Daily FX Report

Daily Forex Technicals | Written by Varengold Bank | Dec 18 08 11:32 GMT |

The Markets are going crazy. An example: The result of Opec's larger-than expected supply cut was that oil prices declined 8.1 %. Any financial theorist teaches an opposing influence Markets review The unemployment rate in the UK rose for the tenth month in November. Official data shows an increase of 75,700 which has taken the total number of jobless benefit to 1.072 million. After that data the GBP/USD crashed more than 2.0 % but recovered to 1.5523 at the end of the session. The GBP fell also against the EUR 2.9 %. Especially comments from a BoE official influenced the currency pair. They reinforced expectations the central bank will cut rates aggressively to avoid a recession. The JPY fell from its 13-year high against the USD after Finance Minister Shoichi Nakagawa said the nation will take necessary steps to limit the currency's advance and protect the overseas earnings. The rate cut by the Fed has set the BoJ under pressure to follow the direction. Also Japanese government officials voiced concerns about the strong JPY and have pushed the central bank to take more action. The BoJ ends its two-day policy meeting on Friday and the market sees rates coming down to 0.10 %. Yesterday Canada released that wholesale sales fell 1.8 % in October, more than three times as expected. Also an industry survey showed Canadian small-business confidence fell to the lowest since 1990. Nevertheless the CAD rose for the third day. It appreciated 0.8 % to 1.1930 in the overseas trading session. The main reason was a statement of Bank of Canada Governor Mark Carney. He said that the financial system works well and that he is optimistic about the Canadian economic situation. Technical analysis EUR/CHF Since November the EUR/CHF has been trading in a bullish trend channel. The strength of the CHF has led that the currency crossed the lower trend line yesterday. Normally this is a short signal but the pair resisted at the 1.5540 Fibonacci level and the RSI indicates a cool down of the last exchange loss. If the indicators are strong enough a recovery could be expected USD/JPY The USD/JPY trades in a downward trend channel. The recent price movement has led that the USD trades on the lower line of the trend duct. A closer look on the Relative Strength Index (RSI) suggests that the last downturn trend slow down because the index is listed among 30. This could be an indicator for a rebound and an ongoing of the zigzag movements inside the formation. 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.