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[LF.Anastasia]

Forex Analytics of LiteForex of 27.09.10: JPY: Japanese Yen goes up for the 6 consecutive sessions; upward movement however may be suspended

At the Forex currency market the Japanese Yen rate continues to go up on Monday – the USD weakness gives the JPY a chance to regain from the fall caused by intervention.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it is moving along the signal line not giving any signal. Stochastic Oscillator has not identified a signal today being in the oversold area.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 84.45 the pair will go to 84.70 and 85.20. If the level of 84.10 is exceeded, sellers’ targets will be the levels of 83.60 and 83.00.
The head of the Bank of Japan noted today that the state of the Japanese economy was caused not only by the national currency rate, although this had its effect to some extent as well – just remember that talk about authorities’ fight with deflation in economy had place long before the Yen established its price records.
Market became anxious on Friday – traders had discussed opportunity of another intervention by the Bank of Japan into the currencies trading when the pair USD/JPY soared up above the level of 85.00 with no apparent reason. Players did not get any official confirmation of the new intervention.
We would remind that currency intervention conducted by the Bank of Japan last week was intended to reduce significant fluctuation at the currency market however it would not help the country to curb deflation. Noda noted also that China should continue to work out currency reforms. Finance Minister Noda noted on Friday that although different countries interpret intervention differently he believes that his country’s actions are appropriate; however he agrees that the whole background of the process should be explained. Naoto Khan won elections and became the head of the Democratic Party, retaining the leader’s chair. In response the Yen surged to a new peak as Khan is not so ardent supporter of the currency intervention as his rival Odzawa. The last events showed that investors’ joy was premature.
The head of the Bank of Japan Shirakawa said on Wednesday that intervention conducted on 15 September was the only logical solution to the issue of the growing cost of the Yen as the situation required urgent intervention and economic salvation from the impact of the expensive domestic currency. The head of the Bank Shirakawa made a statement in which he noted that authorities should closely monitor the downside risks to the national economy; the politician gave an indication that the Bank’s further intervention is probable. On Thursday Shirakawa noted that intervention would help to appease Forex market; currency market as well as stock market is unstable although the economy itself demonstrates moderate recovery.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 27.09.10: CAD: Canadian Dollar stands still despite positive signals

At the Forex currency market the Canadian Dollar rate makes no headway at the beginning of the week being close to the opening levels and ignoring signals.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD, and it goes down giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: bearish sentiments will intensify for the pair in case of breakdown at the level of 1.0210 – than sellers’ targets will be the levels of 1.0160 and 1.0110.
Canadian economic situation remains stable. Statistics released in September did not please investors a lot: thus number of began constructions in Canada reduced by 3% m/m at the same time number of new houses foundations totaled to 183 thousand. If the situation does not improve in the nearest 3-4 months, the CAD will be under significant pressure. The Canadian trade balance deficit increased to 2.7 billion CAD in August against 1.8 billion in July. It was caused by the exports volume reduction which traditionally supports economy.
At the meeting 2 weeks earlier the Bank of Canada decided to raise interest rate level to 1% per annum (+25 basis points). 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 emphasized 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 some stimulation of the financial system will be continued, further monetary policy tightening as well as rate rise is not excluded.
According to Timothy Lane, the deputy of the Bank of Canada governor, the economic recovery rate in Canada is more moderate now compared with the previous quarters. The country’s economy grows only due to the public and private spending while actual GDP is still not far from its pre-crisis level.
Leading indicators index in Canada increased by 0.5% in August, retail sales reduced by 0.1% in July.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 27.09.10: AUD: Australian Dollar determines movement direction

At the Forex currency market at the beginning of the week the Australian Dollar determines its movement direction.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD however it goes down forming a pair sell signal. Stochastic Oscillator has not identified a signal yet.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9610 the pair will go to 0.9650 and 0.9685. In case of breakdown at the level of 0.9570, sellers’ targets will be the levels of 0.9540 and 0.9500.
The Australian economy has not undergone significant changes since last week.
According to the data released earlier GDP level in Australia rose to the maximum of the last three years in QII demonstrating increase 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 made it possible not to undertake drastic measures to tighten monetary policy so far.
As became known on Wednesday leading indicators index in Australia increased by 0.4% to 269.5 in July as per Westpac-Melbourne estimation; at the same time its annual growth rate reduced to 6.8% against the previous level of 7.4%. As the chief economist Bill Evans noted current forecast assumes that average growth in 2010 will amount to 3.5% and it will be steady until the end of the year despite sudden changes in some sectors.
Coincident indicators index also increased by 0.4% (+4.3% y/y) in July
Evans stressed that such data can encourage the RBA to raise interest rate to 4.75% at the next meeting.
Following quite aggressive statement made by the head of the Reserve Bank of Australia Stevens earlier where he emphasized that the natural resources boom would continue in the medium term resulting in the Australian economic growth which would be in keeping with the trend and in the year of 2011 would accelerate- the Aussie began to grow. Stevens noted also that if the economy slowdown risks are not justified the Bank will start monetary tightening policy.
The minutes of the RBA last meeting was released earlier; it indicated that the regulator may increase interest rate if the situation in the country requires. The next RBA meeting is scheduled for 5 October and market believes that the RBA will announce interest rate increase again then. Now the rate is at the level of 4.50% per annum and it has been maintained at this level for nearly half a year.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 28.09.10: Sideways trend for the pair was caused by the lack of the catalyst

The pair EUR/USD is traded close the five months highs at the Forex currency market on Tuesday however for the second day it is moving sluggishly in the sideways in the absence of any significant catalysts.
By 10.25 Moscow time the Euro is at 1.3442 against the closing session level of 1.3455 yesterday.
The Eurozone data will attract investors’ attention today, in the afternoon traders will be focused on the U.S consumer confidence index statistics release for September.
Market believes that consumers’ interest in the USA will remain low due to the obscure outlooks of the American economy.
Most likely the pair EUR/USD will be in the range of 1.3300-1.3500 on Tuesday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 28.09.10: GBP: British Pound Sterling predictably declines on Tuesday

At the Forex currency market the British Pound Sterling rate goes down on Tuesday.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it is going to go down giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: in case of breakdown at the level of 1.5800 bearish sentiments for the pair will intensify and then sellers’ targets will become the levels of 1.5740 and 1.5700.
The Bank of England representative Bean noted yesterday that the main purpose of the regulator’s soft policy is to stimulate consumer spending which will support the country’s economy in the medium-term.
Bean described MRS current approach as aggressive and directed exclusively to combat financial crisis.
The data on the retail sales level in Great Britain released last week appeared to be very weak, demonstrating decline by 0.5% while investors had expected growth by 0.3% in August. It is an alarm bell for the economy: it indicates in particular that people feel cautious and alerted regarding their spending as the British economy outlooks are still very uncertain.
The Bank of England interest rate is at the level of 0.50% per annum now where it remains for five consecutive months.
The UK statistics leaves much to be desired. Thus as per Hometrack estimation houses prices reduced by 0.4% on monthly basis (+1.0% y/y) in September. It means that released statistics showed once again that the rise in spring was not a stable growth.
Statistics released earlier did not make anyone happy either. It became known that approved mortgage applications in the UK amounted to 31800 in August; the data released before that showed that mortgage approvals in the UK amounted to 45 thousand in August; previous value was 47 thousand; Rightmove data earlier demonstrated another decline in the houses prices; the situation in the sector seems deep gloom.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 27.09.10: CHF: Swiss Franc continues to drift in the sideways

At the Forex currency market on Tuesday Swiss Franc rate continues to be in the narrow range where it has been for four days.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF however it is going up giving ground for a pair buy signal. Stochastic Oscillator is giving a pair sell signal on Tuesday.
Forex recommendation: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9870 the pair will go to 0.9930 and 0.9960. If the level of 0.9780 is exceeded, traders’ targets will be the levels of 0.9730 and 0.9100.
At the last week meeting Swiss National Bank decided to keep interest rate at the level of about 0.25% for three months. The Bank announced that at the current interest rate inflation level in the country would amount to 0.7% this year and 0.3% in 2011. By the year of 2012 inflation level will hit the level of 1.2%. Thus indicated inflation level makes it possible for the SNB to leave monetary policy unchanged which affected the Franc’s rate.
Swiss economy seems stable at the moment: 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.
Earlier positive data was released on the Swiss Exports in August: the index increased by +8.6% on annual basis.
As Swiss Customs administration recorded in the documents surplus increase is associated with the expensive Franc. Furthermore extra working day in August also counted.
It became known earlier that investors’ optimism index ZEW in Switzerland declined to -5.1 in September against the previous level of 9.1.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 28.09.10: JPY: Japanese Yen tends to continue its growth

At the Forex currency market the Japanese Yen is traded upward; daily chart however indicates clearly that the JPY growth suspended in anticipation of external catalysts.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY however it moves along the signal line preventing signal formation. Stochastic Oscillator is not giving a clear signal either today.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 84.40 the pair will go to 84.70 and 85.20. In case of breakdown at the level of 84.00 traders’ targets will be the levels of 83.40 and 83.00.
Investors began to feel concern about the Bank of Japan policy last Friday – traders started to discuss the probability of another intervention into the currency trading by the Bank of Japan when the pair USD/JPY had soared up above the level of 85.00 with no apparent reason. Traders did not get official confirmation of the new intervention. We would remind that currency intervention conducted by the Bank of Japan last week was intended to reduce significant fluctuation at the currency market however it would not help the country to curb deflation. Noda noted also that China should continue to work out currency reforms. Finance Minister Noda noted on Friday that although different countries interpret intervention differently he believes that his country’s actions are appropriate; however he agrees that the whole background of the process should be explained. Naoto Khan won elections and became the head of the Democratic Party, retaining the leader’s chair. In response the Yen surged to a new peak as Khan is not so ardent supporter of the currency intervention as his rival Odzawa. The last events showed that investors’ joy was premature.
The head of the Bank of Japan Shirakawa said earlier that intervention conducted on 15 September was the only logical solution to the issue of the growing cost of the Yen as the situation required urgent intervention and economic salvation from the impact of the expensive domestic currency. The head of the Bank Shirakawa made a statement in which he noted that authorities should closely monitor the downside risks to the national economy; the politician gave an indication that the Bank’s further intervention is probable. On Thursday Shirakawa noted that intervention would help to appease Forex market; currency market as well as stock market is unstable although the economy itself demonstrates moderate recovery.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 28.09.10: AUD: Australian Dollar fails to determine movement direction

At the Forex currency market the Australian Dollar rate does not goes round in the circle near the opening levels which has been observed for the second consecutive day. The currency cannot find movement direction actuator which prevents it from making headway.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD however it goes down giving grounds for a pair sell signal. Stochastic Oscillator gives a similar signal today.
Forex recommendations: in case of breakdown at the level of 0.9550 the pair will go to the levels of 0.9510 and 0.9450. If it does not happen the Aussie will continue to go round in the circle within the narrow range.
The Australian economy has not undergone significant changes since last week.
The next RBA meeting is scheduled for 5 October and market believes that the RBA will announce interest rate increase again then. Now the rate is at the level of 4.50% per annum and it has been maintained at this level for nearly half a year.
According to the data released earlier GDP level in Australia rose to the maximum of the last three years in QII demonstrating increase 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 made it possible not to undertake drastic measures to tighten monetary policy so far.
As became known on Wednesday leading indicators index in Australia increased by 0.4% to 269.5 in July as per Westpac-Melbourne estimation; at the same time its annual growth rate reduced to 6.8% against the previous level of 7.4%. As the chief economist Bill Evans noted current forecast assumes that average growth in 2010 will amount to 3.5% and it will be steady until the end of the year despite sudden changes in some sectors.
Coincident indicators index also increased by 0.4% (+4.3% y/y) in July
Evans stressed that such data can encourage the RBA to raise interest rate to 4.75% at the next meeting.
Following quite aggressive statement made by the head of the Reserve Bank of Australia Stevens earlier where he emphasized that the natural resources boom would continue in the medium term resulting in the Australian economic growth which would be in keeping with the trend and in the year of 2011 would accelerate- the Aussie began to grow. Stevens noted also that if the economy slowdown risks are not justified the Bank will start monetary tightening policy.
The minutes of the RBA last meeting was released earlier; it indicated that the regulator may increase interest rate if the situation in the country requires.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 29.09.10: Euro needs catalysts to continue its growth

The pair EUR/USD is moving sluggishly at the Forex currency market on Wednesday; after upsurge yesterday the Euro is in no hurry to grow awaiting today’s statistics.
By 10.40 Moscow time the Euro is at 1.3578 against closing session level of 1.3585 yesterday.
Following the release of the U.S. weak data on Tuesday night the Unified European currency headed up despite trader’s apprehension during the day regarding the Eurozone sovereign debt.
Positive statistics came this morning from Asia: Tankan index rose significantly in Japan and increase in production has been observed again in China. Thus the Euro is not planning to go down so far however it needs catalyst to continue its ascending trend.
Presumably the pair EUR/USD will be in the channel of 1.3400-1.3610 at the mid-week trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 29.09.10: GBP: Despite the rise in Pound the situation remains ambiguous

At the Forex currency market investors bought out the British Sterling Pound which dipped yesterday.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it continues to go down giving grounds for a pair sell signal. Stochastic Oscillator is not giving a clear signal today.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.5860 the pair will go to 1.5900 and 1.5970. If the level of 1.5790 is exceeded buyers’ targets will be the levels of 1.5750 and 1.5700.
It became known today that mortgage lending in Great Britain increased by 1.7 billion pounds in August; consumer lending in the country rose by 1.5 billion pounds in August.
The Bank of England representative Posen noted yesterday that one should not underestimate the potential for economic growth in the UK; measures to increase incentives are perfectly logical in this situation. According to him there are obvious reasons now for buying British bonds and it would be better if Central banks coordinated their efforts.
The Bank of England representative Bean noted earlier that the main purpose of the regulator’s soft policy is to stimulate consumer spending which will support the country’s economy in the medium-term. Bean described MRS current approach as aggressive and directed exclusively to combat financial crisis.
The Bank of England interest rate is at the level of 0.50% per annum now where it remains for five consecutive months.
The UK statistics leaves much to be desired. Thus as per Hometrack estimation houses prices reduced by 0.4% on monthly basis (+1.0% y/y) in September. It means that released statistics demonstrated once again that the rise in spring was not a stable growth.
Statistics released earlier did not make anyone happy either. It became known that approved mortgage applications in the UK amounted to 31800 in August; the data released before that showed that mortgage approvals number in the UK amounted to 45 thousand in August; previous value was 47 thousand; Rightmove data earlier demonstrated another decline in the houses prices; the situation in the sector seems deep gloom.