The USD weakened near to a one week low against the EUR

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 01/05/10

Good morning from wonderful Hamburg and welcome to our Daily FX Report. The USD had a difficult start in the New Year and lost against its most major counterparts. However, we wish you a successful trading day.

The USD weakened near to a one week low against the EUR and reached 1.4419. Furthermore the USD dropped versus the AUD and NZD before an U.S. report this week forecast that service industries rebounded. The AUD touched 0.9129 against the USD and the NZD climbed to 0.7338. Also the JPY rose for a second day versus the USD to 92.29 on speculation that Japanese exporters will take advantages of its recent slide to buy their own currency. The EUR lost against the JPY and reached 133.07.

The Nikkei 225 Stock Average Index and the MSCI Asia-Pacific Index of regional shares climbed 0.8 % after the MSCI World Index of shares rose as much as 1.8 % yesterday. In the U.S. the benchmark interest rate is as low as zero and in Japan it is 0.1 % in contrast to Australia with a benchmark of 3.75 % and New Zealand with 2.5 %. This increases the demand for investors to invest in the South Pacific nations.

Since the middle of December 2009, the USD has been trading in a sideward movement against the CHF. During the last two weeks, whenever the currency pair touched its Pivot Point, the prices recovered. Currently, the USD reached its support anew and it seems that this time the support is strong enough another time. Also the RSI may indicate an increasing trend and a pull back for the USD.

With the beginning of December, the EUR has been trading in a long-lasting bearish trend versus the CAD. Recently, the currency pair touched its support level around 1.4934 and could recover like a few days before. A crossing Momentum through the signal line from below may support a continuing upward trend. The next resistance for the EUR could be around 1.5150.