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The EUR fell also against the JPY as it reached the low at 132.80

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 11/19/09


Good morning to our Thursday’s Daily FX Comment of this week. Bad rated banks inside the UK may be the main reason for the weak GBP in the past few trading days. We wish you a nice and relaxed trading day and successful trades.

Market review

The JPY and the USD climbed against the EUR on speculation that European banks will disclose more credit losses. This would increase demand for the relative safety of the JPY and USD. Both countries’, the U.S. and Japan, have their interest rates near zero. The JPY climbed versus all the 16 major crosses after Asian stocks slipped. The Nikkei 225 Fell 1 percent while the MSCI Asia-Pacific Index dropped 0.6 percent. Yesterday, the Mitsubishi UFJ Financial Group Inc. said that it plans to sell as much as 1 trillion JPY ($11.2 billion) in stock. The USD/JPY dropped to 89.12 after touching a low of 89.07. It still trades in a middle-term downward trend phase. The EUR fell also against the JPY as it reached the low at 132.80.

The GBP dipped for a third day against the USD after the Daily Telegraph reported that according to the world’s biggest credit-checking company, U.K. banks are in a worse state than lenders anywhere else. The GBP/USD fell to 1.6700 after it reached a low at 1.6686 while opening the day at 1.6749. The U.K currency also fell against the JPY. It reached a low at 148.65, which was the lowest level since November 12th.


Since November 10th the CHF/JPY has been moving in a downward phase. As you can see, the CHF/JPY has crossed the middle Bollinger band and is trading around the first weekly pivot support level at around 87.82. If the market breaks the second support, it may fall further towards the lower Bollinger band (same as the lowest price from the 17th, which is at 87.60) and the second support level of around 87.10.


During the last five trading days, the CAD/CHF has been moving inside a bearish trend channel. After touching the resistance line of 0.9660 for the last time yesterday, the market dipped to the support line of around 0.9550 and the lower line of the channel. This might be a sign for a short-term oversold market. The pair may rebound towards the upper line of the channel.

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