The MSCI Asia−Pacific Index of regional shares slipped 1.5 percent

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 01/13/10

Good morning and welcome to Varengold’s Daily FX Comment. Today, shares in the Asian session started with negative performances after data from china reduced optimism on the economic recovery. We, wish you a nice and successful trading day.

The JPY climbed near a one-week high against the EUR as Asian stocks decreased the most in more than five weeks as a result of China deciding to raise banks’ reserve requirements. The decision sparked concerns that the move could slow China’s purchases of natural resources and other imported goods. The MSCI Asia-Pacific Index of regional shares slipped 1.5 percent. Yesterday, the EUR/JPY fell to a low of 131.63 after opening at 133.64. The Yen also gained against the USD climbing for the third day. The USD/JPY dipped to a low of 90.73, which was the lowest point since December 21st. The EUR fell to a 10-month low against the CHF in anticipation of the German report today, which is expected to show that Europe’s biggest economy contracted at the fastest annual pace in at least 38 years. According to the survey, Germany’s economy shrank at an annual rate for 4.8 percent last year, which would be the most since 1971. The EUR/CHF is still trading near the low of Monday at 1.4724, which was the lowest level since the middle of March 2009. The USD-Index climbed for the first time in four days after the Federal Reserve Bank of Philadelphia President Charles Plosser said that policy makers must increase interest rates “well before” unemployment falls to an acceptable level.

Since the end of the last year, the NZD/JPY has been trading inside a horizontal trend channel. After keep trading close to the upper resistance level around 68.50 during the past three trading days, the pair pulled back and reached the support around 67.00 for the third time. In addition the pair crossed the lower Bollinger Band which could be a sign for an oversold market and a rebound towards the upper line of the channel.

After reaching its lowest point since the middle of October around 1.6400, the GBP/CAD turned back and reached the resistance level from the middle of December which stays around 1.6800. As you can see, the RSI indicator is signalizing an overbought market, which could give a sign for a powerful resistance and a pullback towards the low from October.