bit better at 55.9 versus 55.1 and the mortgage applications rose to 68K versus 64K indicating that the UK housing market remains robust. Cable has been under enormous pressure over the past few weeks and today appears to be the first day that the pair has found a semblance of support at the 1.5200 level. Tomorrow the market will get a glimpse of the UK Services PMI and if the news is better than projected it will likely provide further fuel for a short covering rally taking the pair through 1.5300.
Daily Technical Analysis
NYMEX.CL (Daily)
After the collapse in the crude oil prices the second half of last year, the commodity made a double bottom pattern, bouncing sharply from its lows. Now, once crossed the bearish long term trend-line, the price heads toward the 65.95 level, coinciding with the double bottom projection. However, the 200 moving average could also work as a resistance. Below, 54.00 seems to be a strong support.
Support & Resistance (Daily)
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