Wednesday, July 23, 2008

Daily FX Report

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Daily Forex Technicals | Written by Varengold Bank | Jul 23 08 07:34 GMT |

Good morning from wonderful Hamburg and welcome to Varengold Bank's daily FX Report. Today we have a day with some more economic data than the last few days, so today could be a very interesting day for news traders. Have a look in our small choice of today's data on the last side of this report.

Markets review

The USD stayed firm on Wednesday Asia trading session, holding much of the ground gained against the EUR and the JPY the previous day on a verbal lift from top US officials and a sharp 4 USD slide in the US Crude Oil price. The USD stayed little stronger, however, as sellers emerged to take advantage of Tuesday's surge, in which the USD jumped 0.7 % at 107.31 against the JPY and down 0.9 % to 1.5774 versus the EUR. Comments from Philadelphia Fed President Plosser suggested US rates may have to rise even before financial markets recover, rallied the USD sharply also. The USD was 1.4 % stronger against the CHF, so USD/CHF traded at 1.0311.

The Australian Q2 CPI rose 1.5 % in the last quarter. Professional expectations were for a 1.2 % increase. For this year, the CPI jumped 4.5 %, also above the markets median forecast for a 4.3 % rise. AUD/USD jumped to a session high of 0.9737 in the Asian trading session after the data but ran into sellers and slipped back to 0.9707, down slightly on the day.

Technical analysis

EUR/CHF

After the down trend in EUR/CHF was stopped in the middle of June, a new support line was established around 1.602. This support has been tested twice. On Monday, the resistance at 1.625 was broken first time since the end of May. If the market doesn't return, this could act as a new support.

GBP/USD

In GBP/USD, the strange zigzag formation continues. Last week, the strong resistance at 2.0000 was broken, signaling a possible end to the sideways channel. The market recovered, and has since fallen back within the previous sideways channel. Having broken through the resistance could be a signal for bullish market moves.