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[LF.Anastasia]

JPY: Time to start Japanese Yen correction has come

At the Forex currency market the Japanese Yen rate is being corrected on Thursday morning – the “bulls” have not been strong enough only a day ago, however today they received support from the external background.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going down, giving a sell signal. Stochastic Oscillator has come out of the oversold zone and going up, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 76.80, the pair will go to 77.00 and 77.30. If upward breakdown does not take place, the pair will consolidate at the current levels.

It is interesting that “bulls” were more persistent this time, external background had also been favourable: interest in the Yen, as a protective currency as slightly subsided and plus to this, there is still a high risk of another round of intervention of the Bank of Japan.

Yesterday investors discussed attempt of Bank of Japan to conduct intervention, which was not successful. The Bank of Japan does not make any comments on this, maintaining its existing position: which is quick reaction in case of need.

It became known earlier that revised industrial output in July rose by 0.4% m/m against preliminary value of +0.6% m/m, which is logical since the decline that is being observed in all sections was caused by the slowdown of the world economy.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q. Statistics released yesterday showed that bank lending fell by 0.5% in August against the decline of 0.6% in July. In addition, index of economical observers who monitor current situation fell to 47.3 points in August against the level of 52.6 points in July.

 

[LF.Anastasia]

AUD: Nothing restrains freefall of Australian Dollar

At the Forex currency market the Australian Dollar rate continues its freefall on Thursday- sales of the AUD are increasing while investors have no interest in risk.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area after breaking through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator goes down in the neutral zone, tending to go into oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9980, the pair will go to 0.9965 and 0.9950. If downward breakdown does not take place, the pair will consolidate at the current levels.

Aggressive sales of the pair can maintain until the end of the week. Australian economy does not provide any pretext for technical rebound, while external background is putting considerable pressure. It became known this week that leading indicators index Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) versus prior expectations of +2.7%.

The AUD neglected this information: there are more influential players on the scene of the currency market. It became known earlier that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%. This data is of general nature and the AUD did not respond to it; however it is obvious that inflationary pressure will continue to grow.

According to the data released earlier trade balance in Australia was at the level of +A$1.83 billion in July against the forecast of +A$1.9 billion, which is slightly better than the data in June, however weaker than predicted. Obviously, external background puts pressure on the economy of the Green Continent. Minutes of the last meeting of the Reserve Bank of Australia which was made public this week, show that current levels of the rates correspond to the existing situation, while medium- term outlooks for economic growth continue to be optimistic.

Companies are ready to hire employees, which is a positive factor, however expensive AUD has forced to review business strategies and plans. The minutes look weird, considering that Australian economy suffers huge losses now, due to the decrease in exports levels and particularly for coal.The data released earlier showed that consumer confidence Westpac in Australia rose by 8.1% m/m in September, reaching the level of 96.9 points.

Index of business conditions NAB in Australia fell by 3 points in August against the level of -1 point in July. The index declined to the lowest level since April 2009, indicating recession in the sentiments and prospects. National Australian Bank Ltd, noted commenting these result, that it reflects increased level of uneasiness and concern about further expansion of the debt crisis.

 

[LF.Anastasia]

NZD: New Zealand Dollar is rapidly descending to the local lows

The New Zealand Dollar rate is traded downward at the Forex currency market on Thursday morning- sales of the currency have intensified because investors are unwilling to take risk due to the problems of the USA and Europe. National data of New Zealand also adds fuel to the fire.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal. Stochastic Oscillator is also going down, sliding into the oversold zone and maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 0.7950, the pair will go to 0.7930 and 0.79000.

It became known today that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1.

Therefore, there is actually stagnation in the economy of New Zealand: GDP has almost stopped rising last quarter, which proves that decision of the RBNZ do not change interest rate was logical. The report has disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

Levels of exports do not support economy of New Zealand: the index decreased by 0.5% last quarter, while the share of imports increased by 1.7%.

As it became known earlier, consumer confidence index ANZ in New Zealand fell to 112.6 points in September against the level of 113.3 points in August. It is clear that macro-economy does not provide any support to the NZD. In addition, it became known that purchasing manager index PMI BNZ in New Zealand fell to 52.9 points in August against the previous level of 53.2 points. The index had been declining for the third consecutive month which demonstrates slowdown in the sector.

The data released earlier showed that current account balance in New Zealand amounted to –NZ$2.0 billion in Q2 against preliminary estimate of –NZ$1.5% billion. It is obvious that economy of the country suffers from the global decline in demand – New Zealand is the country which is focused on exports and supplies dairy products vegetables, wool, therefore much less money will come to the state treasury.

According to statistics released yesterday activity index on the service sector of New Zealand fell by 0.6 points in August, to the level of 53.9 points. At the same time, consumer confidence Westpac in New Zealand remained at the level of 112.0 points in Q3 versus similar level in Q2.

CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. This was another positive feature in the outline of New Zealand economy. It is worth noting that number of permits to construct in New Zealand decreased by 1.4% m/m in July against the forecast of +3.0%. Activity in the construction sector of Australia was at the level of - 6.6 q/q in Q2; which agreed with the revised data in Q1.

 

[LF.Anastasia]

EUR/USD: Euro is being corrected due to statements of G20

The pair EUR/USD is traded upward at the Forex currency market on Friday morning in respond to the statement of “BIG 20”.By 9.30 MSK the Euro is at 1.3493 against yesterday’s closing level of 1.3464.So, the heads of the largest twenty countries stated on Friday morning that they are ready to an urgent and “coordinated” international response to new challenges of global economy”.

Final communiqué said that “the countries are determined to take all necessary steps to preserve stability of the banking system and financial markets if the need be”. The main topic of discussion was the situation in Europe and its debt crisis- yesterday European and American indices fell to annual lows.

Despite the fact that EU, ECB and the U.S. FR have implemented packages of measures aimed at stabilizing the situation, the growth of risks in the world requires new measures. It is quite possible that the Euro has just been technically corrected after the sales of this week, using this minor information as a ground for correction. Most likely the pair EUR/USD will not go beyond the range of 1.3380-1.3530 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound tries to be corrected away from annual lows

At the Forex currency market the British Pound Sterling rate is traded upward on Friday morning after the collapse this week.

forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, giving a sell signal; volumes are increasing. Stochastic Oscillator has come into oversold zone, giving a sell signal.

recommendations: in case of break down at the level of 1.5430, sales target will be the levels of 1.5410 and 1.5380. If downward breakdown does not take place, the pair will consolidate close to the current levels.

As part of the technical rebound the pair can reach 1.5470.As it was made public yesterday, industrial trends CBI amounted to -9 points in September versus the forecast of -5 points. It is extremely negative signal event taking into account that a month earlier the balance of orders amounted to +1 point.Statistics released this morning showed that consumer confidence index Nationwide amounted to 48 points in August versus preliminary level of 49 and the forecast of 47 points.

It is not yet the cause for optimism; nevertheless index of expenditure demonstrates increase: it had been 79 in August against preliminary 72. Consumer confidence is stable so far; although it remains in close proximity to historic lows.

People are ready to spend money; however clearer economic outlooks are required for them to gain more confidence. It became known earlier that retail sales in the UK fell by 0.2% m/m, in August; the index has not changed on annual basis. In addition, Mr. Cable said this morning that program QE will enable economy to regain both consumer and business confidence if they press ahead with a program in the same volumes.

The data released earlier was interesting: index of retail sales in the UK amounted to +0.6% m/m (+5.2% y/y), which agreed with expectations. In addition, consumer price index CPI rose by 0.6% m/m (+4.5% y/y) in August against the forecast of growth by 0.6% m/m. Minutes of the last meeting of the bank of England which was made public yesterday, took market by surprise: all 9 members of the Monetary Committee voted to maintain interest rate at the low levels.

Nevertheless, MPC started to contemplate seriously about expanding of the QE program.It became known this week that house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook.

Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects. External background continues to be the main catalyst for the sales of the GDP- investors are not too willing to buy, keeping risks in mind, although the currency has reached very attractive purchasing levels.

 

[LF.Anastasia]

CHF: Swiss Franc is growing slightly after the decline on Thursday

Swiss Franc rate demonstrates some growth at the Forex currency market on Friday morning, although it is still moving in the narrow range which was set by Swiss National Bank. Judging by yesterday’s dynamics of the pair regulator has to repel the attacks of speculators one after another.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator goes up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.9050, the pair USD/CHF will go to 0.9070 and 0.9090. If upward breakdown does not take place, the pair will consolidate at the current levels.

According to the data released yesterday, index of expectations ZEW in Switzerland fell to -75.1 points in September against the level of -71.4 points in August. Influence of the expensive Franc is obvious.The data released earlier showed that unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points.

The data released yesterday showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July. It is good that “long arms” of the Franc has not reached this important sector. Statistics which was made public before this decision showed that Switzerland slides down to deflation: CPI in August fell by 0.3% m/m against the forecast of decline by 0.2% m/m. The data released earlier showed that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June.

In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points.It became known earlier that trade balance in Switzerland amounted to +0.81 billion in August against the forecast of +1.97 billion: influence of the expensive currency and external background is obvious. Volume of industrial production in Switzerland grew by 2.3% y/y in Q2 against the forecast of +2.7% y/y.

According to Swiss National Bank, GDP will amount to 1.5-2% in 2011 (previously it was the level of 2%); inflation will not exceed the level of 0.4% this year. CPI will be at the level of -0.3% next year and +0.5% in 2013. In addition, the CNB also confirmed its intention to buy foreign currency in unlimited volume in order to prevent growth of the Franc.Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning.

Testing of this opinion earlier has proved once again that this intention is firm. There is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.

 

[LF.Anastasia]

JPY: Japanese Yen remains strong at the end of the week

At the Forex currency market the Japanese Yen rate remains high on Friday –yesterday’s attempt of correction had failed, which led the JPY to local highs. Demand is still preserved from those investors who prefer to wait in the “safe harbor” until the time of turbulence is over.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going down, giving a sell signal. Stochastic Oscillator has come to the overbought zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.10, the pair will go to 75.90 and 75.70.

If downward breakdown does not take place, the pair will consolidate at the current levels. Yesterday’s attempt of the “Bulls” to recoup was not successful because external background deteriorated again; therefore the demand in the Yen went up.In the middle of this week investors discussed unsuccessful attempt of Bank of Japan to conduct intervention.

The Bank of Japan does not make any comments on this, maintaining its existing position: quick reaction in case of need. It became known earlier that revised industrial output in July rose by 0.4% m/m against preliminary value of +0.6% m/m, which is logical since the decline that is being observed in all sections was caused by the slowdown of the world economy.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q. Statistics released yesterday showed that bank lending fell by 0.5% in August against the decline of 0.6% in July.

In addition, index of economical observers who monitor current situation fell to 47.3 points in August against the level of 52.6 points in July. As long as investors continue to flee from risks, the pair USD/JPY will remain under pressure.

 

[LF.Anastasia]

AUD: There is no hope that Australian Dollar can rebound significantly at the end of the week

At the Forex currency market the Australian Dollar rate went up on Friday after the fall to the lows of March and is now making attempt of the technical rebound. However, the currency does not have grounds for full recovery; investors’ interest in the currency is close to zero at the end of the week.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area after breaking through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator has come into the oversold zone, and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9800, the pair will go to 0.9790 and 0.9775. If downward breakdown does not take place, the pair will consolidate at the current levels.

The pair can go to 1.0010 as part of technical correction the end of the week. Australian economy does not provide any pretext for technical rebound, while external background is putting considerable pressure.As it became known earlier trade balance in Australia was at the level of +A$1.83 billion in July against the forecast of +A$1.9 billion, which is slightly better than the data in June, however weaker than predicted.

Obviously, external background puts pressure on the economy of the Green Continent. Minutes of the last meeting of the Reserve Bank of Australia which were made public this week show, that current levels of the rates correspond to the existing situation, while medium- term outlooks for economic growth continue to be optimistic. Companies are ready to hire employees, which is a positive factor, however expensive AUD has forced to review business strategies and plans.

The minutes look weird, considering that Australian economy suffers huge losses now, due to the decrease in exports levels and particularly for coal.The data released previously showed that consumer confidence Westpac in Australia rose by 8.1% m/m in September, reaching the level of 96.9 points. Index of business conditions NAB in Australia fell by 3 points in August against the level of -1 point in July. The index declined to the lowest level since April 2009, indicating recession in the sentiments and prospects.

National Australian Bank Ltd, noted commenting these result, that it reflects increased level of uneasiness and concern about further expansion of the debt crisis. It became known this week that leading indicators index Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) versus prior expectations of +2.7%.

The AUD neglected this information: there are more influential players on the scene of the currency market. It became known earlier that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%. This data is of general nature and the AUD did not respond to it; however it is obvious that inflationary pressure will continue to grow.

 

[LF.Anastasia]

CAD: Canadian Dollar was able to regain some losses

The Canadian Dollar rate is traded significantly upward at the Forex currency market at the end of the week; rebound seems unavoidable after collapse on Thursday, when the CAD fell to the lows of February.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD and goes up steadily, while volumes are high. Stochastic Oscillator has come into overbought zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0260, the pair will go 1.0280 and 1.0320. If upward breakdown does not take place, the pair will remain at the current levels.

As it became known yesterday, volume of retail sales in Canada fell by 0.6% in July against the forecast of 0.3% m/m. In addition, inflation in Canada rose by 0.3% m/m (+3.1% y/y) in August. The data on net CPI showed the rise by 0.2% m/m (+1.6% y/y) in July. In June the indicator fell by 0.7% m/m (+3.1% y/y).

The Bank of Canada believes that GDP of the country will amount to about 2.8% in 2011 (reduction by 0.1% versus forecast of April); in 2012 it will be 2.6% and 2.1% in 2013. According to the evaluation of the Bank, exports performance in Canada is negative because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation even more complicated. The growth in the interest rate in Canada will directly depend on stability in economic development. The head of the Bank of Canada Mr. Carney said earlier that there are several significant obstacles on the way of Canadian economic development. First of all it is the growth of the Canadian Dollar and secondly, it is European debt crisis, plus to this, drawn-out dialogue about the U.S. national debt also casts a dark shade on the Canadian economy. Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.

As it became known earlier, number of begun construction in Canada increased to 205.1 thousand in July, which is higher than the forecast of 194.5 thousand and above the previous level of 196.6 thousand. In addition, trade deficit in Canada was at the level of -$1.6 billion in June against the level of -$1 billion in May, which is probably related to the problems in the neighboring U.S.

The data released earlier showed that unemployment rate in Canada increased to 7.3% in August against the forecast of 7.2% and previous level of 7.2%. In addition, In addition, labor productivity fell by 0.9% on quarterly basis in Q2 against the forecast of decline by 0.7% q/q. It also became known that number of begun construction in Canada fell to 184.7 thousand in August against the forecast at 200 thousand. It is clearly obvious at the moment, that slowdown in the key indicators was caused by the state of the global economy and proximity to the Unites States.

 

[LF.Anastasia]

EUR/USD: a new reason for selloff has occured

The pair EUR/USD is traded downward at the Forex currency market on Monday morning in respond to another external background worsening.

By 9.00 MSK the Euro is at 1.3401 against Friday’s closing level of 1.3497.

The main reason for Euro’s selloff was news from Portugal – the country revised its forecast of economic growth this year to -2.3% against -1.8% before. Earlier the country revised its forecasts upward, but this was not materially backed.

Besides markets are waiting for poor data from Germany today where IFO business climatе is expected to come out at 15-months lows. Evidently, Eurozone debt crisis is widening and this fact makes investors uneasy.

Most likely the pair EUR/USD will not go beyond the range of 1.3350-1.3450 at the trading session on Monday.