LiteForex's analytics

[LF.Anastasia]

Forex Analytics of LiteForex of 08.09.10: JPY: Yen is getting stronger and stronger

At the Forex currency market the Japanese Yen rate continues to grow regardless the numerous verbal interventions of the monetary politicians; the currency is in demand with investors due to the global instability.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it continues to go down, giving a pair sell signal. Stochastic Oscillator is also giving the USD sell signal against the Yen, being in the oversold area.
Forex recommendations: sellers’ targets today will become the levels of 83.00 and 82.50.
The head of the Democratic Party Ozzava entered the political scene imperceptibly: he used to refrain from making comments until recently, however in the last few days his opinion is widely carried in all the news. Today in particular the politician stated that the Bank of Japan should respond immediately to what is happening at the currency market, despite the questionable success of the sole currency intervention.
Earlier Ozzava noted that the possibility of the currency intervention by the Bank of Japan should not be excluded– at the same time 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 he 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 means 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.
As became known on Tuesday morning the Bank of Japan kept the interest rate unchanged at the level of 0.1% per annum, lending volume was also left unchanged.
The head of the Bank Shirikawa noted in his comments that authorities are closely monitoring the course of events at the currency market and the growth of Yen is a negative factor for the exports. However the measures to be taken by the Bank will depend of the state of economy rather than on market fluctuation.
Speaking about the prospects Shirakawa stated that the U.S. economy is recovering, however its future is obscure and the growth rate is below expectations. At the same time monetary authorities in Japan should be focused on the downside risks in order to halt them as the main task now is to increase the growing capacity.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 08.09.10: AUD: Australian Dollar goes up, supported by the gold prices increase

The Australian Dollar rate is going up at the Forex currency market today smoothing over yesterday’s fall which followed the primary market.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it is going up, giving a pair buy signal. Stochastic Oscillator is giving a similar signal on Wednesday.
Forex recommendations: buyers’ targets today will be the levels of 0.9240 and 0.9315.
As it became known this morning number of mortgage loans in Australia increased by 1.7% in July, which exceeded analytics expectations. Tomorrow morning the Australian labour market statistics will became available; according to the forecast number of jobs will increase by 25 thousand, unemployment rate itself will reduce to 5.2%.
It became known earlier that the Reserve Bank of Australia kept the current interest rate unchanged at the level of 4.50% per annum as markets had expected. At the same time there was nothing new in Mr. Stevens’ comments: he stressed that the world economy outlook is still vague although the Australian economic recovery rate is quite acceptable.
The rate will be maintained at the current level for the five consecutive months and investors do not expect it to change until the beginning of the next year.
According to the data released earlier 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.
We would remind that the data released earlier is of some importance too, according to it private construction spending in Australia reduced by 0.4% (-4.8% y/y) in QII. For economists released 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.09.10: Euro is under pressure this morning

The pair EUR/USD is losing positions at the Forex currency market on Thursday morning following the publication which once again gave rise for investors to avoid risks.
By 10.20 Moscow time the Euro is at 1.2702 against closing session level of 1.2720 yesterday.
Investors had the reason to fall into brown study due to the publication in the press in which the chief economist of the European Central Bank Mr. Stark noted that German banks are undercapitalized and in need of additional liquidity. Monetary Politician also pointed to many imperfections in the country’s banking system: in particular the need for more flexible negotiations in the Basel lII system and also solutions of a number of deposits issues.
At the same time the “Beige Book” released yesterday in the USA noted that despite apparent slowdown of the American economic recovery rate there is the rise of activity in a number of sectors.
There is a lot of macro-statistics to be released today so it is probable that the market volatility will increase.
Most likely the pair EUR/USD will not go beyond the range of 1.2650-1.2790 on Thursday.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 08.09.10: GBP: British Pound goes down again, prospects are obscure

At the Forex currency market the British Pound Sterling goes down on Thursday amid investors’ expectations of the Bank of England decision on the interest rate and subsequent comments of the monetary authorities.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is going up, giving grounds for a pair buy signal. Stochastic Oscillator is giving a pair sell signal, being in the neutral zone.
Forex recommendations: in case of breakdown at the level of 1.5500 the pair will go to 1.5550 and 1.5590. If the level of 1.5430 is exceeded, sellersэ targets will be the levels of 1.5370 and 1.5320.
The Bank of England interest rate decision will become known this afternoon, it is expected to be left unchanged. However subsequent comments of the head of the Bank and other politicians will be of interest.
The data released today showed that overall trade deficit in Great Britain amounted to 4.916 billion pounds in July against the level of 3.932 billion pounds.
As became known on Wednesday production in the UK manufacturing sector increased by 0.3% on monthly basis (+4.9% y/y) in July. Industrial production rose by 0.3% as well, while the rise by 0.4% was expected. Halifax houses prices statistics became an incentive for the growth in the morning – the Pound went up to the level of 1.5480.
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 become more complicated; analytics note that there is ground for concern even now.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.09.10: JPY: Yen continues to grow, investors are risk averse

The Japanese Yen rate continues to consolidate at the Forex currency market on Thursday - amid uncertainty of the external background players avoid risk and shift to safe assets.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is going down giving a ground for a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: in case of breakdown at the level of 83.35 the pair will go to 83.00 и 82.50.
The Yen no longer responds to the monetary politicians’ verbal attacks in its address- not a single measure has been implemented from all those mentioned by the Japanese authorities and amid another wave of uncertainty and obscurity at the global capital market traders are risk averse and turn to the safe harbors.
An interesting fact is worth noting: the head of the Democratic Party Ozzava entered the political scene imperceptibly: he used to refrain from making comments until recently, however in the last few days his opinion is widely carried in all the news. Today the politician stated that the Bank of Japan should respond immediately to what is happening at the currency market, despite the questionable success of the sole currency intervention. Earlier Ozzava noted that the possibility of the currency intervention by the Bank of Japan should not be excluded– at the same time 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 he 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 means 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.
As became known on Tuesday morning the Bank of Japan kept the interest rate unchanged at the level of 0.1% per annum, lending volume was also left unchanged.
The head of the Bank Shirikawa noted in his comments that authorities are closely monitoring the course of events at the currency market and the growth of Yen is a negative factor for the exports. However the measures to be taken by the Bank will depend of the state of economy rather than on market fluctuation. Election in Japan will take place next week, on 14 September so the volatility on the floors might increase.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.09.10: CHF: Franc gives USD a chance to regain

At the Forex currency market on Thursday Swiss Franc rate goes down in pairing with the USD, however the pair USD/CHF is still in the sideways within the range of 1.0110-1.0190.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going down, giving a pair sell signal. Stochastic Oscillator failed to form a signal on Thursday.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0130 the pair will go to 1.0180 and 1.0230. If the level of 1.0060 is exceeded, sellers’ targets will be the levels of 1.0025 and 0.9980.
Swiss economy seems to be stable: 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) and 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.
Investments into the CHF are getting more and more attractive for the Forex investors: market realizes that the SHF does not constitute a menace at the moment and is not planning to do it in the nearest future. 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.
Information released last week 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.
Swiss statistics released earlier was not the most positive: number of unemployed in the country increased by 0.55 thousand in August, it became the first growth rate in 6 months. Altogether number of unemployed has reduced by 33.5 thousand since the beginning of the year. Unemployment rate remained at the level of 3.6% in August.
It is possible that due to the fact that investors are risk averse this week Franc will become of the most attractive currencies again.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.09.10: AUD: Australian Dollar rate continues to go up

The Australian Dollar feels good at the Forex currency market: favourable statistics on the Australian labour market released this morning supported the currency growth.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is growing, giving a pair buy signal. Stochastic Oscillator is giving a similar signal on Thursday.
Forex recommendations: if the positive momentum maintains buyers’ targets will be the levels of 0.9300 and 0.9265.
The following Australian data was released today:
– Unemployment rate in August: 5.1% against the previous level of 5.3%;
– Employment rate came up to +30900 against the previous level of +23500.
Statistics is of course positive: number of jobs increased by 30.9 thousand with the forecast of growth by 27 thousand, so the growth rate continues for about 6 months.
Companies’ confidence in the future makes it possible to speak about future positive dynamics in the consumer spending sector which will support the national economy significantly. However it should be also remembered that inflationary pressure rise will follow too and that will eventually force the RBA to take actions.
It became known earlier that the Reserve Bank of Australia kept the current interest rate unchanged at the level of 4.50% per annum as markets had expected. At the same time there was nothing new in Mr. Stevens’ comments: he stressed that the world economy outlook is still vague although the Australian economic recovery rate is quite acceptable. The rate will be maintained at the current level for the five consecutive months and investors do not expect it to change until the beginning of the next year.
According to the data released earlier 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.09.10: CAD: the Bank of Canada interest rate decision supports currency

At the Forex currency market on Thursday the Canadian Dollar continues the growth which started earlier in pairing with the USD; the CAD has found support in the country.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going down, giving grounds for a pair sell signal. Stochastic Oscillator has not formed a clear signal being in the neutral zone.
Forex recommendations: sellers’ targets today will be the levels of 1.0300 and 1.0250.
The Bank of Canada decided to raise interest rate level to 1% per annum (+25 basis points) at the meeting. Although the decision was entirely predictable Forex market responded to this by buying up CAD, ignoring monetary politicians accompanying comments that the situation in the economy is vague and uncertain.
In the release the Bank of Canada emphasizes that national economy growth rate slowed down in QII this year although the process is within the forecast scope. The Bank gave an indication that although the financial system stimulation will be continued, further monetary policy tightening and the rate raise are not excluded.
In June the Bank of Canada announced a decision to raise interest rate to 0.75% per annum which was the second consecutive rate increase. In spite of positive development, the last comments of the Bank’s representatives poured cold water on those who were interested in buying CAD. The Bank noted that the world economy recovery is still in progress; however it is slow and constraint. Bank’s representatives also stressed that further interest rate increase will be carried out with extreme prudence based on the progress in both Canadian and world economy. Most likely by such comment the Bank ensured that they have wiggle room left, not implying that the interest rate increase is impossible in the foreseeable future. The Bank of Canada expects that the country’s economy will grow by 3.5% this year; while the growth forecast in April was by 3.7%. Growth forecast for 2011 was reduced to 2.9% from 3.1%.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 10.09.10: Euro has a chance to grow; investors do not take it

The pair EUR/USD is traded with a slight decline at the Forex currency market on Friday morning as investors’ fears regarding the U.S. complicated economic situation fell by the wayside.
By 10.01 Moscow time the Euro is at 1.2678 against closing session level of 1.2694 yesterday.
At the same time investors are not in a hurry to take advantage of the positive data from China where as it became known on Friday exports level increased by 34.4% in August.
According to the released data Japanese economy increased by 0.4% in QII, while in QI the growth was by 0.1%.
The day is quite in terms of macro-statistics today therefore market will most likely avail itself of the existing information.
Presumably the pair EUR/USD will be in the range of 1.2600-1.2750 on Friday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 10.09.10: GBP: British Pound goes up slightly however chance of downward trend is still high

At the Forex currency market the British pound Sterling rate consolidates slightly today due to the investors’ positive sentiments at the global capital markets, however according to the technical pattern a chance of the downward trend for the pair GBP/USD is still rather high.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it goes down, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal on Friday.
Forex recommendations: in case of breakdown at the level of 1.5370 the pair will start a free fall to the levels of 1.5325 and 1.5280.
The following UK data was released today:
– PPI output in August: -0,5% m/m (+8.1% y/y);
– Net PPI in August: +0.1% m/m (+4.6% y/y).
It was found that PPI prices input and output dropped to the minimum of 6 months in August.
GBP was frustrated by such statistics which indicated availability of the weak points in the country’s economy.
Yesterday the Bank of England left the interest rate unchanged at the level of 0.50% per annum, volume of the assets redemption program was also kept unchanged in the amount of 200 billion pounds sterling.
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 become more complicated; analytics note that there is ground for concern even now.
As became known on Wednesday production in the UK manufacturing sector increased by 0.3% on monthly basis (+4.9% y/y) in July. Industrial production rose by 0.3% as well, while the rise by 0.4% was expected.