LiteForex's analytics

[LF.Anastasia]

Forex Analytics of LiteForex of 03.09.10: Today’s statistics will put things into perspective

The pair EUR/USD looks stable at the Forex currency market today and is traded with the lack of initiative.
By 9:40 Moscow time the Euro is at 1.2819 against closing session level of 1.2824 yesterday.
The outcome of the European Central Bank meeting yesterday was the decision to leave interest rate at the previous level of 1% per annum. The head of ECB Trichet said in the speech that financial support to the credit institutions will be provided until 2011.
Investor will be kept in suspense awaiting important statistics release on Eurozone and USA today. Eurozone’s retail sales data for July will be released on Friday, which is expected to be positive. The U.S. labour market statistics for August will be released in the afternoon.
We would also draw attention to the discussion at market that the EU requires to limit short positions on stocks and government bonds. It is believed that unsecured short sales is the precondition for the outbreak of crisis, similar to Greek. It is unlikely that such initiative of the Eurozone will catch traders’ fancy.
Most likely the pair EUR/USD will be in the range of 1.2750-1.2880 on Friday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 03.09.10: GBP: British Pound Sterling makes attempt to go up

At the Forex currency market on Friday the British Pound Sterling rate demonstrates attempts to go up slightly – most likely it is just a rebound after the previous fall.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD however it is going up, giving grounds for a pair buy signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: buyers’ targets on Friday will be the levels of 1.5500 and 1.5540.
According to media reports British companies owe pension funds huge amount of money – Aon publication shows that a total amount of debt increased by 20% within a year and amounted to about 1.2 trillion pounds which in its turn poses significant financial risks.
The Gilt profitability calculated for 20 years reduced to 3.76% which is a ten-year minimum.
By 12.30 Moscow time today traders are awaiting news release on the UK business activity index in the service sector for August.
Meanwhile housing market state fills analytics with apprehension. Houses prices in August declined by 0.9% on monthly basis as per Nationwide estimation, while in July they fell by 0.5% - the index declined twice in a run only once before that, in the winter of 2009.
It appears that unbalance increases in the UK housing market: demand and supply vary and prices are going down due to the high supply.
However, according to economists current decline in prices is just a regular adjustment after the rapid growth rate at the beginning of the year.
According to the data released earlier UK houses prices declined by 0.3% m/m (+1.5% y/y) against the previous fall by 0.1% m/m as per Hometrack. Thus the situation in the housing sector is getting worse. As per the Rightmove report, number of people who buy a house for the first time can decline to the new low even before the end of this year – according to the survey the number of those who planned and bought a house in QIII 2010 amounted to 22.2% against 30.8% a quarter earlier. If experts’ forecast justifies the situation in the UK housing market will get more complicated; analytics note that there is ground for concern even now.
According to economists consumer finance index in the UK is at the low of the year in August – 37.9 points against the previous level of 37.2 points. At the same time the UK quarterly business confidence index has also reduced. All these put together suggest that the spread of pessimism to the households intensifies.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 03.09.10: CHF: Swiss Franc determines trend direction

At the Forex currency market Swiss Franc rate stands still determining movement direction. A lot will depend on the U.S. statistics tonight – if the released data is negative the Franc will revert to the status of the protective currency again.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going up, confirming a pair previous buy signal. Stochastic Oscillator has not formed a clear signal so far.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0180 the pair will go to 1.0220 and 1.0270. If the pair exceeds the level of 1.0070, sellers’ targets will be the levels of 1.0010 and 1.9980.
Yesterday Switzerland pleased investors with another positive data. GDP level in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) in QII against the forecast of +0.8% (+2.6% y/y). Investments into the CHF are getting more and more attractive: market realizes SHF does not constitute a menace at the moment and is not planning to do it in the nearest future.
We would recall that according to the data released earlier private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data-1.80). Index is calculated on the basis of the several indicators and the fact that it is above 1.50 is an indication of the favourable economic development in the country.
Information released on Tuesday helped to clarify Swiss exports situation in 2009. Thus more than 50% of exports were concentrated in the West European countries, in Japan and the USA. For comparison: Swiss GDP in 2009 was 536 billion francs, while exports volume amounted to 181 billion francs – ie 34% of GDP. Worth noting that leading indicator index in Switzerland reduced to 2.18 points in August against the previous level of 2.22 points – economists believe that the data is not too positive, as the slump expectations were not that low; however this factor did not make the overall picture of Swiss economy more negative. Swiss National Bank continues to work hard to keep inflation in the positive area which is a positive factor for Switzerland. The fact that investors are averse to risks at Forex counts in favor of CHF at Forex – public debts as well as budget deficit is at a low level in Switzerland; which is another merit of the CHF.
Market believes that the CHF position is stable due to the low risks of the of the currency intervention in the country.

The CHF tranquility is like the lull before another rebound upward

 

[LF.Anastasia]

Forex Analytics of LiteForex of 03.09.10: JPY: Yen stays put in the absence of news

Japanese Yen rate stays put at the Forex currency market on Friday – in the absence of new information at the market the Yen’s growth rate is going down. However we should remember that aggressive bears can go back into the pair USD/JPY any moment.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, however it is going up slightly, giving grounds for a pair buy signal. Stochastic Oscillator has not formed a clear signal today.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 84.60 the pair will go to 85.00 and 85.50. If the pair exceeds the level of 83.90, sellers’ targets will be the levels of 83.50 and 83.00.
Economic situation in Japan remains unchanged so far.
Following a special meeting on Monday morning the Bank of Japan decided to keep the interest rate unchanged at the previous level of 0.1% per annum; however the bank’s members decided to increase loan program by 10 trillion yen up to 30 trillion yen, loan period was also extended to 6 months. According to the Bank of Japan such measure will enable to keep market rates at a low level which in its turn will help to improve monetary situation. Meanwhile the market expected that the Central Bank would take more drastic measures. It is expected that on 2 September, Thursday, monetary politicians would unveil all the details of the program to stimulate economy.

Cooperation between the Central Bank and Japanese authorities will become closer. Regulators should combine efforts to confront expensive Yen. Next week the details of the government’s new program to stimulate economic system will be unveiled.

If two agencies really integrate efforts, deflation threat for the Japanese economy should retreat quickly and the impact of the Yen will smooth over.
Japanese Prime Minister Khan stated earlier that authorities are planning to review the issue of the radical tax reform soon: they are also going to discuss the issue of fiscal reform.
Khan noted also that government intends to stimulate new jobs creation to assist economy.
On Thursday the camp of expensive Yen opponents was reinforced by one more member: Democratic Party representative Mr. Ozzava said that it is necessary to halt the rise of Yen; however he did not suggest any ways to do it, specifying only that resources of the Bank of Japan in this respect are limited. In general Ozzava stressed that the Yen’s growth is not that crucial in the long term prospects.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 03.09.10: NZD: New Zealand Dollar continues to grow for the third consecutive session

At the Forex currency market the New Zealand Dollar rate continues to grow on Friday; short term trend for the pair NZD/USD seems ascending, while medium term trend: trades in the range.
NZD/USD
Support levels: 0.6950, 0.6825.
Resistance levels: 0.7190, 0.7355.
In general the situation in the New Zealand economy is stable, NZD rate at Forex is supported by the positive Australian statistics.
Interest rate is at the level of 3.0% per annum in New Zealand now. Two weeks ago the Reserve Bank of New Zealand raised the interest rate for the second time at a run – to 25 basis points, then an interval in the sequence of the rises was announced. “Cessation of the further monetary incentive measures is appropriate. The pace and scope of the further rate increases is likely to be more moderate than anticipated in the June statement”, said the Head of the Bank, Alan Bollard in his comment. He stressed that previous NZD growth runs counter to the plans to mitigate New Zealand economy prospects. “Growth in the economies of our trading partners proved to be better than we predicted, however outlooks have worsened. Although prices for the raw materials are still high, they have become more moderate”.
The data released earlier showed unexpected growth of unemployment rate in QII in New Zealand, therefore domestic demand in the country remains limited and economy does not receive additional support for the growth, as has been expected by the Reserve Bank of New Zealand.
Labour market growth in the country has apparently faced some difficulties, which the RBNZ passed over in silence while saying that pace of the interest rate increases will be moderate in the future. Thereby an interval in the chain of the interest rate increases can be quite long lasting.
The head of the Reserve Bank of New Zealand Mr. Bollard noted that GDP growth will continue in the future however economic recovery process has been gradual. Bollard also stated that inflationary pressure will intensify in the nearest future. Worth noting that investors’ risk aversion is probable if today’s statistics will be weak, will put pressure on the pair NZD/USD.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 03.09.10: AUD: Australian Dollar tends to decline

At the Forex currency market the Australian Dollar rate is going down today after some stability yesterday.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it slides down, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: sellers’ targets today will be the levels of 0.9000 and 0.8970.
However the pair may well continue yesterday’s consolidation. It became known today that business activity index in Australia increased to 47.5 in August against the previous level of 46.6 – the news did not encourage traders.
Apparently investors continue to regain from yesterday’s statistics according to which trade balance in Australia reduced to +A$1.89 billion in July against the previous value of +A$3.44 billion.
The narrowing of the Australian’s trade balance puzzled experts, although the decline in the iron ore and coal exports has been already observed earlier.
It is interesting that according to the data released yesterday GDP level in Australia rose to the maximum of the last three years in QII demonstrating consolidation by 1.2% against the forecast of 0.9%. Previous index value was at the level of 0.7%. %. Economists believe that Chinese demand for iron ore is an activator of the Australian economic growth. New interest rate increase hardly threatens Australia. Interest rate in Australia is at the level of 4.50%per annum now. The main and official version of the last RBA meeting is as follows –current level of the inflation decline cannot prevent from undertaking drastic measures to tighten monetary policy
It became known earlier that private construction spending in Australia reduced by 0.4% (-4.8% y/y) in QII. For economists statistics became another stroke to portray a cheerless picture in the construction sector of the country. Thus, the decline in the sector is the highest since the beginning of the 2000’s; nevertheless sluggish growth still continues.
It should be noted that the retail sales data released yesterday appeared to be better than forecasts which along with the housing market data would give the AUD the medium term support. It seems that the demand’s response to the statistics and current situation is becoming more realistic at the market and as a result the Australian Dollar looks more attractive at Forex than its colleagues from the raw material producing countries.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 06.09.10: Euro is rising in price for the fifth consecutive session; investors are tired of being concerned

The pair EUR/USD is stable at the Forex currency market today and is traded in the positive area amid steady external background.
By 12:15 Moscow time the Euro is at 1.2902 against closing session level of 1.2893 on Friday.
The U.S. markets are closed today due to the Labour Day celebration – the absence of the American investors will enable the week to start quietly or even sluggishly. The pair EUR/USD is consolidating for the fifth consecutive session – the fact that the pair is at the peak level of 2 weeks demonstrates investors’ positive outlooks on the Eurozone’s economy, although quite recently there was talk of the second wave of recession.
Macro -economic calendar is almost empty on Monday which gives grounds to talk about flat market today.
Presumably the pair will be in the range of 1.2840-1.2950 at the trading session today.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 06.09.10: GBP: British Pound Sterling is going down despite technical signals

At the Forex currency market on Monday the British Pound Sterling rate is going down despite steady external background and technical signals. Investors are not willing to take risk keeping in mind that the situation at the UK real estate market is getting worse.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, however it is going up slightly, giving grounds for a pair buy signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: taking into account external background: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.5480 the pair will go to 1.5540 and 1.5590. If the current external background maintains, sellers’ targets will be the levels of 1.5500 and 1,5485.
Meanwhile housing market state fills analytics with apprehension. Houses prices in August declined by 0.9% on monthly basis as per Nationwide estimation, while in July they fell by 0.5% - the index declined twice in a run only once before that, in the winter of 2009.
It appears that unbalance increases in the UK housing market: demand and supply vary and prices are going down due to the high supply.
However, according to economists current decline in prices is just a regular adjustment after the rapid growth rate at the beginning of the year.
According to the data released earlier UK houses prices declined by 0.3% m/m (+1.5% y/y) against the previous fall by 0.1% m/m as per Hometrack. Thus the situation in the housing sector is getting worse. As per the Rightmove report, number of people who buy a house for the first time can decline to the new low even before the end of this year – according to the survey the number of those who planned and bought a house in QIII 2010 amounted to 22.2% against 30.8% a quarter earlier. If experts’ forecast justifies the situation in the UK housing market will get more complicated; analytics note that there is ground for concern even now.
According to economists consumer finance index in the UK is at the low of the year in August – 37.9 points against the previous level of 37.2 points. At the same time the UK quarterly business confidence index has also reduced. All these put together suggest that the spread of pessimism to the households intensifies. According to media reports British companies owe pension funds huge amount of money – Aon publication shows that a total amount of debt increased by 20% within a year and amounted to about 1.2 trillion pounds which in its turn poses significant financial risks.
The Gilt profitability estimated for 20 years reduced to 3.76% which is a ten-year minimum.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 06.09.10: CHF: Swiss Franc continues to be traded sideways

At the Forex currency market Swiss Franc rate continues to be in the sideways trend.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going down, giving ground for pair sell signal. Stochastic Oscillator is giving a similar signal being in the neutral zone.
Forex recommendations: sellers’ targets today will be the levels 1.0100 and 1.0060.
It became known on Monday that the Bank of Switzerland currency reserves reduced to the level of 218.1 billion francs in August against the previous value of 219.5 billion francs. At the same time released revised statistics for July has improved.
We can draw to conclusion that SHNB spends less money on holding Franc’s rate in the reasonable range – note that the Franc has consolidated by 10% on average against the Euro since the beginning of the year.
Information released on Tuesday helped to clarify Swiss exports situation in 2009. Thus more than 50% of exports were concentrated in the West European countries, in Japan and the USA. For comparison: Swiss GDP in 2009 was 536 billion francs, while exports volume amounted to 181 billion francs – ie 34% of GDP. Worth noting that leading indicator index in Switzerland reduced to 2.18 points in August against the previous level of 2.22 points – economists believe that the data is not too positive, as the slump expectations were not that low; however this factor did not make the overall picture of Swiss economy more negative. Swiss National Bank continues to work hard to keep inflation in the positive area which is a positive factor for Switzerland. The fact that investors are averse to risks at Forex counts in favor of CHF at Forex – public debts as well as budget deficit is at a low level in Switzerland; which is another merit of the CHF.
Market believes that the CHF position is stable due to the low risks of the of the currency intervention in the country.
Earlier Switzerland pleased investors with another positive data. GDP level in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) in QII against the forecast of +0.8% (+2.6% y/y). Investments into the CHF are getting more and more attractive: market realizes SHF does not constitute a menace at the moment and is not planning to do it in the nearest future. We would recall that according to the data released earlier private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data-1.80). Index is calculated on the basis of the several indicators and the fact that it is above 1.50 is an indication of the favourable economic development in the country.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 06.09.10: JPY stands still awaiting the Bank of Japan decision

The Japanese Yen rate does not demonstrate any appreciable change at the Forex currency market at the beginning of the week. A two-day meeting of the Bank of Japan started today and although market believes that no important decisions are going to be adapted, Forex traders prefer to know for certain.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it is going down, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal, being in the neutral zone.
Forex recommendations: sellers’ targets on Monday are the levels of 83.90 and 83.50.
Regular meeting of the Bank of Japan is taking place on 6-7 September, it is expected that following the meeting explicit statements will be made; and although traders do not expect breaking news, caution in the positions is clearly visible.
This morning monetary politician Ozzava’s advisor noted that the possibility of the currency intervention by the Bank of Japan should not be excluded– however it is required to set clear objectives for the monetary system reforms. The politician noted also that the Bank of Japan has sufficient reserves to overcome deflation even on its own.
Earlier Democratic Party representative Mr. Ozzava came out with a statement regarding economy and expensive Yen: he noted last week that it is necessary to halt the rise of the Yen; however he did not suggest any ways to do it, specifying only that resources of the Bank of Japan in this respect are limited. In general Ozzava stressed that the Yen’s growth is not that crucial in the long term prospects.
Cooperation between the Central Bank and Japanese authorities will become closer. Regulators should combine efforts to confront expensive Yen. Next week the details of the government’s new program to stimulate economic system will be unveiled.

If two agencies really integrate efforts, deflation threat for the Japanese economy should retreat quickly and the impact of the Yen will smooth over.
Japanese Prime Minister Khan stated earlier that authorities are planning to review the issue of the radical tax reform soon: they are also going to discuss the issue of fiscal reform. Khan noted also that government intends to stimulate new jobs creation to assist economy.