Daily FX Report

Daily Forex Technicals | Written by Varengold Bank | Jul 21 08 07:38 GMT |

Good morning from wonderful, but again very rainy and grey Hamburg. The weather hasn't taken the best start to the new week. It is rainy, grey and very cloudy in Hamburg. But we hope your trading week starts more exciting. All the best, and many profits for your trading this week. Markets review The USD was a bit stronger on Monday in the Asian trading session, holding last week's rally on improved sentiment over the US financial system, though dealers were wary of earnings reports from regional banks this week. The USD sat at 72.247 against a basket of currencies, slightly up from last week. The EUR/USD opened around 1.5830, down from 1.5843 late on Friday in New York, but soon recovered to 1.5860. The EUR/USD is down from a record high of 1.6038, hit earlier last week as a result of Citi and JPMorgan beating low expectations, while financial stocks rallied hard. After Bank of England policy maker David Blanchflower warned that the British economy is heading into recession, and interest rates should fall to 'well below' current 5 %, GBP came under pressure. GBP/USD eased to 1.9934, from 1.9978 late on Friday. The AUD/USD rose 0.4 % this morning to 0.9748, after data showed producer prices rising at a slower than expected pace, though it quickly regained ground on improved appetite for higher yielding currencies. AUD/JPY hit an eight month high of 104.14, as rising regional stock markets encouraged carry trades. Technical analysis AUD/JPY The movement we see in AUD/JPY is very rare in volatile market phases like these. Since middle of May, there has been a very strong bullish development. A small recovery in June stopped around 101. This mark could work as support from here on, and with a break through, this level could come up with bearish potential in this market. At the moment, everything indicates an ongoing bullish market development. GBP/JPY The strong bullish market trend in the GBP/JPY went from May to June. In the second third of June, it started a sideways trend channel with no clear movements in any direction. It followed with a break through the support around 210, and it rebounded quickly to 213.83. If the market doesn't come back through its old resistance around 212.5, the market could keep on growing. Pivot Points - Daily FX Support and Resistance Levels Daily Calendar & Key FX Events Varengold Bank IMPORTANT NOTIFICATION TO BE READ IN CONJUNCTION WITH THE CONTENTS OF THIS DOCUMENT This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational urposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.