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[Shuvalov]

NZD:THE PAIR IS AIMED TO BREAK THROUGH SUPPORT LEVEL OF 0.8150

At the Forex currency market theNew Zealand rate shifted downward from yesterday’s level of 0.8300,reflecting general strengthening of the position of the USD at Forex market.Quotes will have to test support level of 0.8150 on Thursday.
Forex forecast: MACD indicatorfor the pair NZD/USD goes down in the positive area, reflecting“bull” divergence and indicating low purchases and starting sales.Stochastic Oscillator has left overbought zone and goes down in the neutralzone giving a sell signal.
Forex recommendations: off themarket: in case of breakdown at the level of 0.8150 the pair will go to 0.8100and 0.8090.
Macro-economic situation in NewZealand is stable. External background bears the most influence on NZD.
Trade balance deficit in NewZealand decreased to -2.76 billion in January against -4.75 billion. Economistspredicted that level of deficit would be -2.77 billion NZD.
According to the data releasedearlier, export prices in New Zealand rose by 1.7% q/q in Q4 against -4.0% inQ3. Import prices increased by 3.2% on quarterly basis for the reporting periodagainst previous decline of 3.4%.
Index of business activity BNZ inthe service sector rose to 53.6 points in January against preliminaryexpectations of 50.9 points. The report showed that growth has been recorded infour out of five components of the index; orders of new companies have becomethe main catalyst for growth. Employment in the sector increased to 54.2 pointswhich is the maximum since November 2007.
House price index REINZ fell by1.4% m/m (+25.2% y/y) in January against preliminary expectations of decline of0.1% m/m. Unemployment rate in the country dropped to 6.3% in Q4 2011 againstthe level of 6.6% a quarter earlier. The data is positive and indicates thatemployment sector as one of the main supportive factors for the economy canguarantee stability even in case of external pessimistic impact.
Activity index in the servicesector fell to 50.6 points (-5.6 points) in December. Trade balance amounted to+NZ$338 billion in December against the level of -NZ$307 billion in November.However, this positive factor has already been incorporated into the price. GDPin New Zealand increased by 0.8% q/q (+1.9% y/y) in Q3 against the forecast of+0.6% on quarterly basis. GDP in Q2 rose by 0.1% q/q (+1.5% y/y) against thelevel of +0.9% q/q (+1.6% y/y) in Q1.
Statistics released last weekshowed that that activity in the manufacturing sector of New Zealand increasedby 1.3% in Q4 against the decline of 1.4% earlier. The data supported thecurrency.
Earlier Reserve Bank of NewZealand left interest rate unchanged at the level of 2.5% as expected. RBNZnoted in the comments that there is no point to revise interest rate at themoment.

 

[Shuvalov]

AUD:AUSTRALIAN DOLLAR GOES DOWN TO SUPPORT LEVEL AT 1.0370

At the Forex currency market the Australian Dollar rate is under pressure after reversing from the target resistance level at 1.0640. The first support level goes through the level of1.0450, which is the previous level. Current target level of reduction is at1.0370. The specified levels are oversold foundations of slow moving average of Ichimoku indicator.
Forex forecast: MACD indicator for the pair AUD/USD went into negative area, after moving through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator goes down, pushing away from the overbought zone and is not giving a clear signal.
Forex recommendations: in case ofbreakdown at the level of 1.0500 the pair will go to 1.0450 and 1.0370.
China is one of the main trading partners of Australia; therefore the AUD actively reacts to statistics fromthis country. Latest statistics from China did not make investors happy.
Comments of the BNRC Companyadded oil into the fuel. Company’s management circulated a press- releaseexpressing dissatisfaction with the tax on royalties; the AUD traders were quick to close positions. The pair AUD/USD fell by one figure instantly.
Inflation in Q4 showed zerogrowth in the country against the forecast of rise of 0.4% on quarterly basis.Retail sales fell by 0.1% m/m in December versus the forecast of growth of0.2%.
Such data can trigger the reviseof the interest rate in ARB next month.
Meeting of the RBA last week hasneutral outcome: interest rate was kept unchanged at the level of 4.25% perannum. Comments of the Bank’s Governor Mr. Stevens were just plain: hesaid that the state of Australian economy enables to keep monetary policyunchanged.
Statistics released earliershowed that unemployment rate amounted to 5.2% in January against 5.1% earlier. Number of employed reduced by 15.4 thousand against the forecast of growth of 5 thousand.
It became known earlier thatindex of leading indicators WESTPAC rose by 0.6% m/m in January against revised growth of 0.7% m/m in December.

 

[Shuvalov]

JPY: JAPANESE YEN IS EXTREMELY VOLATILE

At the Forex currency market the Japanese Yen rate maintains tendency to consolidate at the achieved levels. Thegrowth of the currency pair USD/JPY has shifted into correction from thereached highs of 84.00 and target now reduces to 82.40.
Forex forecast: MACD indicator forthe pair USD/JPY goes down in the positive area and maintains a buy signal. Stochastic Oscillator has come out of the overbought zone and is giving a sellsignal.
Forex recommendations: in case ofbreakdown at 83.00 the pair will go to 82.40.
The key factor of growth for theYen is repatriation of the Japanese capital at the end of the fiscal year inthe Country of the rising Sun. (The end of the fiscal year begins on 31 Marchin Japan).
Country’s GDP has been revised upward although it is still in the negative zone. Trade balance of thecountry remains in deficit.
Statistics released earlier showed that real revised GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. Inaddition, current account balance amounted to -Y437.3 billion against the forecast of +Y322.3 billion; while private consumption increased by 0.4% q/qlast quarter against the forecast of 0.3% q/q.
No changes took place at the meeting of the Bank of Japan in March: the Regulator left the interest rate inthe range of 0-0.1% per annum; assets repurchase program has not been revisedeither.
Presently, volume of assets repurchase program amounts to 30 billion yen; it has been expanded by 10billion yen a month earlier. Government insisted on expanding QE again; however the Bank did not take such decision.
The Bank of Japan clarified that at the moment the Bank has been working on expansion of lending program aiming to stimulate economic growth up to 3.5 trillion yen from 3 trillion yenearlier.
The head of the Bank of Japan Mr.Shirakawa noted earlier that the regulator intends to easy monetary policyuntil inflation reaches the target of 1%.
Minutes of the February meeting of the Bank of Japan showed that some members of the Bank think that it wouldbe expedient to establish thres hold for inflation target at the level of 1-2%, while one vote was given for the target at 2%.

 

[Shuvalov]

EUR/USD: CURRENCY PAIR STUMBLED OVER RESISTANCE LEVEL OF 1.3290

Correction will be continued forthe pair EUR/USD on Thursday as statement of the head of the U.S. Federal Reserve B. Bernanke about preservation of the monetary policy in the countryhas affected Forex currency market.
Trades closed at the level of1.3200 on Wednesday against starting session at 1.3220.
The reason for enthusiasm for the USD was raised by the statement of Bernanke that the USD preserves stability over the last years and that FR is content with the strong dollar.
On the other hand, high pricesfor energy resources can cause slowdown of economic growth in short term. European monetary authorities should not impose German type of economy to theperipheral countries of Eurozone.
Mostlikely the pair EUR/USD will be in the range of 1.3220-1.3150 at the tradingsession on Thursday.

 

[Shuvalov]

NZD: SALES IN NZD HAVE NOT SUBSIDED
At the Forex currency market the New Zealand rate continues to go down at the end of the week, interest to high yielding currencies is not very high in the market.
Forex forecast: MACD indicator for the pair NZD/USD went through the signal line from top to bottom and is now in the negative area, giving a sell signal. Stochastic Oscillator goes down in the neutral zone and is giving a similar signal.
Forex recommendations: off the market: in case of breakdown at the level of 0.8060 the pair will go to 0.8050 and 0.8010.
According to statistics released this week, GDP in New Zealand increased by 0.3% on quarterly basis in Q4 against the rise of 0.7% q/q a quarter earlier.
Weak data on economic growth did not meet expectations despite the world cup of rugby and stable state of construction sector.
Deficit in the balance of paymnent in New Zealand decreased to -2.76 billion in January against -4.75 billion. Economists predicted that level of deficit would be -2.77 billion NZD.
According to the data released earlier, export prices in New Zealand rose by 1.7% q/q in Q4 against -4.0% in Q3. Import prices increased by 3.2% on quarterly basis for the reporting period against previous decline of 3.4%. Index of business activity BNZ in the service sector rose to 53.6 points in January against preliminary expectations of 50.9 points. The report showed that growth has been recorded in four out of five components of the index; orders of new companies have become the main catalyst for growth. Employment in the sector increased to 54.2 points which is the maximum since November 2007. Activity index in the service sector fell to 50.6 points (-5.6 points) in December. Trade balance amounted to +NZ$338 billion in December against the level of -NZ$307 billion in November. However, this positive factor has already been incorporated into the price. Statistics released last week showed that activity in the manufacturing sector of New Zealand increased by 1.3% in Q4 against the decline of 1.4% earlie.
Earlier Reserve Bank of New Zealand left interest rate unchanged at the level of 2.5% as expected. RBNZ noted in the comments that there is no point to revise interest rate at the moment. House price index REINZ fell by 1.4% m/m (+25.2% y/y) in January against preliminary expectations of decline of 0.1% m/m. Unemployment rate in the country dropped to 6.3% in Q4 2011 against the level of 6.6% a quarter earlier. The data is positive and indicates that employment sector as one of the main supportive factors for the economy can guarantee stability even in case of external pessimistic impact.

 

[Shuvalov]

AUD: AUSTRALIAN DOLLAR IS STILL ON SALE
At the Forex currency market the Australian Dollar rate was sold out at the closing trading session on Thursday, sale intensified at the end of the week.
Forex forecast: MACD indicator for the pair AUD/USD went into negative area, breaking through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator goes down in the neutral zone and is ready to enter into the oversold zone. It gives a similar signal.
Forex recommendations: in case of breakdown at the level of 1.0360 the pair will go to 1.0350 и 1.0310.
Local trading floors continue to respond to the developments in China and ongoing slowdown in Chinese economy, causing significant sales in the AUD. Oil to the fuel was added by the report of the Australian government on commodity market which stated that export prices for energy resources (coal) will grow very slowly which will put pressure on the currency.
Indeed, there all grounds to believe that demand for iron ore in China will slow down. Investors reacted negatively to the latest comments of BNR company in the middle of the week. Company's management circulated a press- release expressing dissatisfaction with the tax on royalties. The AUD traders were quick to close positions.
Inflation in Q4 showed zero growth in the country against the forecast of rise of 0.4% on quarterly basis. Retail sales fell by 0.1% m/m in December versus the forecast of growth of 0.2%. Such data can trigger the revise of the interest rate in ARB next month.
Statistics released earlier showed that unemployment rate amounted to 5.2% in January against 5.1% earlier. Number of employed reduced by 15.4 thousand against the forecast of growth of 5 thousand. Index of leading indicators WESTPAC rose by 0.6% m/m in January against revised growth of 0.7% m/m in December.
Meeting of the RBA last week has neutral outcome: interest rate was kept unchanged at the level of 4.25% per annum. Comments of the Bank's Governor Mr. Stevens were just plain: he said that the state of Australian economy enables to keep monetary policy unchanged.

 

[Shuvalov]

JPY: JAPANESE YEN IS BACK TO GROWTH
At the Forex currency market the Japanese Yen rate was traded upward on Thursday, due to new surge of interest to safe currencies among investors.
Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and is moving along the signal line not giving a clear signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.
Forex recommendations: in case of breakdown at 83.30 the pair USD/JPY will go to 82.10 and 81.80.
The Bank of Japan stated yesterday that rules of Volkner should be reviewed more than once, in case of Japan, adoption for this rule will mean that all profits from Japanese state bonds will be abated. The Regulator will advance his opinion at the meeting of Big Twenty.
Statistics released this week showed that trade balance in the Country of the Rising Sun amounted to -0.31 trillion yen in February against -0.49 trillion yen. This is a negative signal.
The key factor of growth for the Yen is repatriation of the Japanese capital at the end of the fiscal year in the Country of the rising Sun. (The end of the fiscal year is on 31 March in Japan). Country's GDP has been revised upward although it is still in the negative zone. Trade balance of the country remains in deficit. Statistics released earlier showed that real revised GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. In addition, current account balance amounted to -Y437.3 billion against the forecast of +Y322.3 billion; while private consumption increased by 0.4% q/q last quarter against the forecast of 0.3% q/q.
Minutes of the February meeting of the Bank of Japan showed that some members of the Bank think that it would be expedient to establish threshold for inflation target at the level of 1-2%, while one vote was given for the target at 2%. The head of the Bank of Japan Mr. Shirakawa noted earlier that the regulator intends to ease monetary policy until inflation reaches the target of 1%.

 

[Shuvalov]

CHF: SWISS FRANC IS TRADED IN THE USUAL RANGE
At the Forex currency market Swiss Franc rate finished trading on Thursday without significant changed and remained in the usual oversold range.
Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from top to bottom and entered positive zone, giving a buy signal. Stochastic Oscillator left beyond the oversold zone and is giving a similar signal.
Forex recommendations: in case of breakdown at 0.9140 the pair USD/CHF will go to 0.9150 and 0.9180. Consolidation close to the current levels is possible at the end of the week.
It became known on Thursday that imports increased by 0.7% y/y to the level of 14.04 billion francs in February, while imports rose only by 1.2% y/y (16.72 billion francs) last month. Balance of trade surplus amounted to 2.68 billion francs in February increasing against the previous level of 1.5 billion francs.
Volume of industrial output in manufacturing sector of Switzerland declined in Q4- volume of industrial output amounted to -1.4% y/y for the reporting period against the level of -1.9% in Q3. Orders of new industrial enterprises fell by 2% in Q4 2011. According to statistics released earlier, unemployment rate in Switzerland amounted to 3.4% in February, remaining unchanged.
GDP in the country rose by 0.1% q/q (+1.3% y/y) in Q4 against the forecast of zero change (+1.1% y/y). This is good data, indicating that Swiss economy is getting used to expensive Franc. The regulator expects that inflation in 2012-2014 will be in the range of 0.6% tо +0.6%; growth of GDP will be at the level of 1.0% this year.
Manufacturing sector is still weak in Switzerland; however it demonstrates the signs of recovery. Manufacturing activity index SVME increased to 49.0 points in February against the forecast of 48.5 points. Statistics released on Monday showed that real retail sales increased by 4.4% in January against the growth by 1.7% y/y in January.
Three- month Libor rate of Swiss National Bank remained unchanged at the level of 0%. In general, SNB views on monetary policy remained unchanged.

 

[Shuvalov]

GBP: BRITISH POUND WAS ON SALE ON THURSDAY
At the Forex currency market the British Pound rate was traded downward at the trading session on Thursday.
Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it is moving along the signal line, while volumes are minimal and is not giving a clear signal. Stochastic Oscillator tends to go out of the overbought zone and started to shape a sell signal.
Forex recommendations: in case of breakdown at the level of 1.5800 the pair GBP/USD will go to 1.5780 and 1.5750. Consolidation close to the current levels is possible.
According to statistics released this week, retail sales in the UK fell by 0.8% m/m (+1.0% y/y) in February. At the same time sales excluding fuel decreased for the same amount last month; index in January was revised upward to +0.3% m/m.
The Pound negatively reacted to statistics which was below forecast, although sales of the GBP started before the data was made public.
It seems that weak labour sector and high level of inflation continue to put pressure on the retails sales index.
Unemployment rate was 5.0% in February, number of unemployed increased by 7.2 thousand. Weak employment sector prevents economic recovery of the country in general.
Situation, however is not that hopeless, for example, total volume of mortgage lending in the UK amounted to 10.7 billion pounds in February against 10.65 billion pounds in January. The data demonstrates stability in the construction market, which is favourable for the national economy in short term.
According to the representative of British monetary authorities, Mr Osborn, assessment of efficiency of the current budget is possible only when the indices are summed up statistically. Only after that it is be clear if the budget promotes economic growth or not. Osborn assured population of Great Britain that social programs, such as pensioners' payments will not be affected when a new budget will be adopted; however tax burden for the well-off people will be increased.

 

[Shuvalov]

EUR/USD: EURO IS IN CONFUSION AGAIN

The pair EUR/USD finished trading downward on Thursday despite strong American statistics.
Trades for the pair closed near 1.3180 against starting level at 1.3216.
Market did not respond too energetically to the U.S. employment statistics, which was positive: number of claims for unemployment benefits fell by 5 thousand for a week, to the level of 348 thousand, which is the absolute minimum since 2008.
The joy did not last long: representative of EU Mr. Van Rompuy noted late afternoon on Thursday that situation is Europe was at stake in November-December and it is far from being perfect. State of affairs in Spain raises concerns again.
Therefore, the major pair fails to consolidate above 1.3230/1.3250.
Most likely the pair EUR/USD will be in the range of 1.3100-1.3220 at the trading session on Friday.