Good morning from sunny Hamburg and welcome to a new, interesting trading week with some important economic data and the rate decision of the Bank of Japan on Thursday. But first all our best wishes and congratulation to Spain for winning the Football World Cup in South Africa.
Anyways, we hope you had a great weekend and wish you a nice start in the new trading week
The JPY started lower into the new trading week and weakened versus all of its major counterparts as signs that the global economic recovery is still intact, damping demand for Japan’s currency as a refuge. The EUR/JPY climbed near to a three-week high after Prime Minister Naoto Kan’s party lost control of Japan’s parliaments upper house, undermining efforts to rein in the world’s largest public debt. The public broadcaster NHK showed that the ruling Democratic Party of Japan won 44 upper-house seats, compared with 51 for the opposition Liberal Democratic Party. Japan’s producer prices rose for a second month in June, driven by an increase in commodity costs that may do little to arrest deflation. The amount companies pay for energy and unfinished goods climbed 0.5 percent from a year earlier after advancing a revised 0.5 percent in May, the Bank of Japan said in Tokyo today. The EUR/USD strengthened to an eight-week high as the President of the European Central Bank Jean-Claude Trichet said the economic recovery is gathering momentum.
The AUD/USD rose near to the strongest level within the last three weeks as China, the nation’s largest trading partner, said exports rebounded to a record boosting speculation the global recovery is robust, increasing demand for so-called higher yielding assets. New Zealand’s cash deficit was narrower than the government forecast as delays in purchasing assets offset lowerthan- expected tax receipts. The deficit totaled $5.5bln in the 11 months ended May 31st, the Treasury Department said in a statement released in Wellington today.
Employers in Canada added 93,200 jobs in June following an increase of 24,700 in the previous month, Statistics Canada said on Friday. The national jobless rate fell to 7.9 percent
EUR/JPY (1 Hour)
After the EUR/JPY lost the support of its first bullish trend-line and rebounded it seems that the bulls could create another upward support-line. In order to this, the currency pair climbed and touched its resistance around the 112.37 but failed to cross it. Now it remains to be seen if the trend-line could support the EUR once again
EUR/USD (4 Hours)
As you can see, the EUR/USD lost more than 50 pips during the early Tokyo trading hours today and the short-term moving average also crossed its long-term counterpart which may indicate increasing bearish pressure. The Momentum indicator fell below its 100 points line and may suggest an upcoming bearish trend as well.
USD/JPY (4 Hours)
The USD/JPY opened the week nearly unchanged and defended last week gains but the RSI indicator remain staying on a high level and may suggest an overbought market. On the other hand-side there are no indicators that the bears may use the high level to enter the market, especially as far as the CCI won’t cross its +100 points level yet and the short-term moving average not cross its long-term counterpart.
AUD/USD (1 Hour)
The AUD/USD has been trading in a sideways movement since the end of last week. Due to this fact the Bollinger Bands narrowed like a bottle neck, which may indicate an upcoming trendoutbreak. In conclusion that the short-term moving average crossed its long-term counterpart on the down-side it may suggest that the bears take control.
NZD/USD (1 Hour)
Since the end of last week it seems that the bearish pressure is increasing as the short-term moving average crossed its long-term and the Stochastic fell below its 80 points level. Only the Momentum could support the bulls and may suggest that bears may indeed test the support around 0.7069 but probably may not have enough power to cross the support-line yet.