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[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 25.10.2010: JPY: JAPANESE YEN IS TRYING TO REACH NEW MAXIMA ON MONDAY

At the beginning of the week in the currency market (forex) JPY is growing rapidly against the background of the G20 decision and generally positive external background.
Forex (forex) Forecast: MACD indicator is in the negative area for the pair USD / JPY on Monday and it decreases which gives a signal to sell the pair. The signal of stochastic oscillator today is the same being in oversold area.
Forex (forex) recommendations: if the level of 80.65 is broken the pair will go to 80.00 and then to a new minimum of 79.75.
The statistics of Japan released on Monday morning is fairly positive (the level of trade balance rose by 54.0% per annum in September up to Y797, 01 billion; the level of exports rose by 14.4% y/y in September which is the tenth month of growth in a row; the level of imports in Japan increased by 9,9% y / y in September which is a continuation of the indicator growing trend the ninth month in a row).
According to the text of monthly report of Japanese authorities released earlier the economic situation of Japan is deteriorating - the last time similar assessment was voiced in the summer of 2008. In addition the first time in 2 months the production forecast estimate is reduced - weak global economy does not contribute to the demand for high-tech products produced by Japan.
As it is noted in the report the unemployment situation remains difficult. Levels of unemployment are high and the prospects so far are uncertain. The main factor of downside risks for corporate profits is low levels of exports and industrial production. The increase of JPY exerts a negative impact on economic sentiments.
Last week Japanese Finance Minister Noda noted that the situation in the labor market was still extremely heavy but the main problem of the authorities at the moment was deflation.
The governor of the Bank of Japan, Mr. Shirakawa, said earlier that the regulator continued to watch carefully the effect on the growth of JPY and that the currency rate might be influenced by quite a number of factors

Earlier Noda noted that during upcoming summits the country would confirm its need to stabilize the financial sector and foreign exchange market and would clarify its position concerning currency fluctuations; he said that the competitive devaluation damages the economy.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 25.10.2010: AUD: AUSTRALIAN DOLLAR TRIES TO REACH NEW HEIGHTS

On Monday in the currency market (forex) AUD continues to grow since last week after a sharp decrease earlier.
Positive external background which reflects the G20 decision not to devalue the currency in order to support exports effect AUD quite favorably.
Forex (forex) Forecast: MACD indicator is in the positive area for the pair AUD / USD and it is growing which gives a signal to buy the pairs. The signal of stochastic oscillator is the same today.
Forex (forex) recommendations: if the level of 1.0000 is broken the pair will go to the local maxima at 1.0040 and 1.0070.
The head of the Reserve Bank of Australia Stevens has said today that the complete elimination of imbalances in the economy will take some time as the global economy needs a strong and sustainable demand. Against such background the changes in the currency market will only perform the function of redistribution of growth of the global economic system.
Stevens has also noted that the increase in flexibility of the yuan will help to work on sharpening of imbalances. Thus Australian politician took the view of the USA.
Last week the text of the RBA meeting report of 5 October was published. The text explains the reasons of the regulator’s decision to keep interest rates unchanged at the level of 4.5%.
Thus according to the RBA at the moment the pause is a symbol of flexibility of monetary policy and the regulator stresses that the decision was thoughtful and measured. Also risks for the economy as well as for the AUD growth were taken into account which ultimately will impact on the inflation.
According to the regulator the inflation will remain in the target range in the short term and will reach the level of 2.75% by the end of the year. The Bank expects inflation near 3% by mid-2012.
The growth of the economy should increase and be strengthened by 4% in two years from the current 3.25%. The market believes that the probability of new rate growth at the next meeting in November is 34%, in December - 52%.
It became known that Westpac leading index in Australia dropped to 0.1% m / m in August against the decline by 0.3% in July. However AUD ignored this information.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 26.10.2010: THE STATISTICS WILL SET THE TONE FOR TODAY'S TRADING OF EUR / USD

On Tuesday morning in the currency market (forex) the EUR / USD pair is increasing slightly although the buying mood today is clearly moderate.
By 9.45 MSK EUR costs 1.3975 against the yesterday’s market close level of 1.3964.
Despite the fact that the growth of EUR earlier was quite serious by the evening the purchases exhausted themselves and today the side trend of the last three days can be seen on the daily diagram of the main pair.
The head of the New York FBI Dudley has said earlier that the Fed should begin a program of additional economic stimulation because the system needs support to avoid a new jump in unemployment rate and reflection of inflation levels.
Today there will be a lot of macro statistics both on the part of the Eurozone countries and the U.S. that is why the market activity will depend on the publishing data.
Most likely the EUR / USD pair will bid on Tuesday without going outside the range of 1.3900-1.4050.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 26.10.2010: GBP: BRITISH POUND CONTINUES TO GROW SECOND SESSION IN A ROW

On Tuesday morning in the currency market (forex) GBP continues to grow.
Forex (forex) Forecast: MACD indicator is in the negative area for the pair GBP / USD but it continues to grow and thus confirms a previous signal to buy the pair. The signal of stochastic oscillator today is the same being in the neutral area.
Forex (forex) recommendations: the targets of buyers today will be 1.5830 and 1.5870.
The head of the Bank of England Mr. King said yesterday that the project Basel III which there had been so many talks about last month wouldn’t be a panacea for a new round of financial crisis. However according to the monetary politician the British regulator will not force the banks to comply with the contract although he himself sticks to more strict views on the problem.
King also said that there was no crisis in the UK housing sector.
This statement is interesting in terms of the fact that the housing sector is now in a recession in comparison with the spring rates. It became known earlier that the level of mortgage lending in the UK dropped to 31,104 in September from the previous level of 31,781 according to the BBA research.
According to preliminary calculations the total expenditure budget in 2010-2011 will amount to 702 billion pounds in 2012-2013 - 665 billion pounds.
Earlier Posen, a representative of MPC, has noted that inflation expectations in the UK continue to be restrained; the markets know that the CPI must go to 2% and the Bank of England will help to do that.
Posen has also emphasized that monetary policy should not be an instrument to combat market bubbles.Last week the UK Finance Minister Osborne noted that the retirement age in the country would be increased up to 66 years in 2020 which would allow the economy to get extra 5 billion pounds. At the moment in Britain the pace of budget cuts are about 6% per annum the budget itself will be reduced by 33% according to the plan of the authorities.
Osborne has also explained that the government's budget in 2014-2015 will be reduced by 55 million pounds the receipt of further 7 billion pounds is expected due to unpaid taxes.
As for the situation of the labor sector Osborne has explained that the reduction of the number of jobs in the public sector is expected on average by 500 thousand.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 26.10.2010: CHF: SWISS CLARIFIES THE DIRECTION OF ITS MOTION; THE SIGNALS ARE POSITIVE

On Tuesday in the currency market (forex) CHF is near the start of today's session but the external background and technical signals indicate the continuation of growth today.
Forex (forex) Forecast: MACD indicator is in the positive area for the pair USD / CHF but it decreases and thus confirms a previous signal to sell the pair. The signal of stochastic oscillator is the same today.
Forex (forex) recommendations: the targets of the pair sellers will be 0.9660 and 0.9610.
Interestingly, the Swiss National Bank, apparently, continues to diversify its assets – the EUR assets dropped to 56% from previous 70%. The ratio of EUR against the currency basket of the SNB was about 50-60% last year - such situation was before the regulator began intervention in order to weaken the franc.
The market believes that GDP in Switzerland will have risen by 3% by the end of the year which is substantially higher in comparison with other countries. The levels of inflation will remain close to low. According to the official statistics in the second quarter GDP in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) against the forecast of +0.8% (+2.6% y/y). The private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data: 1.80).
CHF is regaining interest for investors while USD is declining. Judging by the technical picture of the bidding the pair USD / CHF has a good chance to go down this week.
Last week the Swiss National Bank announced its forecast for inflation and the pressure on CHF decreased. In the SNB document it is noted that the forecast for inflation in the country is reduced until 2013: in 2011the inflation forecast is reduced to 0.3% from 1% earlier; in 2012 the inflation is expected at the level of 1.2% from 2.2% earlier.
Thus inflation will not touch the top of the range at least until the second quarter of 2012 - this gives the SNB another year to rectify the situation in the country's economy. Interestingly the CHF decline in the pair with EUR helps the economic system of Switzerland since the lion's share of exports is directed to the countries of the Eurozone.
A new forecast for the economy and inflation has played in favor of the SNB - the intervention would have the same downward effect on CHF; in this case it would have caused greater resonance in the market. Regulator eased the pressure of strong CHF receiving a temporary advantage to make decisions.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 26.10.2010: JPY: JAPANESE YEN CONTINUES TO GROW AND APPROACHES THE MAXIMA AGAIN

On Tuesday in the currency market (forex) JPY continues to rise and although the purchases of the currency are not large scaled as before JPY continues to approach new historical maxima.

Forex (forex) Forecast: MACD indicator is in the negative area for the pair USD / JPY and it is decreasing thus giving a signal to sell the pair. The signal of stochastic oscillator is the same on Tuesday.

Forex (forex) recommendations: if the level of 80.35 is broken the pair will go to 80.10 and 79.75 which will become a new historical minimum of the pair USD / JPY.

Japanese Finance Minister Noda in the morning continues to charge the market with his confidence that the economy of the country is all right: today he has said that Japan will seek the cooperation with European countries and the United States only if the fluctuations in the currency market are too harsh.

In his opinion so far Japan is interested in the resistance to further USD weakness and thereby to the increase of JPY.

Today a representative of The Japan Iron and Steel Federation Mr. Hayashida has noted that the optimal rate of the yen is now at the level of 90.0.

According to the text of monthly report of Japanese authorities released earlier the economic situation of Japan is deteriorating - the last time similar assessment was voiced in the summer of 2008. In addition the first time in 2 months the production forecast estimate is reduced - weak global economy does not contribute to the demand for high-tech products produced by Japan.
As it is noted in the report the unemployment situation remains difficult. Levels of unemployment are high and the prospects so far are uncertain. The main factor of downside risks for corporate profits is low levels of exports and industrial production. The increase of JPY exerts a negative impact on economic sentiments.

The statistics of Japan released on Monday morning is fairly positive (the level of trade balance rose by 54.0% per annum in September up to Y797, 01 billion; the level of exports rose by 14.4% y/y in September which is the tenth month of growth in a row; the level of imports in Japan increased by 9,9% y / y in September which is a continuation of the indicator growing trend the ninth month in a row).

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 26.10.2010: AUD: AUSTRALIAN DOLLAR IS GROWING STEADILY ON TUESDAY

On Tuesday in the currency market (forex) AUD continues to grow steadily the third session in a row approaching the parity in pair with USD.

Forex (forex) Forecast: MACD indicator is in the positive area for the AUD / USD pair and it increases which confirms previous signal to buy the pair. The signal of stochastic oscillator is the same today.

Forex (forex) recommendations: today the targets of the buyers will be 0.9940 and 0.9985.

Today it became known that the Business Confidence Index in Australia increased up to 9 in the III quarter NAB against the level of 3 in the II quarter.

The situation in the Australian economy remains stable.

Last week the text of the RBA meeting report of 5 October was published. The text explains the reasons of the regulator’s decision to keep interest rates unchanged at the level of 4.5%.
Thus according to the RBA at the moment the pause is a symbol of flexibility of monetary policy and the regulator stresses that the decision was thoughtful and measured. Also risks for the economy as well as for the AUD growth were taken into account which ultimately will impact on the inflation.

According to the regulator the inflation will remain in the target range in the short term and will reach the level of 2.75% by the end of the year. The Bank expects inflation near 3% by mid-2012.

The growth of the economy should increase and be strengthened by 4% in two years from the current 3.25%. The market believes that the probability of new rate growth at the next meeting in November is 34%, in December - 52%.

It became known that Westpac leading index in Australia dropped to 0.1% m / m in August against the decline by 0.3% in July. However AUD ignored this information.

The head of the Reserve Bank of Australia Stevens has said at the beginning of the week that the complete elimination of imbalances in the economy will take some time as the global economy needs a strong and sustainable demand. Against such background the changes in the currency market will only perform the function of redistribution of growth of the global economic system.

Stevens has also noted that the increase in flexibility of the yuan will help to work on sharpening of imbalances. Thus Australian politician took the view of the USA.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 26.10.2010: CAD: CANADIAN DOLLAR IS STRENGTHENING BUT THE CURRENCY NEEDS CATALYSTS

On Tuesday in the currency market (forex) Canadian dollar continues the growth started earlier.
Forex (forex) Forecast: MACD indicator is in the negative area for the pair USD / CAD and it continues to drop which confirms a previous signal to sell the pair. The signal of stochastic oscillator today is the same being in the neutral area.
Forex (forex) recommendations: if the level of 1.0150 is broken the pair will go to 1.0100 and 1.0070.
It became known last week that the Consumer Prices Index in Canada rose to 1.9% y / y in September while basic consumer price index rose by 0.2% in September from the previous level of 0.1%.
In addition the level of retail sales in Canada rose by 0.5% while retail sales excluding cars strengthened by 0,4% in August.
This week a meeting of the Bank of Canada took place. At the meeting it was decided to keep interest rates unchanged at 1% per annum. The previous increase was in September (+25 basis points). According to the regulator who left the rates unchanged against market expectations - while the global economy tries to recover after the crisis it is necessary to examine carefully the aspects of reduction of the incentives in monetary policy.
The Bank of Canada has also reported this week that the forecast of economic growth paces was reviewed downwardly to 2.3% from the previous level of 2.9%. It looks like it is the result of the neighborhood with the USA where the economic situation remains difficult.

The situation in the U.S. continues to affect Canadian economy which increases some risks for the national economy.Last week Canadian Finance Minister Mr. Flaherty noted that the current account balance was an objective indicator for the achievement of strong growth foundation by the G20 countries.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 27.10.2010: THE EURO CONTINUES TECHNICAL CORRECTION

On Wednesday morning in the currency market (forex) The EUR / USD pair is decreasing continuing technical correction from the mark of 1.40 and it hasn’t been able to consolidate the positions higher than this mark.

By 7.45 MSK EUR costs 1.3813 against the yesterday’s market close level of 1.3857.

Last intraday maximum the euro could reach was the level of 1.4050 but the pair hasn’t been able to consolidate its positions higher than 1.40. Now buyers will have to wait more attractive levels for purchasing; recovery of the EUR growth is not excluded from the level of 1.3750.


Yesterday strong statistics on the U.S. supported the USD: thus the level of The U.S. Consumer Confidence Index rose to 50.2 points in October while the market was waiting for growth to 49.9 points.

There will be a lot of statistics from the U.S. today but the news flow starts in the afternoon. The data on durable goods orders in the U.S. in September and the number of sales of newly built housing in the U.S. in September as well as the data on oil stocks for the week are planned to be released.

Most likely the EUR / USD pair will bid within the range of 1,3750-1,3950.

 

[LF.Anastasia]

FOREX ANALYTICS OF LITEFOREX OF 27.10.2010: GBP: BRITISH POUND DECREASES REPEATING THE DYNAMICS OF THE MARKET

On Wednesday in the currency market (forex) GBP is decreasing under the influence of negative trends in the global capital markets. In such conditions it is better to refrain from action.

Forex (forex) Forecast: MACD indicator is in the positive area for the pair GBP / USD and it increases which confirms previous signal to buy the pair. Stochastic Oscillator now doesn’t give a clear signal being in the neutral area.

Forex (forex) recommendations: out of the market.

Possible scenarios: if the level 1.5850 is broken the pair will go to 1.5900 and 1.5940. If the level of 1.5800 is broken the targets of sellers will be 1.5780 and 1.5740.

Today Posen, a representative of MPC, has said that if the growth of inflation is higher than the target mark even by 1% it won’t be critical and to set monetary policy in the direction of quantitative easing it will take some time - more than it was expected.

Posen doesn’t think that now it is necessary to stimulate the British economy additionally.

The head of the Bank of England Mr. King has said earlier that the project Basel III which there have been so many talks about last month won’t be a panacea for a new round of financial crisis. However according to the monetary politician the British regulator will not force the banks to comply with the contract although he himself sticks to more strict views on the problem.

King also has said that there is no crisis in the UK housing sector.

This statement is interesting in terms of the fact that the housing sector is now in a recession in comparison with the spring rates. It became known earlier that the level of mortgage lending in the UK dropped to 31,104 in September from the previous level of 31,781 according to the BBA research.

According to preliminary calculations the total expenditure budget in 2010-2011 will amount to 702 billion pounds in 2012-2013 - 665 billion pounds.
Earlier Posen, a representative of MPC, has noted that inflation expectations in the UK continue to be restrained; the markets know that the CPI must go to 2% and the Bank of England will help to do that.
Posen has also emphasized that monetary policy should not be an instrument to combat market bubbles.