U.S. dollar weakened against the euro on Tuesday

Good morning from Hamburg and welcome to our latest Daily FX Report. The Dow and S&P 500 closed at record highs on Tuesday, lifted by further gains in healthcare shares and hopes for a stronger global economy. The S&P 500 scored its fourth straight day of gains. Actavis Plc, Gilead Sciences and other biotechs were among the biggest drivers, a day after Allergan agreed to be bought by Actavis. The Nasdaq biotech index rose 2.1 percent. The S&P health care index added 1.6 percent. Shares of Actavis were up 8.7 percent at $269.60, helped by bullish analyst notes, while Gilead's stock rose 3.3 percent to $103.71 percent.

However, we wish you a successful trading day!

Market Review – Fundamental Perspective

Japan's currency fell through 117 yen to the U.S. dollar, a low last touched in October 2007, but recovered some as the dollar declined against the euro and other major currencies. The yen fell against the dollar after Abe's comments, extending recent losses in the wake of stimulus measures announced by Japan's central bank. But some investors later unwound positions, putting dollar/yen at 116.88 yen.
The U.S. dollar weakened against the euro on Tuesday on a better than expected survey of German sentiment and gained against the yen. The greenback has been gaining against the euro and the yen in recent months as the Federal Reserve is expected to begin raising interest rates next year, while the European and Japanese central banks continue highly stimulative policies meant to boost growth in the regions.The release on Wednesday of the Fed's October meeting minutes will be watched for any signs that low inflation could delay an expected rate increase. Some traders say the U.S. dollar rally may need new impetus to continue its bull run. German analyst and investor sentiment rose in November for the first time in almost a year, surpassing expectations and raising hopes of an improvement in Europe's biggest economy after it dodged recession in the third quarter. The data lifted the euro as high as $1.2545 and core euro zone bond yields also climbed after the German survey.
Brent crude oil fell well below $79 a barrel as traders tested OPEC's willingness to agree on a coordinated output cut. Brent crude, which traded above $115 as recently as June, was down 91 cents to $78.40 per barrel while U.S. crude lost $1.30 to $74.34.

Daily Technical Analysis

EUR/JPY (Daily)

After touching the support level at 135.52, the bulls took control over the currency pair and the JPY highly lost in value versus the EUR. At the moment the pair is close to its resistance level of 146.63 which, accoriding to the indicators, may prevent the yen from further losses as it appears to be to strong to pass.

Support & Resistance (Daily)