Good morning from Hamburg and welcome to our last Daily FX Report in this week. As expected, the European Central Bank has cut the benchmark lending rate by a quarterpercentage point to 1 percent, which matches a record low.
However, we wish you a great day and a lot of success in your trades.
Yesterday, the leaders of European countries have begun open-end talks on how to quickly resolve the sovereign-debt crisis in the region. The meeting will deal with a wide range of political, legal and economic constraints amid pressure from financial markets in an attempt to craft a fifth "comprehensive" package to finally resolve the crisis which started with the Greek government discovering an unexpected budget hole in October 2009. The European Central Bank yesterday declared, that it will take measure to make it easier for financial institutions to borrow. It liberated collateral rules and, as a novum, pledged to offer banks unlimited cash for three years. According to ECB President Mario Draghi, the measures "should ensure enhanced access of the banking sector to liquidity." He emphasized his call for a "fiscal compact" and denied, that the ECB would automatically support such an initiative by the purchase of more bonds. The lowered expectations of the ECB purchasing more government bonds made the EUR show a weekly loss versus the USDand the JPY.
The JPY, on the other hand, strengthened against all of its major currency counter parts as signs grow that the global economy is worsening and before a report that may show that growth in industrial output in China slowed in November. The recovery of the Japanese economy, after two straight quarters of contraction and the burden of the record earthquake, is threatened by the global slowdown and a JPYthat is close to the post-World War 2 highs. Today, the Cabinet office said, that the gross domestic product in the nation nation grew by an annualized 5.6 percent in the three months ended September 30. The preliminary figure showed 6 percent.
The EURwas at JPY103.69 after 103.57 yesterday. This week, the EURis set for a 0.7 percent drop against the Japanese currency. Yesterday, it fell to as low as JPY103.01, the lowest level since the 28th of November. The EUR slightly gained against the USDto 1.3345 after 1.3341 yesterday. The JPYwas at USD77.69 after 77.64 yesterday.
Daily Technical Analysis - Our Focus Currencies for Today
As we can see on the chart, after having dropped below the former support level around 1.3430, the EUR/USD currency pair was stabilized at the support level around 1.3270 from where it recovered up to the resistance level around 1.3550. Then we saw a drop below the former support level around 1.3430 and the bullish short-term trend line. Currently, the rate shows light signs of recovery, but with the bearish MACD, a drop to the support level around 1.3270 seems likely.
Intraday Support & Resistance (4 Hours)
As can be seen on the chart, the fall of the GBP against the USD has been stopped by demand at the support level around 1.5425. From this level, the rate recovered and is now trading in a range between the resistance level around 1.5750 and the support level around 1.5580. As the DeMarker is indicating an overbought market and the middle Bollinger band has been broken, we can expect a test of the support level once more.
Intraday Support & Resistance (4 Hours)
Source http://www.fxstreet.com/technical/analysis-reports/da/2011-12-09.html
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