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Friday, August 06, 2010

Good morning from beautiful Hamburg and welcome to the last Daily FX Report of this week.
Today, we are going to report about the weak U.S economy and the negative effect on their
currency. On the other hand, the fast economic recovery in Europe astonishes the market.

Anyways, we wish you a nice and sunny weekend as well and a successful last trading day.

Market Review – Fundamental Perspective

The market expects that a U.S. report will reveal today, that the number of U.S. lost jobs
increased for a second month. Yesterday, a report showed that initial jobless claims rose 19,000
to 479,000 in the week ended in the past month, which is the most since April. This could set the
Federal Reserve under pressure to take extra steps to keep borrowing costs low. On top of that
Nobel Prize-winning economist Joseph Stiglitz criticized that the U.S. economic recovery is
“anemic” and demanded for a “better-designed” stimulus package. As a result of that the USD is
close to a weekly decrease versus 15 of its 16 most-traded counterparts. The JPY traded near to
an eight-month high against the USD and was at 85.85. Economists prognosticated that a
German report will indicate industrial production rose for a fourth month. Even European Central
Bank President Trichet is astonished about the fast recovery in Europe. Trichet said that the
interest rate is appropriate and will therefore stay at a record low at 1 percent. Based on that the
EUR was close to a three month high against the USD and traded at 1.3182. The EUR/USD
already gained 11 percent after it had reached a 4 year low in June.

Australia’s currency was close to a three month high versus the USD. The AUD/USD climbed
1.2 percent this week and traded at 0.9150. The Reserve Bank of Australia will release today its
quarterly statement on monetary policy whereat the economists do not expect any changes in
central bank’s growth and inflation prognoses. New Zealand’s currency is close to a second
weekly los versus the JPY. The NZD/JPY was at 62.66 and the NZD/USD traded at 0.7299.

Based on speculations that a report today will show that jobs were added in July for a seventh
straight month, Canada’s currency strengthened to a two-month high versus the USD. The
USD/CAD already fell 2.6 percent since July 20th and traded at 1.0108.
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Daily Technical Analysis (In this section we provide chart analysis)

Our Focus Currencies for Today

GBP/JPY (4 Hour)

As you can see the GBP/NZD succeeded to enter the fan again but rebounded at its resistance
level around 2.1831. It remains to be seen if the pair can cross this level and enter the upper line
of the fan or if the bears take control again and pull the pair down.

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

2.1632 2.1831

2.1126 2.2026

2.0739 2.2160
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AUD/NZD (1 Day)

Since the beginning of April, the currency pair has been trading along a bearish Fibonacci fan.
After reaching its lowest level for the past eight months, the AUD/NZD recovered and crossed
the upper line of the upward trend channel. The RSI shows as an overbought market, so we
might stay bearish if the pair rebounds at its resistance level around 1.2597.

Intraday Support & Resistance (1 Day)

Support Levels around Resistance Levels around

1.2385 1.3115

1.2197 1.2756

1.2095 1.2597
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EUR/USD (1 Day)

The EUR/USD has recently crossed its support level around 1.2989 and is continuing to climb in
a bullish trend channel. The Stochastic indicator signifies a trend reversal so we might stay
bearish if the pair does not cross its resistance level aroung 1.3407

Intraday Support & Resistance (1 Day)

Support Levels around Resistance Levels around

1.3101 1.3407

1.2669 N/A

1.2462 N/A
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GBP/JPY (4 Hour)

The bulls took control of GBP/JPY, after the pair had reached the lowest level since February
2009. The GBP/JPY went up inside an upward trend channel and rebounded at its resistance
level around 137.72. We might see further gains if the pair succeeds to break through the
resistance line.

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

1.3605 137.72

131.11 139.58

126.77 144.79
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CAD/JPY (4 Hour)

After the CAD/JPY rebounded at its resistance line around 86.45 (38.2), it dropped down to its
support around 81.71 (0.0), which is the lowest level since the beginning of April. We may see
further wins if the pair crosses the resistance line around 84.65 (23.6).

Intraday Support & Resistance (4 Hour)

Support Levels around Resistance Levels around

83.04 84.65

81.71 86.45

N/A 87.94
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Daily Calendar & Key FX Events

Date Time (GMT) Economic Indicator Last

06.08.2010 10:00 GE Industrial production (MoM) 2.6%

06.08.2010 10:00 GE Industrial production (YoY) 12.4%

06.08.2010 11:00 CA Unemployment rate 7.9%

06.08.2010 11:00 CA Participation rate 67.4

06.08.2010 11:00 CA Full time employment rate 48.9

06.08.2010 12:30 US Change in private payrolls 83K

06.08.2010 12:30 US Change in nonfarm payrolls -125K

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