Fundamental Analisis By InstaForex

[IFX Darika]

Global Recovery Seen Gathering Pace

The global economic recovery is building steam led by strong growth in Asia although considerable risks remain, the Organization for Economic Cooperation and Development says. Its latest economic outlook report projected gross domestic product across OECD countries to rise by 2.7% this year and by 2.8% in 2011. In its last forecast in November, the OECD region was forecast to rise by 1.9% in 2010. The global economy is predicted to grow 4.6% this year.

In the U.S., activity is projected to rise by 3.2% this year and by a further 3.2% in 2011. Euro area growth is forecast at 1.2% this year and 1.8% next while, in Japan, GDP is expected to expand by 3% in 2010 and by 2% in 2011. The U.S. unemployment rate is expected to average 9.7% in 2010 before falling to 8.9% in 2011. The eurozone unemployment rate is forecast to average 10.1% both this year and the next.

"This is a crucial time for the world economy," said OECD secretary-general Angel Gurria. "Coordinated international efforts prevented the recession from becoming more severe but we continue to face huge challenges. Many OECD countries need to reconcile support to a still fragile recovery with the need to move to a more sustainable fiscal path."

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[IFX Svetlana]

Trichet Concerned About Bad Fiscal Policy, Not Weak Euro

The financial stability of the euro area amid bad fiscal policy in certain member countries is the key issue the currency bloc is currently facing and not the value of the euro, the European Central Bank President Jean-Claude Trichet said Monday.

"The euro is a very credible currency which keeps its value," Trichet said, according to the text of an interview with French daily Le Monde, which was published on the ECB website. "The issue is that of financial stability within the euro area on account of bad fiscal policy in certain countries, in particular Greece."

"It is imperative that this be corrected," the policy maker said, adding that fiscal policies in large countries such as Germany, France and Italy were also not exceptions. He blamed fiscally challenged economies for terribly neglecting close multilateral surveillance, which was fundamental according to the stability and growth pact.

When asked about the prevailing nervousness in financial markets, despite a massive rescue plan, Trichet said investors would take some time to regain confidence and sentiment would be restored gradually. "The measures are so significant in terms of both their nature and their scale that there is no doubt that they will have a positive effect on the markets," he said.

The ECB chief said the mechanism to stabilize markets is taking place properly. He noted that the speed at which parliamentary decisions were taken in countries facing fiscal problems was "remarkable". Trichet ruled out Eurozone debt restructuring programme saying that it is substantially low compared to that of the U.S., Japan and the U.K.

The policy maker also denied any Anglo-Saxon conspiracy against the euro. "I simply believe that some international investors struggle to understand Europe and its decision-making mechanisms," he said. "They have difficulty in gauging the historical size of the European construction and in anticipating the capacity of Europeans to take decisions that are just as important as those taken a few days ago."

Further, he called for the establishment of the equivalent of a fiscal union in the euro area in terms of monitoring and supervising the implementation of policies on public finances. He expressed confidence that a quantum leap would be possible if Europe exploit everything the treaties, seen as the starting point of the fiscal union, permit and greatly improve the secondary legislation from Brussels.

Regarding the euro, Trichet said it is a credible currency which inspires confidence, the most important ingredient for the consolidation of Europe's economic recovery. Since its introduction eleven and a half years ago, average annual inflation has been below but close to 2%, in line with the ECB's definition of price stability. The euro's capacity to maintain its value is absolutely essential for the confidence of investors both inside and outside the euro area, he asserted.

With regard to economy, Trichet said recent data suggest economic growth in the second quarter would be slightly higher than expected. However, he urged caution as the region's future growth depends on the ECB policy makers' ability to strengthen confidence as quickly as possible.

Trichet repeated that the ECB is completely independent of governments and pressure groups of any kind. He reaffirmed that the interventions were aimed to enable certain markets to function more normally and that all the liquidity injected through these interventions will be absorbed.

Also on Monday, speaking at the 38th economic conference of Austria's central bank, Trichet said the ECB is not printing money. He reiterated the bank's commitment to preserve its primary objective of maintaining price stability.


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[IFX Svetlana]

Japan Current Account Surplus Widens In April

Japan's current account surplus increased in April from the previous year mainly due to a larger surplus in the trade gap, an official report showed on Tuesday. Separate data released today showed that during May, bank lending in Japan recorded the sharpest annual fall in nearly five years.

The Ministry of Finance said the current account surplus surged 88% year-on-year to JPY 1.24 trillion from JPY 660.6 billion in the previous year. The surplus, however, came in slightly below economists' expectations for a JPY 1.30 trillion surplus and was well below March's surplus of JPY 2.53 trillion.

A trade surplus of JPY 859.1 billion was recorded in April compared to the JPY 167.1 billion surplus a year ago. This was driven by growth in exports outpacing that of imports. Exports surged 42.7% annually to JPY 5.58 trillion, while imports grew 26.1% to JPY 4.72 trillion.

The surplus in the goods & services account stood at JPY 433.6 billion, in contrast to the JPY 260.9 billion deficit in the previous year. At the same time, the deficit in the current transfers account narrowed slightly to JPY 137.6 billion from JPY 138.4 billion in the previous year.

The income account surplus decreased to JPY 946 billion in April from JPY 1.06 trillion a year ago. The deficit in the services account was broadly unchanged at JPY 425.5 billion.

Meanwhile, the surplus in the capital & financial account decreased to JPY 49.3 billion from JPY 275.8 billion in the previous year. The financial account surplus shrank to JPY 72.8 billion from JPY 293.4 billion a year ago. This was largely due to other investment deficit rising to JPY 6.38 trillion from JPY 2.57 trillion last year.

Separately, the Bank of Japan announced that bank lending was down 2.1% year-on-year in May, marking its sharpest decline since August 2005. Standing now at JPY 396.12 trillion, it follows a revised 1.9% contraction in April.

Including trusts, bank lending was down 2% to JPY 458.75 trillion following the 1.8% decline in the previous month. By themselves, lending from trusts was down 1.3% annually in May to JPY 62.6 trillion.

The central bank also revealed that M2 money supply climbed 3.1% annually to JPY 777.2 trillion in May, slightly higher than forecasts for a 2.8% increase following the 2.9% gain in April. The M3 money stock was up 2.3% to JPY 775.1 trillion, exceeding expectations for a 2.1% increase following the 2.2% gain in the previous month. The L money stock climbed 2% annually to JPY 1.46 trillion.

Japan's new Prime Minister Naoto Kan is naming his cabinet today and he is due to be formally sworn in by Emperor Akihito. Deputy Finance Minister Yoshihiko Noda has been named as the new Finance Minister, a post left vacant by Kan. Noda is thought to favor spending cuts and fiscal consolidation to rein in Japan's large public debt level, which is the highest in the industrialized world.

Kan was elected prime minister by lawmakers on Friday, two days after the resignation of Yukio Hatoyama. The former prime minister stepped down over a broken election pledge to move a controversial U.S. military base out of the island of Okinawa.


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[IFX Svetlana]

Eurozone Industrial Production Growth Exceeds Expectations

Eurozone industrial production rose more than expected in April, giving a good start to the second quarter and offering hope that industry will make strong contribution to economic growth despite the region's fiscal woes.

The seasonally adjusted industrial output rose 0.8% on a monthly basis in April, slightly slower than March's revised increase of 1.5%, figures released by Eurostat showed Monday. But, production grew more than the expected 0.6% rise.

On an annual basis, industrial production rose 9.5%, the biggest increase since the series started in 1991. That was also above the expected growth of 8.6%. It followed a revised 7.7% increase recorded in April.

"April's Eurozone industrial production figures suggest that the recovery in the sector continues at a decent pace, despite the fiscal crisis in the region," said Jonathan Loynes at Capital Economics. The economist noted that today's figure will give a solid start to the second quarter and underlines expectations that industry will lead growth. However, Loynes expressed doubt on whether the recovery in the euro area industrial sector will help the weakest economies in the region to cope with the coming fiscal squeeze.

Details of data showed that production of intermediate goods grew by 2.2% month-on-month and that of capital goods rose by 1.1%. Durable consumer goods output fell by 0.1% and production of energy declined by 0.9%. Production of non-durable consumer goods dropped by 1.2%.

Eurozone industrial sector is benefiting from recent improvement in global economic activity and the weak euro. "The manufacturing sector has been the leading light of the Eurozone economy so far in 2010, benefiting from improved domestic and, especially, export demand as well as inventory rebuilding," IHS Global Insight economist Howard Archer said.

However, the recent weakening in the Eurozone manufacturing sector as suggested by the purchasing managers' index indicates that the Eurozone debt crisis has started denting on economic activity. The index in May fell to a three-month low as output and new order growth slowed sharply.

Industrial production in EU27 rose at a slower pace of 0.5% month-on-month compared with 1.4% increase in March. Among the member states for which data were available, industrial production rose in twelve and fell in nine. The highest increases were registered in Lithuania, Estonia and Denmark, while Ireland, Portugal and Greece recorded largest decreases. On an annual basis, production in EU27 grew 7.8%.

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[IFX Svetlana]

Existing Home Sales Show Unexpected Drop But Remain At Elevated Levels

Existing home sales showed an unexpected decrease in the month of May, according to a report released by the National Association of Realtors on Tuesday, with higher sales in the West and the South more than offset by a notable drop in sales in the Northeast.

The report showed that existing home sales fell 2.2 percent to an annual rate of 5.66 million units in May from an upwardly revised 5.79 million unit rate in April. Economists had expected sales to rise to a 6.10 million unit rate from the 5.77 million unit rate originally reported for the previous month.

While existing home sales fell on a monthly basis, NAR said that sales remain at elevated levels amid buyer response to the tax credit, characterized by stabilizing home prices and historically low mortgage interest rates.

NAR noted that existing home sales in May are still up 19.2 compared to the 4.75 million unit rate reported for the same month a year ago.

Lawrence Yun, NAR chief economist, said, "We are witnessing the ongoing effects of the home buyer tax credit, which we'll also see in June real estate closings."

"However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales." he added.

Yun noted that many potential sales are also being delayed by an interruption in the National Flood Insurance Program, particularly in Florida and Louisiana

Subsequently, NAR said its supports Senate amendments to extend the home buyer tax credit closing deadline through September 30 and to renew the flood insurance program.

As mentioned above, the unexpected drop in existing home sales was largely due to a 18.3 percent drop in sales in the Northeast.

Existing home sales in the West and the South increased by 4.9 percent and 0.5 percent, respectively, while sales in the Midwest were unchanged.

The report also showed that the national median existing-home price was $179,600 in May, up 2.7 percent compared to the same month last year. Distressed homes slipped to 31 percent of sales in May compared with 33 percent in April, NAR added.

NAR President Vicki Cox Golder said, "With distressed sales at roughly the same level as a year ago, the gain in home prices is a hopeful sign that the market is in a good position to stand on its own without further government stimulus."

"Very affordable mortgage interest rates and stabilizing home prices are encouraging home buyers who were on the sidelines during most of the boom and bust cycle," she added.

Additionally, NAR said that total housing inventories fell 3.4 percent to 3.89 million existing homes available for sale at the end of May. This represents 8.3 months of supply at the current sales pace, compared with 8.4 months of supply in April.


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[BudakFx]

The fundamental market review for May 24 2010-05-24

The euro was demonstrating the uprise during the second part of the last week, as the investors preferred not to take up too much of short positions after the active selling of the common currency this week.
Investors had fears to assume significant positions in the euro and other currencies after the acceptation of numerous important decisions during the weekend in May. On Friday in Brussels there was a meeting of the working group of the European financial ministers of finances.
A mass exit of the investors out of the euro amid the economic problems deepened the euro this week to a four-year low versus the US dollar, and a number of short positions in the euro reached the record maximum.
According to the analytical experts’ expectations investors are afraid to play actively in favour of the euro or versus the euro, especially taking into consideration the rumors that the European governments can give it a support.
“The market realized the downfalling tendency of the euro though taking up this attitude you are making yourself dependent from a possible intervention”, noted Daragh Maher, Deputy Head of Foreign Exchange Strategy . “The euro is still structurally weak since the cover of short positions which we were observing during the previous week is likely to have sputtered out”, said Tony Morris from ANZ Bank.
In May, the euro has descended by almost 6 %, which gave birth to the rumors that European officials can be worried by such circumstances.

 

[BudakFx]

Wave analysis of GBP/USD currency pair for June 23, 2010 2010-06-23




Having finished the shaping of the group of waves abc yesterday, at the moment the price of GBP/USD is demonstrating the wish of the pound to continue rising motion started June 8. However, as we noted earlier, C wave looks substantially completed. But still it can develop more complicated form that will allow the price increase to the levels near the 52nd figure, however, scenario for new US dollar strengthening has good chances to take place as well. In addition, the indicators allow a probability of such new decline of the pound.


Performed by Alexander Dneprovskiy, Analytical expert
InstaForex Companies Group © 2007-2010

 

[BudakFx]

Wave analysis of GBP/USD for June 24, 2010 2010-06-24






Yesterday, the GBP/USD price continued the stated on Tuesday quite dynamic upward movement, shaping another group of abc waves. It should be noted that considering unproved divergence of MACD such intensive growth of the pound looks rather unfounded and makes us to be careful with keeping long position during the coming to 1.5030. In addition, yesterday’s increase of the British currency made questionable current wave marking in the correctional C.


Performed by Alexander Dneprovskiy, Analytical expert
InstaForex Companies Group © 2007-2010

 

[gemagemuruh]

Terima kasih...cukup membantupaid

 

[BudakFx]

GBP/JPY Elliott wave count and Fibonacci levels June 24, 2010 2010-06-24


The pound/yen is now standing in the flat 133.01-134.95. The breakout of the flat will show the direction of the intermediate trend. According to wave count the larger wave is down, and a smaller degree wave C can be developed. The confirmation of wave C is the break of 133.01, wave C is cancelled in case 134.95 is broken.
The price targets below are Fibonacci retracements of 130.40-136.00 and expansion points off 136.00-133.01-134.95, 134.95-133.62-134.84.
Price targets below the current level:
- 133.51 = objective point (OP)
- 133.10 = contracted objective point (COP)
- 132.69 = expanded objective point (XOP)
- 132.54 = .618 retracement
- 131.96 = OP
- 131.72 = .764 retracement
- 131.36 = super expanded objective point (SXOP)
In case wave C is cancelled and the price moves to the buy side, the targets above will be Fibonacci expansion points off 133.01-134.95-133.62:
- 135.56 = OP
- 136.76 = XOP



(Read more about EWA and Fibonacci levels)
Overbought/Oversold
At the moment the indicator is oscillating around the zero level. If we follow the wave count, i.e. trade in the wave of a larger degree, which is a down wave, short positions should only be initiated on indicator reaching overbought area and the price nearing a Fibonacci resistance off the wave 136.00-133.01. E.g. 136.86 (.618 retracement) or 135.29 (.764 retracement).


Performed by Denis Strelkov, Analytical expert
InstaForex Companies Group © 2007-2010