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Thursday, August 05, 2010

Good morning from Hamburg and welcome to Varengold’s Daily FX Comment. Important U.S.
reports surprised the market which had expected an uncertain outlook. With this data releases,
the U.S. dollar recovered against several currencies.

Anyways, we wish you a nice and prosperous trading day.

Market Review – Fundamental Perspective

Yesterday, a U.S. report showed that in the past month service industries grew quicker than
assumed. The Index of non-manufacturing business increased to 54.3 from 53.8 in June. In
addition to that another report notifies, that companies added more workers in July than
economists had expected. The payrolls rose by 42,000 workers in July although economists
forecasted a rose of only 30,000. On top of that, the market estimates that a report will show
today that initial jobless claims drop about 2,000 to 455,000 last week. On speculation that the
U.S. economic recovery is slowing down the market had turned to the so called save heaven
JPY which therefore rallied against the USD in the past months. But now, the U.S. dollar climbed
0.6 percent from an eight-month low versus the JPY and traded at 85.27. The USD also
strengthened to a one week high against the Swiss franc and traded at 1.0534. The EUR/USD
also fell 0.5 percent and traded at 1.3161. The GBP lost 0.4 percent against the USD and was at
1.5890.

New Zealand’s currency declined versus all its major counterparts after a report notifies that the
jobless rate rose last quarter more than it has been prognosticated. The unemployment rate
climbed 0.8 percent in the past three months to 6.8 percent. Therefore the market anticipates
that the central bank will slow down the speed of interest rate increases. The NZD/USD
decreased to 0.7286 and the NZD fell 0.8 percent to 62.86 versus the JPY. Australia’s currency
was at 91.60 versus the USD and traded at 79.02 against Japan’s currency. Canada’s currency
gained near to a two-month high versus the USD based on speculations that a report this week
will show that jobs are added for a seventh straight month. The CAD tends to track commodity
prices, so with the rose of the crude oil price also the CAD won 0.5 percent versus the USD and
was at 1.0108.
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Daily Technical Analysis (In this section we provide chart analysis)

Our Focus Currencies for Today

EUR/GBP (4 Hour)

Since the middle of July, the bears have taken control over the currency pair and pull it down
towards its support level around 0.8253. The relative strength indicator is nearly showing us an
oversold market, so we might stay bullish if the pair does not fall under the support line.

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

0.8325 0.8394

0.8253 0.8509

0.8082 N/A
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NZD/USD (4 Hour)

Since the beginning of July, the NZD/USD is trading inside an upward trend channel. The
resistance line around 0.7286 could be a grant to force the trend. We may see further gains
inside the channel if the pair succeeds to cross its resistance level around 0.7286.

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

0.7189 0.7286

0.7148 0.7392

0.7022 N/A
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USD/JPY (4 Hour)

For the past five weeks, the USD/JPY has been trading in a bearish trend. The currency pair
was not able to cross the downward trend line whenever it touched it. We might see further
losses if the bears pull the pair down under its support level around 85.90

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

85.90 86.96

N/A 87.93

N/A 89.08
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NOK/SEK (4 Hour)

After the currency pair had reached a ten month low in the middle of July the bulls take control
and pushed the NOK/SEK close to the resistance level around 1.1943. We might see further
gains inside the upward trend channel if the pair crosses its resistance line at 1.1943.

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

1.1882 1.1943

1.1741 1.1993

1.1621 1.2060
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USD/HUF (1 Hour)

Since the end of July, the pair has been trading outside of its bearish Fibonacci fan. Two days
ago, the USD/HUF moved sideways, then entered the fan and crossed the middle line of it. The
Stochastic indicator supports a continuing bearish trend so we might see further losses inside
the fan.

Intraday Support & Resistance (1 Hour)

Support Levels around Resistance Levels around

212.65 214.10

211.69 215.45

N/A 216.71
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Daily Calendar & Key FX Events

Date Time (GMT) Economic Indicator Last

05.08.2010 10:00 GE Factory Orders YoY (nsa) 24.8%

05.08.2010 10:00 GE Factory Orders MoM (sa) -0.5%

05.08.2010 11:00 UK BOE Asset Purchase Target 200B

05.08.2010 11:00 UK BOE Announces Rate 0.50%

05.08.2010 11:45 EC ECB Announces Interest Rate 1.00%

05.08.2010 12:30 US Initial Jobless Claims 457K

05.08.2010 14:30 US ICSC Chain Store Sales (YoY) 3.0%

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