Canadian dollar was little changed at C$1.3029 per greenback

Good morning from beautiful Hamburg and welcome to our latest Daily FX Report for this week. Six weeks of international turmoil from Greece to China have had zero impact on economists’ outlook for the first Federal Reserve rate rise. Odds for a September liftoff remain at 50 percent, exactly where they were in June, according to the median of 46 responses in a July 20-22 survey. They assigned 40 percent odds to a later move and saw no chance of a decision when the Federal Open Market Committee gathers July 28-29 in Washington. The outlook for a September move remained intact even as crises in Greece and China temporarily rocked markets and dimmed global economic prospects. Now that those concerns have eased, U.S. policy makers can focus on their dual mandate for full employment and low, stable inflation at home.

Anyway, we wish you a successful trading day!

Market Review – Fundamental Perspective

The dollar held gains after a gauge of the currency rose to almost a four-month high with a better-than- forecast housing report supporting U.S. moves toward higher interest rates. The greenback had advanced Wednesday versus Norway’s krone, the Brazilian real and the Canadian dollar -which closed at its lowest level since 2004- amid speculation sliding commodity prices will necessitate further stimulus in resource- exporting nations. The dollar strengthened 0.2 percent versus the krone to 8.1592 as of 7:28 a.m. Tokyo time Thursday, while the Canadian dollar was little changed at C$1.3029 per greenback after slumping 0.7 percent the previous session. The Bloomberg Dollar Spot Index, which tracks the currency versus 10 major peers, added 0.3 percent to 1,207.85 in New York on Wednesday, close to the highest since March. Sales of existing U.S. homes climbed 3.2 percent to an eight-year high in June, while prices rose to a record. Only one of 76 analysts surveyed by Bloomberg before the release by the National Association of Realtors forecast that scale of increase. The Federal Reserve is weighing incoming data for signs the U.S. economy can withstand higher rates. Futures contracts show a 40 percent likelihood that the central bank will move in September and a 74 percent chance of a December increase. Officials meet next week. That’s deepening a slide in commodity currencies as a rout of raw-materials prices extends. The Bloomberg Commodity Index slid to its lowest level in 13 years.

Daily Technical Analysis

GBP/JPY (4 Hours)

The minor pair rose last days very close to old highs after a sharply drop. It touched now the 4th time the downward trend line. After this strong climb it might be possible that bulls continue this movement after a correction. Next resistances are very close to the current level. Traders could entry the market by stop orders to get a “confirmation”.

Support & Resistance (4 Hours)