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The EUR/USD traded near a 16−month high

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 12/02/09


Good morning and welcome to the Daily FX Report. The December began in Hamburg very cold and froze the car glasses for the first time this winter. However, we wish you a prosperous trading day.

Market review

The JPY weakened against the 16 most-traded currencies as signs of a faster recovering global economy increased demand for riskier assets. Economists expect today a report which will show that the U.S. companies cut fewer jobs than originally expected. Also the German unemployment rate fell unexpectedly in November by 0.1 percent from a month earlier, the German Federal Labor Agency said on Tuesday. The EUR/USD traded near a 16-month high as European finance leaders played down potential risks to their banks from Dubai’s debt problems. The GBP/USD recovered after three days of losses after a U.K. report appeared that the average costs of a home in the U.K. increased 0.5 percent in November, for a seventh month.

The AUD/USD strengthened as gold, the nation’s third most-valuable raw material export, climbed to a new record high on Tuesday. The CHF rose to parity against the USD as a report showed that the national economy returned to growth in the third quarter, the Swiss GDP rose 0.3 percent from a quarter earlier.

The EUR/USD continues trading in a longterm bullish environment but failed to cross its first weekly pivot resistance line for the fourth time. Now it seems that the bulls taking some profit, the DMI indicate a decreasing upward trend and we have to allow for declines near to the second Fibonacci fan. If this support is not strong enough the EUR could find a much stronger support at its pivot point around 1.4987.

After the currency pair broke through its resistance lines at 17.221 rather 17.4691 it rose to its highest level in November. Since that time the USD rebounded and fell below both resistances and touched its mid-term trend-line. Could this line give enough support to cross the 17.2210 level, the currency pair may aim the 17.4691 again. Also the RSI showed an oversold market and may support the bulls.

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