Today investors are waiting for the Fed’s Beige Book release

The trading session on the forex market yesterday passed against the background of the renewed wave of anxiety about the euro zone debt crisis. The stocks on European exchanges were falling while on forex market the higher risky asserts declined against USD with the Japanese yen had reached the new maximum levels supported by the drop of the market participants’ risk-appetite.

The American investors came back to the forex market yesterday after the prolonged weekend what increased the activity on the market after the fairly dull trading on Monday. Stocks on U.S. exchanges were declining under the pressure of the negative external background amid the absence of the significant statistical publications. From the macroeconomic indicators released yesterday in USA we can mark out only the employment trends indicator in August which declined to 96.7 points from 97 points in the previous month. The main factor of the pessimistic sentiment on the market became the external news: in Europe the sales were prevailing on the stock market caused by the concernes of the European financial system while Asian share indexes were closed in the red lead by the Japanese Nikkei declined against the background of the growing yen. As a result, U.S. stocks declined yesterday under the pressure of external factors: Dow Jones industrial average fell 1.03% to the level of 10340.69 points, Nasdaq Composite dropped 1.11% while S&P 500 declined 1.15%.

The main reason of the investors’ pessimism yesterday became the article published in the Wall Street Journal where it was stated that according to the European Banks’ stress-tests results the risks of investments in European government bonds were largely underestimated. The other reason of the market participants’ negative sentiment became the macroeconomic statistics from Germany which showed the German factory orders had dropped 2.2% in July against the expected growth of 0.5%. As a result, European stocks dropped to the red yesterday: German DAX lost 0.6%, British FTSE 100 declined 0.58% while French CAC 40 fell 1.11%.

Today in the beginning of the trading session there could be observed a moderate growth of risk-appetite caused by the positive statistics from Japan. Thus, Japanese machinery orders rose 8.8% against the expected growth of 2%, while the current account advanced to 1.46 trillion JPY against the forecasted value of 1.38 trillion JPY. As a result, euro against USD rose to the level of 1.2733 in the beginning of the trading session from the opening level of 1.2679. British pound against U.S. dollar advanced from 1.5353 to the rate of 1.5449.

In Europe today investors waited for the number of important statistical indicators from Germany, Great Britain and France. All in all, the statistics corresponded with the experts’ forecasts: French trade balance  showed the value of -4.2 billion EUR as had been expected, while in Germany the indicator appeared to be at the rate of 12.7 billion EUR against the expected 12.8 billion EUR, in Great Britain industrial production rose 0.3% m/m as the analysts predicted. At 14.00 Moscow time the German industrial production is to be published. The experts expect the 1.1% growth of production during the month. If the forecast is approved the European currency will have the strong support.

Thus, EUR/USD today started the trading session with the rebounding, but was practically brought back by 13.00 Moscow time. By the moment the pair is being traded near the rate of 1.2672. The pairs’ decline  is likely to remain till the publication of German industrial production. The nearest support level is at 1.2645 while the resistance is near 1.2778. After the opening of American session the market sentiment will largely be influenced by the news from USA where the consumer credit and MBA mortgage approvals will be published as well as the Fed’s Beige Book will be released which shows the current economic conditions in each of the 12 Federal Reserve districts covering the entire US. Moreover, the U.S. president Barak Obama will present his economic stimulating program to the U.S. Congress.

GBP/USD is being traded fairly volatile today: British pound has climbed from the opening level of 1.5335 to the resistance at 1.5488, pushed off it and declined to 1.543. The further correction to the rate of 1.537 is fairly probable.
In the beginning of the day the Japanese yen against USD remained the consolidation near the support level of 83.76, but then declined to the rate of 83.37 and was brought back to the level of 83.76 again. If the Beige book and U.S. president’s statements are taken positively by the market participants, U.S. dollar against Japanese yen may well start the rebounding to the rate of 84.4.