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[LF.Anastasia]

Forex Analytics of LiteForex of 05.11.10: CAD: Canadian Dollar goes down due to domestic news

The кate of the Canadian Dollar goes down after six days of growth at the Forex currency market on Friday as soon as Government cancelled Potash sale deal.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD however it goes up today giving grounds for a pair buy signal. Stochastic Oscillator has not formed a clear signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0050 the pair will go to 1.0070 and 1.0100. If the level of 1.0020 is exceeded, traders’ targets will be the levels of 0.9990 and 0.9950.
Six days growing trend started to reverse for the CAD when the Canadian government declined BHP Billiton offer to buy Potash Corp. of Saskatchewan Inc for $38.6 billion. Canadian Dollar dropped to the lows of 15th October which was 1.0048.
Canadian employment data is scheduled to be released today which can intensify volatility in the pair.
At the Bank of Canada meeting held earlier the decision was made to maintain interest rate unchanged at the level of 1% per annum. The last increase took place in September (+25 basis points). According to the regulator who left the rate unchanged despite market expectations, while world economy tries to recover after the crisis, it is necessary to study carefully incentives reduction aspects in the monetary policy.
Central Bank of Canada also reported this week on the downward revision of the economic growth rate forecast for this year to 2.3% against the previous level of 2.9% - apparently neighborhood with the USA where the economic situation remains difficult, has its negative impact. The Bank of Canada made quite aggressive statements. Thus, the head of the bank Carney noted that activity in the consumption sector in Canada will slow down and economic growth will become more moderate.
The Bank of Canada will start intervention only in case of extreme situation at the market when the economy will be in jeopardy.
It became known earlier that Canadian economy has resumed its growth –Canadian GDP increased by3% in August after the recession in July, which agreed with the forecast. Manufacturing sector provided support to the economy. Oil and gas production also supported country’s economy. (+1.5%). Manufacturing sector increased by 0.5% in August, wholesales sector growth amounted to 1.1%.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 05.11.10: AUD: Australian Dollar began to decline after reaching a new 28-year high

At the Forex currency market the Australian Dollar rate began to decline in the afternoon today after reaching a 28 year high in pairing with the USD.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it goes up confirming a pair buy signal. Stochastic Oscillator is not giving a clear signal being in the overbought zone.
Forex recommendations: in case of breakdown at the level of 1.0182 the pair will go to 1.0210 and 1.0270.
The pair has again reached the 28-year high this morning, coming up to the level of 1.0183 amid demand from the accounts registered in the Middle East and also due to the interest to the AUD from exporters
On Tuesday this week the Reserve bank of Australia decided unexpectedly to raise the interest rate to the level of 4.75% per annum against the previous level of 4.5%, which was a surprise to the market. The regulator noted in the comments that country’s economy is vulnerable to external influence and has too little spare capacity. The risks of inflation still remain and it will make sense to proceed with policy tightening more actively.
According to International Monetary Fund, the Reserve Bank of Australian shall raise interest rates as the inflation should be chilled out and the outlook risks should be reduced. As the IMF report stated the regulator agreed that if the downside risks will be reduced, the policy of the rates will dictate their growth.
IMF believes that the Australian economy looks quite strong due to the demand in iron ore from China. The IMF report also stressed that the AUD rate seems overrated by 5-15%.
Earlier the catalyst for the AUD consolidation was the U.S. Federal Reserve decision on the volume of QE2 program which was higher than anticipated by the market.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 08.11.10: Euro declines under the pressure of risk aversion by investors

The pair EUR/USD is traded downward at the Forex currency market on Monday morning amid risk aversion by investors.

By 10.50 Moscow time the Euro is at 1.3959 against closing session level on Friday of 1.4032.

News from Ireland will make market participants feel anxious: the European commissioner Mr. Rehn will arrive in Ireland today to discuss cut in budget costs and the taxes increase in the country – formerly Ireland announced these measures to reduce tension in the budget deficit.

Elections are taking place in Greece which also put pressure on the market: according to the preliminary data the ruling party is winning in the local elections.

Traders will continue to analyze events of the last week, in particular news about 2 and the rates of the ECB and the Bank of England. The day is going to be quiet in terms of macro-statistics.

Most likely the pair EUR/USD will not go beyond the range of 1.3900-1.4020 at the trading session on Monday.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 08.11.10: GBP: British Pound Sterling started new week with decline

At the Forex currency market the British Pound Sterling rate declines on Monday as players go away from risky positions today amid uncertainty with Ireland and elections in Greece. In addition after the growth last week, correction is required for the Pound.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it goes 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 1.6110 the pair will go to 1.6070 and 1.6010.
No UK news was released today and the Pound is being corrected after the upswing last week, regaining from the external background as well.
Last week the Bank of England decided to maintain the interest rate unchanged at the level of 0.50% per annum; assets purchase volume was also left unchanged. The Bank noted that pace of the UK economic recovery slows down not as rapidly as it seems and the latest positive GDP data of the country is impressive. However economists do not exclude that additional stimulation of the economy will be carried out; it is also probable that such decision will be made in February. The minutes of the Bank of England meeting will be published on 17 November.
It became known earlier that asking prices for houses reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual rate of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y). Nationwide economists point that if the trend which started in the early summer continues in November and December, the prices will have chances to drop by 1% by the end of the year.
The data released on Thursday morning showed that Halifax houses prices in Great Britain increased by 1.8% m/m in October against expected growth by 0.6% m/m. GDP intensified and started to consolidate after the release of this statistics.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 08.11.10: CHF: Swiss Franc continues to retreat at Forex

At the Forex currency market Swiss Franc rate continues to go down on Monday, following correction in the currency major pairs.
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 is giving a similar signal today, being in the neutral zone.
Forex recommendations: if the current external background is maintained and in case of breakdown at the level of 0.9670 buyers’ targets will be the levels of 0.9720 and 0.9770.
It became known today that unemployment rate in Switzerland declined to 3.6% in October against the previous level of 3.7% which generally agreed with the forecast.
Swiss National Bank representative Mr. Jordan noted a week earlier that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to monitor carefully the dynamics of the real estate sector. We would remind that interest rate in Switzerland has remained unchanged for 19 months already at the level of 0.25% per annum. According to the head of the Swiss National Bank, Mr. Hildebrand it is evident now that low levels of the interest rate can become a catalyst for the emergence of new bubbles in the real estate sector. “The longer the monetary policy remains of expansionary nature, the higher the risks of unwanted effects. Some signs of which have already been noticeable. It is especially evident in the real estate market where there is a great imbalances risk in case the rates are maintained at the current low level for a quite a long time”- he stressed last week. Hildebrand also noted that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.
Member of the board of the Swiss National Bank Mr. Dantin noted earlier that crisis in the developing countries has slowed down and almost finished and economies of Japan and the West are recovering however their recovery is very unstable. In his opinion estimation of the Swiss GDP for September is justified. Dantin noticed that strong Franc and slow pace of the recovery of the world finance system have a negative impact on Switzerland.
Franc nevertheless remains attractive currency for investments amid moderate recovery of the global economy.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 08.11.10: JPY: Japanese Yen consolidates slightly, however outlooks are ambiguous

The Japanese Yen rate is traded slightly upward at the Forex currency market on Monday, however amid investors’ uncertain sentiments at the world capital markets and ambiguous technical signals, it will make more sense to stay away of the market.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes up giving grounds for a pair buy signal. Stochastic Oscillator has not identified a 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 81.40 the pair will go to 81.60 and 81.90. If the level of 81.00 is exceeded, traders’ targets will be the levels of 80.60 and 80.20.
The following Japanese news was released today:
– Coincident indicators index in September: (preliminary) -1.3 points;
– Leading indicators index in September (preliminary) -0.6 points.
It became known that currency reserves in Japan amounted to $1.118 trillion in October which became a new record. The previous maximum was recorded at the level of $1/110 trillion. We would remind that currency reserves in the country of the rising sun are the second largest after China.
It was noted earlier the Bank of Japan expects that Japanese economy will be back on the path of the moderate growth in 2011 while basic inflation average forecast still amounts to 0.4%. Average forecast of the actual GDP level for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in July. The head of the Bank Shirakawa noted that monetary policy easing will be carried more active than before as the economy proceeds along the course of recovery.
Last Friday the Bank of Japan announced that the interest rate will be maintained in the target range of 0-0.1% per annum; the head of the Bank Shirakawa stressed that the regulator is not going to compete with the FR in the issues of the monetary policy easing. He noted that the Japan does not have any serious financial imbalances; he also noticed that the regulator will closely monitor the effects of the assets redemption program. At the meeting the Bank of Japan also considered the issue of buying mortgage investments trusts with the rating not lower than AA. In addition the Bank will purchase stock exchange funds of the Nikkei 225 Stock Average and Topix indices.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 08.11.10: AUD: Australian Dollar goes down; the pair is under correction

At the Forex currency market the Australian Dollar rate goes down on Monday after seven consecutive days of ascending trend.
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 today, being in the neutral zone.
Forex recommendations: in case of breakdown at the level of 1.0080 traders’ targets will be the levels of 1.0050 and 1.0010.
The state of things can be different: the pair continues to be above the parity level; however such movement will not be very pronounced. Australian news was not published today; external background is mixed and the pair AUD/USD looks overheated due to which corrective decline seems relevant.
A week earlier the Reserve Bank of Australia unexpectedly decided to raise the interest rate to the level of 4.75% per annum against the previous level of 4.5%, which was a surprise to the market. The regulator noted in the comments that country’s economy is vulnerable to external influence and has too little spare capacity. The risks of inflation still remain and it will make sense to proceed with policy tightening more actively.
The catalyst for such decision came from the outside: according to the International Monetary Fund, the Reserve Bank of Australian shall raise interest rates as the inflation should be chilled out and the outlook risks should be reduced. As the IMF report stated the regulator agreed that if the downside risks will be reduced, the policy of the rates will dictate their growth. IMF believes that the Australian economy looks quite strong due to the demand in iron ore from China. The IMF report also stressed that the AUD rate seems overrated by 5-15%.
On Friday AUD has again reached the 28-year high, coming up to the level of 1.0183 amid investors’ interest in risk and demand from the Middle East investors.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 09.11.10: Euro traders continue to fix profit

The pair EUR/USD is traded downward at the Forex currency market on Tuesday morning; the decline has been going on for the third consecutive session. Despite talk about investors’ concern regarding debt problems in Eurozone, the Euro decline looks like a profit fixation after the rapid growth.
By 10.45 Moscow time the Euro is at 1.3877 against closing session level of 1.3920 yesterday.
Traders go away from risky positions, fixing profit; however market participants are focused on Ireland and Portugal.
Worth noting that flurry in Ireland seems a bit farfetched; no major redemptions are scheduled for the nearest future in the country. Therefore there is no reason for concern so far. Market is just fixing profit.
The day is going to be quiet in terms of macro-statistics which means that traders will be guided by the external background.
Most likely the pair EUR/USD will be in the range of 1.3800-1.3980 on the trading session on Tuesday.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 09.11.10: GBP: British Pound continues to decline; signals are ambiguous

At the Forex currency market the British Pound Sterling rate continues to go down, following market’s general trend. The UK block of news is going to be released today and the Pound is under the pressure.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it goes down, giving grounds for a pair sell signal. Stochastic Oscillaor is giving a pair buy 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 1.6160 the pair will go to 1.6200 and 1.6250. If the level of 1.6100 is exceeded, traders’ targets will be the levels of 1.6070 and 1.6040.
The following UK news was released today:
– Comparable retails sales BRC in +0.8% y/y, total retail sales: +2.4% y/y;
– House price balance RICS in October: -49%y/y, minimum since April, 2009.
Furthermore, balance of new buyers’ requests dropped by 12% (-2% in September) and a ratio of sales to stock amounted to 22.6% (24.2% in September)
It became known earlier that asking prices for houses reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual rate of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y). Nationwide economists point that if the trend which started in the early summer continues in November and December, the prices will have chances to drop by 1% by the end of the year.
Thus, as per statistics the UK housing market continues to slacken.
Last week the Bank of England decided to maintain the interest rate unchanged at the level of 0.50% per annum; assets purchase volume was also left unchanged. The Bank noted that pace of the UK economic recovery slows down not as rapidly as it seems and the latest positive GDP data of the country is impressive. However economists do not exclude that additional stimulation of the economy will be carried out; it is also probable that such decision will be made in February. The minutes of the Bank of England meeting will be published on 17 November.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 09.11.10: CHF: Swiss Franc shifted to growth despite technical signals

Swiss Franc rate is traded upward at the Forex currency market on Tuesday despite market general trend.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it goes up, giving a pair buy signal. Stochastic Oscillator has not identified a signal today, being in the overbought zone.
Forex recommendations: if the current external background is maintained and the pair breaks down at the level of 0.9680; it will go to 0.9725 and 0.9770. Otherwise consolidation in the range will be observed.
It became known today that consumer confidence in Switzerland declined to the level of 7 points in October against the forecast of 17 points, as per SECO estimations.
Member of the board of the Swiss National Bank Mr. Dantin noted earlier that crisis in the developing countries has slowed down and almost finished and economies of Japan and the West are recovering however their recovery is very unstable. In his opinion estimation of the Swiss GDP for September is justified. Dantin noticed that strong Franc and slow pace of the recovery of the world finance system have a negative impact on Switzerland.
Franc nevertheless remains attractive currency for investments amid moderate recovery of the global economy.
Swiss National Bank representative Mr. Jordan noted a week earlier that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to monitor carefully the dynamics of the real estate sector. We would remind that interest rate in Switzerland has remained unchanged for 19 months already at the level of 0.25% per annum. According to the head of the Swiss National Bank, Mr. Hildebrand it is evident now that low levels of the interest rate can become a catalyst for the emergence of new bubbles in the real estate sector. “The longer the monetary policy remains of expansionary nature, the higher the risks of unwanted effects. Some signs of which have already been noticeable. It is especially evident in the real estate market where there is a great imbalances risk in case the rates are maintained at the current low level for a quite a long time”- he stressed last week. Hildebrand also noted that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.