Thursday, July 17, 2008

Daily FX Report

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Daily Forex Technicals | Written by Varengold Bank | Jul 17 08 08:11 GMT |

Good morning from Hamburg. It is Thursday and everybody knows what that means: half of the week is over, and we're steering straight to the weekend, which is a little bit like a project: it must be constructive with a lot of creativity. Yesterday, traders were able to enjoy a little break after the excitement on Tuesday, with a small rebound of the USD. But the strains are still in the market so look out for all messages that affect the market.

Markets review

Japanese manufactures business sentiment hit a fresh 5 year low as companies felt the pinch from surging energy and raw material costs and sluggish demand. The USD/JPY dipped 0.3% to a low of 103.75, but due to reports about the weakening Japanese economy, has since started creeping back.

The conference Board of Canada lowered its forecasts of Canadian economic growth in 2008 and 2009 yesterday, citing declining exports to the struggling US market, especially in the auto sector. In its summer outlook the Conference Board forecast gross domestic product would advance 1.7 percent this year, down 2.2 percent in its spring forecast. While the Board said it has good expectations for 2009, helped by an improving trade performance and still healthy domestic demand, it lowered its growth target to 2.7 percent from 3 percent.

The USD held gains after staging a big rebound the previous day. Oil will play a big part in the USD's upcoming developments, with traders still cool on the dollar before earnings reports from JP Morgan and Merryl Lynch later last day. The EUR lost 0.6% against the USD, and closed at 1.5822. The GBP lost a little less with 0.3%, and closed under the 2 USD mark at 1.9987

Technical analysis

NZD/USD

After a small M formation between June and July, the NZD/USD reached its upper line of the downward trading channel. As it breaks through the line, the dojis and the last candle with the long wick indicate an upcoming decrease. However, the iffy situation in the USA makes a drop arguable.

USD/CAD

After the good performance of the CAD in the last week it seems that there is a border at the 1-even level. Also in this pair, the doji and the candle with the fuse indicate a possible turn.