LiteForex's analytics

[LF.Anastasia]

Forex Analytics of LiteForex of 01.10.10: Positive factor for Euro still prevails

The pair EUR/USD goes up on Friday: positive factor for the Euro still prevails despite rather poor German statistics.
By 10.40 Moscow time the Euro is at 1.3646 against yesterday’s closing session level of 1.3634.
As it became known today retail sales level in Germany was low in August demonstrating decline by 0.2% although market had expected growth by 0.4%.
Today’s data from Freddie Mac can also become a factor of pressure for the USD – according to the study average fixed interest rates on the 30 years mortgages plummeted to historic lows of 4.32% per annum last week.
The day is going to be eventful in terms of macro statistics – traders will be focused on Europe today; in the afternoon investors’ attention will be attracted to the U.S. ISM Manufacturing business activity index data for September. It is assumed that the rate will be reduced to the level of 54.5 points.
Most likely the pair EUR/USD will be in the range of 1.3600-1.3750 at the trading session today.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 01.10.10: CHF: Swiss Franc goes up again

At the Forex currency market Swiss Franc rate goes up today. However technical indicators do not give a complete picture of trading so far.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF however it goes up giving grounds for a pair buy signal. Stochastic Oscillator has not formed a clear signal yet being in the neutral zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9840 the pair will do to 0.9880 and 0.9930. If the level of 0.9770 is exceeded, traders’ targets will be the levels of 0.9730 and 0.9700.
Worth noting that in event of a pair’s sale the level of 0.9700 will become a local minimum.
It became known today that PMI-SVME index in Switzerland reduced to the level of 59.7 in September while market had expected growth to 60.7.
Other than that Swiss economy is at the previous level. It 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. Thus Franc has become a serene harbor once again amid dollar’s instability.
Note that statistics in September was not all positive. 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.
We would remind that at its 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 ratel 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 01.10.10: GBP: Is it not a wonder that Pound still grows?

The British Pound Sterling rate goes up again at the Forex currency market on Friday, although trading ended for the British in the red zone yesterday. Despite the desire to strengthen during the session the growing momentum is present again today.
Forex forecast: MACD indicator is close to the signal line on Friday for the pair GBP/USD therefore it is not giving a clear signal. Stochastic Oscillator has not identified a signal either today being in the neutral zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.5750 the pair will go to 1.5790 and 1.5850, in case of breakdown at the level of 1.5700, traders’ target will be the level of 1.5670.
The following UK data was released today:
– Manufacturing activity index PMI in September: 53.4;
– Volume of mortgage loans in QII (as per Bank of England) –STG 6.188 billion.
It became known earlier 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 earlier 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 evident reasons now for buying British bonds and it would be better if Central Banks coordinated their efforts.
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.
Housing market data is not too positive. As it became known on Thursday houses prices increased by 0.1% m/m (+3.1% y/y) as per Nationwide, however three-month trend remains negative. The Pound was not too happy with the data however drastic decline was not observed. Housing market statistics issued before that was not good either. 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 steady growth.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 01.10.10: JPY: Japanese Yen continues to grow fearlessly

The Japanese yen rate continues to go down at the Fiorex currency market on Friday however the Japanese Yen has been gaining strength for the ten consecutive sessions amid the traders’ aversion to the dollars’ positions the JPY looks attractive even in the light of the possible recurrence of the currency intervention.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY however it goes up giving grounds for a pair buy signal. Stochastic Oscillator is giving a similar signal.
However for the time being external background acts a different part compared with the signals increasing Yan’s appeal.
A large block of Japanese statistics was released this morning, special attention should be paid to the inflation levels or rather their absence. Consumer prices in the country of the rising sun have been demonstrating reduction for the 18th consecutive month which clearly indicates deflation. Import in the country is getting cheaper which may force the Bank of Japan to reconsider its attitude to the monetary policy and make it softer.
Expensive Yen continues to put pressure on the import prices in Japan which in its turn leads to the prices reduction in the country which causes deflation. Therefore it is quite probable that the regulator will undertake such action as the expansion of the economy quantitative easing program– it is around 30 trillion yen now.
As for the outlooks for the Yen, currently (excluding technical component impact) the Yen’s growth to the level of 81.0 is quite probable however a chance of technical correction cannot be excluded either.
By the way talk about disadvantages of the intervention arises more often. Japanese Economy Minister said earlier that authorities intend to take all necessary steps if trading situation at the currency market requires. According to him intervention into the currency market was just a temporary measure and no one is going to pour liquidity on the trading floors infinitely.
The head of the Bank of Japan Shirakawa said earlier that intervention conducted on 15 September was the only logical solution to the problem of the Yen’s growing cost as the situation required urgent intervention and salvation of the economy from the impact of the expensive domestic currency.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 01.10.10: AUD: Australian Dollar fails to determine movement direction

At the Forex currency market the Australian Dollar is growing today however the either direction trend is not stable.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD however it goes gown giving ground for a pair sell signal. Stochastic Oscillator is giving grounds for an antipodal signal formation.
Forex recommendations: off the marke.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9730 the pair will go to 0.9780 and 0.9840. if there is breakdown at the level of 0.9640, traders; targets will become the levels of 0.9575 and 0.9530.
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 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 Westpac 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.
The other statistics shows that GDP level in Australia rose to the maximum value 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 01.10.10: CAD: Canadian Dollar tends to continue its growth; signals are mixed

At the Forex currency market the Canadian Dollar rateis traded upward in the end of the week keeping up ascending trend started earlier.
Forex forecast: MACD indicator is close to the signal line for the pair USD/CAD and it is not giving a clear signal. Stochastic Oscillator is giving a pair buy signal being in the neutral zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0350 the pair will go to 1.0390 and 1.0450, if there is a breakdown at the level of 1.0290, traders’ targets will become the levels of 1.0240 and 1.0200.
The Bank of Canada next meeting will be held only on 19 October and market thinks that the interest rate increase is probable. At the meeting two 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.
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.
Leading indicators index in Canada increased by 0.5% in August, retail sales reduced by 0.1% in July.
According to Timothy Lane, governor deputy of the Bank of Canada, 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 04.10.10: Irish problems put some pressure on Euro

The pair EUR/USD is traded downward at the Forex currency market this morning following revival of the talk about Irish problems at the market. However it seems that the main reason for the reduction was the Euro local overbought factor which will be relieved by the technical correction.
By 10.15 Moscow time the Euro is at 1.3776 against the closing session level of 1.3778 on Friday.
According to the data released today public budget deficit in Ireland was higher than the forecast which would increase tension around debt problems of the Eurozone as a whole.
More detailed Irish data will be released today.
However the USD weakness is still there. Controversies regarding the time when the FR will expand quantitative easing of economy program and in particular regarding the volume of the assets repurchase from the market do not subside at the market.
The day is going to be quite today although new statistics will be released.
Most likely the pair EUR/USD will be in the range of 1.3650-1.3820 on Monday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 04.10.10: GBP: New week started with decline for Pound

At the Forex currency market the British Pound rate declines on Monday.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it moves along the signal line and does not give a clear signal. Stochastic Oscillator is giving a pair sell signal today being in the neutral zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.5880 the pair will go to 1.5920 and 1.5970. If the level of 1.5780 is exceeded, traders’ targets will be the levels of 1.5740 and 1.5700.
As it became known on Monday PMI in the construction sector increased to 53.8 in September against the previous level of 52.1 and market forecast of 51.4. Thus statistics today showed that the state of the UK industry did not become worse but it has improved instead.
The Bank of England representative Posen noted earlier 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 evident 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 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.
However housing market is still a weak point of the UK economy. We would remind that as it became known last week mortgage lending in Great Britain increased by 1.7 billion pounds in August; consumer lending level in the country rose by 1.5 billion pounds in August.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 04.10.10: NZD: Weakness of Kiwi today can be easily explained

At the Forex currency market the New Zealand Dollar is traded downward on Monday following the poor statistics and negative forecasts.
Short term and well as medium term outlook for the pair NZD/USD seems to be trading in the range.
The following New Zealand statistics was released today:
– Raw material prices ANZ in September: 2.9% against the previous:-1.4%.
International rating agency Fitch confirmed the New Zealand rating at the level of AA+ today maintaining the forecast at the level “negative”.
The data released earlier showed unexpected increase in unemployment rate in QII in New Zealand – thus domestic demand in the country is limited and economy does not receive additional support for the growth which has been expected by the Reserve Bank of New Zealand. Labour market growth in the country apparently faced some difficulties which the RBNZ held back while saying that the pace of the interest rate increase will be moderate in the future. In this regard the interval in the series of the interest rate rises can be prolonged.
According to the Reserve Bank of New Zealand governor Mr. Bollard, GDP growth in the country will continue in the future however the process of the economic recovery will progress gradually. Bollard said also that inflationary pressure will intensify in the nearest future.
Interest rate in New Zealand is now at the level of 3% per annum. The Reserve Bank of New Zealand increased interest rate for the second time in a row on 10 July – by 25 basis points then it announced an interval in the series of increases. “Termination of the further actions of monetary stimulus is appropriate. The pace and extent of the further interest rate increases will be probably more moderate than it was planned at the meeting in June, said the head of the Bank Mr. Alan Bollard. He also stressed that previous growth of the NZD runs counter to plans to mitigate the prospects of the New Zealand economy. “Economic growth of our trading partners was higher than we expected however prospects have deteriorated. Although raw material prices remain high they became more moderate”.
The next meeting of the RBNZ will be held only on 9 December.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 04.10.10: AUD: Australian Dollar is sold out again

The Australian Dollar started Monday with the decline at the Forex currency market and technical signals indicate the currency weakness.
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 is giving a similar signal being in the neutral zone.
Forex recommendations: traders’ targets today will be the levels of 0.9575 and 0.9530.
Statistics today showed that consumer prices index in Australia increased by 0.1% m/m in September.

The meeting of the Reserve Bank of Australia will be held tomorrow. Market believes that following a long interval the RBA will announce interest rate increase which is now at the level of 4.50% per annum. This level has been maintained for nearly half a year.
According to the data released earlier 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 Westpac 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.
The other statistics shows that GDP level in Australia rose to the maximum value 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.