The NZD/JPY has been gaining along the Auto Regression Bands (ARB)

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 01/27/10

Good morning from Hamburg and welcome to our Daily Report. Today, we are going to report about the Japanese economy and the nation’s currency. We wish you a nice trading day and successful trades.

Today, the JPY gained against all its major counter parts after the nations exports climbed for the first time since Lehman Brothers Inc. collapsed 15 month ago. According to the Finance Ministry in Tokyo, the Shipments abroad climbed 12.1 percent in December from a year earlier. Imports slid 5.5 percent in December from a year earlier, which was the smallest drop in 14 months. The EUR/JPY has fallen to a nine-month low before a German report today, which is expected to show that the biggest economy in the Euro-Zone has lower consumer prices, which would be a sign that the nation is struggling to rebound. The USD fell for a second day against the JPY on speculation that the Federal Reserve will maintain its pledge to keep interest rates near zero for an “extended period” at the end of its two-day policy meeting today.

The EUR/JPY fell to a low of 125.30, which was the lowest point April 28th 2009. The JPY gained to 89.14 against the USD, which was the lowest level since the middle of December. The JPY also gained against the AUD, NZD and the CHF. It gained to 85.15 versus the CHF, to 80.20 against the AUD and to 62.93 versus the NZD.

After reaching a high around 1.5140 at the end of last year, the EUR/USD pulled down along the Fibonacci retrecement lines. It crossed the 23.6% (1.4610) and the 38.2% (1.4281) level before it finally reached the support line around 1.4016, which is the 50% Fibonacci point. If the market crosses this point as well, it might continue its bearish phase towards the 76.4%, which is around 1.3420.

Since the beginning of July 2009, the NZD/JPY has been gaining along the Auto Regression Bands (ARB) and the support level around 63.00. During the past six touched with the horizontal support level, the market pulled up four times. At the moment the market is trading repeatedly over the support point around 63.00 while this time it also has support from the ARB’s lowest band. If the pair doesn’t break these levels, it might pull back and continue its bullish trend.