The EUR rose for the first time within the last five days against the JPY

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 11/30/09

Good morning from beautiful Hamburg and welcome to the first Daily FX Report of this week and the last one in November 2009. We hope you enjoyed your weekend very well and you could start relaxed into the new trading week. We wish you a successful trading day.

The central bank of the United Arab Emirates tried to calm down the financial markets and said it “stand behind” the country’s banks, easing concern about a possible default by state-owned Dubai-World. The central bank said that banks will be able to borrow money from the regulator for half a percentage point above the three-month local benchmark interest rate to prevent a liquidity crisis. Due to this fact, the JPY came under pressure and rebounded from its gains last week. The EUR rose for the first time within the last five days against the JPY. Also the higher yielding currencies AUD and NZD profit by the increasing demand for riskier assets after concern eased over credit losses in the Middle East. The AUD climbed also on speculation that the Reserve Bank of Australia will increase the key interest rate for the third time on its meeting tomorrow. The GBP/USD weakened already on Friday 0.3 percent, after a drop in stocks across the world to the weakest level since November 3rd. Investors sold the U.K. currency on speculation the government will downgrade its forecast for the national economy.

The USD/JPY traded close to a bearish trend-line since the end of October and lost its important 38.2% Fibonacci support-line. In order of this, the currency pair boosted its downward trend furthermore and fell below the 85.00 level. At this oversold level the bulls entered the market again and pushed the USD over the 23.6% support. The increasing momentum indicator may a further sign for a prolonged recovering.

Having the EUR/AUD lost since October its both support lines at 1.6613 rather 1.6258, the currency pair recovered but failed to cross the resitance at 1.6613. In considering of a decreasing MACD indicator it seems that the EUR/AUD will pull back near to its support at 1.6258 again. If this support will be strong enough to stop the bears, it could be the beginning of a mid-term sidewys movement.