Daily FX Report

Daily Forex Technicals | Written by Varengold Bank | Jul 18 08 08:01 GMT |

Good morning from Hamburg. Last night the oil price decreased, and for the first time since the beginning of June, traded at under $130 a barrel. That must be good news for the gas bill, and raises hopes for further price drops. But what can we do against the high gas bill? The best is to earn enough money in Forex that it doesn't matter. Markets review ECB chairman Trichet outlined a base-line scenario of reduced growth in the second and third quarters of 2008, and laid out projections for moderate growth in the following quarters. Along with these growth projects, he gave descriptions of current growth risks, including 'significant financial market correction, the possible further increases in oil and commodity prices, and the possible unwinding of global financial imbalances.' Furthermore, Trichet said that the ECB was committed to control inflation, with a target of below 2 percent, from the record 4 percent in June, and hinted that future interest rate hikes might not be out of the question. The EUR/USD was nearly unchanged, increasing 0.26% and closing at 1.5864. The USD has begun to stabilize, likely supported by relaxed oil prices. It is, however, still capped due to recent shakeups in the financial system. On Thursday, the USD had the best day against the JPY in over 3 months, with a high of over 107, after hitting 1 ½ month low of 103.75 on Wednesday. Australia's Q2 export prices beat expectations and soared 13.5 % qtr/qtr, caused by a boom from rising commodity prices, while import prices rose 1.4%, slightly below expectation of around 1.7%. The data had a little impact on the Aussie, which nurses slight losses on the day at 0.9711 and is near the session low at 0.9708. Technical analysis EUR/USD After reaching a new all time high on Tuesday, the EUR has since been retreating against the USD. The 1.58 level developed into a hard mark, as it first provided resistance in May and June, and now it has become a support. If this trend continues, the EUR/USD could reach a new high next week. USD/CHF The USD/CHF had a support line at 1.0125 throughout June. However, it seems to currently be caught in a downward trend channel, and that the top of the trend channel was touched yesterday. If this turns out to be a real trend, it will open an attack on the 1-even level, which could be the next support. 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.