Daily FX Report

Daily Forex Technicals | Written by Varengold Bank | Aug 18 08 07:15 GMT |

Good morning from wonderful Hamburg and welcome to the Varengold Daily FX Report. The BOJ 2-day meeting will start today and it seems that the rates will be kept on hold. However we wish you a good start to the week. Markets review The Bank of Japan will probably keep rates on hold in a signal that crumbling demand can no longer offer factories enough business to keep Japan out of recession. Otherwise, wages are stagnant while food and fuel prices go higher. The BOJ is seen as having little room to raise rates from 0.5% for several months. There will be a 2-day meeting starting today, with its decision expected between 03:00-05:00 GMT today. According to a dealer at a Japanese bank, there has been relatively strong buying of the JPY from Japanese investors, and the market remains thin and such big flows tend to trigger moves in the same way. USD/JPY hit a low of 109.97 and a high of 110.10, currently it is down 0.4% on day. EUR/JPY fell to a day low of 161.82 and a high of 162.22. According to the newspaper 'The Australian', the Commonwealth Bank of Australia, which is the country's no. 2 bank of assets, might offer $5.2 billion to British bank HBOS Plc for its Australian unit BankWest. The EUR/USD hit a session high of 1.4767, recovering sharply from its 6-month low of 1.4645. It got a lift as gold and oil also hits their highs for the day. Gold is up to a high of $799.45 and US Crude oil increased by $1.52 to a high of 115.29. Technical analysis EUR/USD From last Monday to Thursday the EUR/USD traded in a horizontal trend channel with a support level at 1.485 and a resistance at 1.4948. After breaking through the support, the market started to fall. In the late trading session at Friday the market stopped falling, and there seems to be a new support that has developed. If the market doesn't break through this level, we might be able to expect a recovery back to the original horizontal trend channel. AUD/USD Last week the AUD/USD traded in a horizontal trend with a support at 0.8606. After the market touched the support level twice the market started to rise and there seems to be a new resistance at 0.872. If the currency pair doesn't break trough this new resistance, we could expect a recovery to the 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.