The euro fetched $1.1157

Good morning from Hamburg and welcome to our latest Daily FX Report of this week. Asian shares were subdued in early trade on Friday, but still on track for a steep weekly loss in the wake of China's shock currency devaluation earlier in the week. Investors awaited Friday's yuan fixing to see if China's central bank would set its official guidance rate lower for a fourth day. The People's Bank of China (PBOC) set its rate nearly 2 percent lower on Tuesday, a move it said was aimed at making its foreign exchange system more responsive to market forces. In China, investigators searched for clues on Friday to identify what caused two huge explosions at a warehouse used to store toxic chemicals and gas at a busy port in northeast China, as foreign and local companies assessed the damage to their operations. The blasts in the city of Tianjin on Wednesday night killed at least 50 people, including a dozen fire fighters, state media said. About 700 people were injured, 71 seriously.

Anyway, we wish you a successful trading day and a relaxing weekend!

Market Review – Fundamental Perspective

The dollar steadied on Friday after China's central bank said it saw no reason for the yuan to fall any further, but prospects for the yuan and the broader Chinese economy still kept market players jittery. Data showing that U.S. retail sales rebounded in July, while June sales were revised higher, also boosted the dollar. In early Asian trade, the dollar changed hands at 124.73 yen, off its two-month high of 125.28 yen hit on Tuesday. The yuan's sharp falls this week raised speculation that the U.S. Federal Reserve may delay its proposed rate hike, reducing the dollar's yield advantage over other currencies. The yuan and other Asian currencies account for 40 percent of the dollar's trade-weighted effective exchange rate.
The euro fetched $1.1157, having gained 1.8 percent so far this week. The dollar's index against a basket of six major currencies stood at 96.372 , off its one-month low of 95.926 hit on Tuesday. In commodities trading, crude oil futures extended sharp losses that pushed oil prices to levels not seen since early 2009, when the financial crisis was wreaking havoc on markets. U.S. crude settled down 3 percent at a new 6-1/2-year low as a big rise in U.S. stockpiles intensified worries over a growing global glut. U.S. crude oil was down 0.4 percent at $42.07 a barrel in early Asia trade, while Brent slipped 0.2 percent to $49.11, ahead of Friday's expiry of its front-month contract.

Daily Technical Analysis

EUR/AUD (Daily)

Since April 2015 the pair experienced an upward movement untill it reached a level of around AUD 1.51 which marks the highest level since April 2014. At the moment the pair is slightly declining but according to the indicators and by considering the fundamental indicators such as the weakening prices for commodities, a future upward movement seems to be likely. However, minor corrections may be expected in the short run.

Support & Resistance (Daily)