LiteForex's analytics

[LF.Anastasia]

Forex Analytics from LiteForex of 11.11.10: JPY: Japanese Yen has not determined movement direction

At the Forex currency market the Japanese Yen rate is traded close to the opening level on Thursday amid instability of the external background.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes up, confirming a pair previous buy signal. Stochastic Oscillator is giving an antipodal 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 82.40 the pair will go to 82.60 and further to 82.80. If there is a breakdown at the level of 82.10, traders' targets will be the levels of 81.60 and 81.40.
The following Japanese data was released today:
- Prices index for the industrial goods in October: +0.9% y/y against -0.1% in ASeptember;
- Volume of orders in the machine-building sector in September: -10% against
+101% in August.
The Bank of Japan maintained interest rate in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan announced the purchase of the mortgage investment trusts with the rating not lower than AA.
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.
Such prospect seems questionable at the moment, considering the latest statistics and taking into account that deflation continues to progress.

Tuesday's data multidirectional; however negative data prevailed (index of economic observers in October is 40.2 against 41.2 in September, decline continues for the third consecutive month, bank lending is -2.0 y/y in October, the decrease continues for the eleventh consecutive month.
Domestic background has not provided support to the Yen; external background is not in favour of the JPY's recovery either. In principle it is more reasonable to stay away of the market until the end of the week for the pair.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 11.11.10: AUD: Australian Dollar continues to stay in the range

The Australian Dollar is traded downward at the Forex currency market today, although it has been in the range of 1.0133-0.9988 for the third day already.
Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and it moves along the signal line, not forming a clear signal. Stochastic Oscillator is giving a pair sell 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 1.0000 is exceeded traders' targets will be the levels of 0.9990 and 0.9975.
Such long-awaited Australian unemployment statistics for October became a disappointment due to its weakness; players had not expected too high indicators, however the indices looked very pessimistic.
Unemployment rate in Australia increased to 5.4% which became half a year high. Previous level of the rate amounted to 5.1%; market participants expected to see reduction to 5.0%.
In addition, 29.7 thousand jobs were created in October (forecast +20
thousand)
Thus, the increase in the labour share in the country has changed in favour of labour. We shall wait for the authorities' comments in this regard; however it is already clear that chances for the rate increase in the nearest future are diminishing.
A week earlier the Reserve Bank of Australia decided to raise 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 Australian Ministry of Finance has updated budget forecast this week.
Thus, GDP in 2011 is expected to be at the level of 3.5% (growth), in 2012 - 3.75% (unchanged). Net debt will amount to 6.4% by 2012.
At that, new budget deficit will be higher by 41.5 billion AUD in 2010-2011.
As for the unemployment rate - it is expected to be at the level of 4.75% in
2011 and at the level of 4.5% in 2012.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 12.11.10: Euro intends to crash down

he pair EUR/USD declines at the Forex currency market on Friday, going beyond 1,36 under the pressure of a new surge of investors’ concern regarding debt problems in the Eurozone countries, in particular in Spain.
By 10.50 Moscow time the Euro is at 1.3600 against closing session level of
1.3667 yesterday.
Apart from the indicated below problem, pressure on the buyers’ sentiments are also exerted by the news about inflation in China due to which monetary authorities of the country can increase interest rate.
Summit G20 ended in Seoul; however final communiqué did not say anything
new: the participating countries will pass over to the currencies rates, established by the markets and they will refrain from devaluation, thus, excluding mechanics of competitive advantage.
The statistical calendar today is eventful; GDP data for QIII will also be published. France and Germany already gave their reports, which demonstrated slight lag from projections Presumably the pair EUR/USD will not go beyond the range of 1.3520-1.3800 at the last trading session of this week.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 12.11.10: GBP: British Pound Sterling continues to fall

At the Forex currency market the British Pound Sterling rate continues to decline, following market general trend.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it goes down, confirming previous buy signal for the pair. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.
Forex recommendations: in case of breakdown at the level of 1.60, the pair will go to 1.5960 and 1.5910.
The UK data released today was ambiguous.
Thus, LSL/Acadametrics estimation showed that houses prices in England and Wales went up by 0.3% in October, which is the sixth consecutive month rise; increasing by 6.1% on annual basis; analytics in the real estate sector contradict one another: Halifax stated that houses prices in October increased by 1.8%, Nationwide insisted that the indicator fell by 0.7%. It is a paradox, but a fact why would houses prices grow rapidly in the country with low level of consumer spending and high unemployment rate Nationwide economists stressed that if the trend which had started in the early summer would continue in November and December, the prices would have a chance to drop by 1% by the end of the year.
In addition level of consumer confidence in Great Britain as per Nationwide, reduced to 52 last month against the level of 53. Thus, the indicator fell to the low of 19 months, which indicates negative outlooks for the British economy.
The International Currency Fund believes that the Bank of England should continue to stimulate economy as it seems at the moment that it is necessary to compensate the reduction of the budget expenses. Slow recovery of the banking system in the country is another factor which speaks in benefit of such measure.
This week statistics was positive for Great Britain as a whole - the UK industrial production increased by 0.4% in September, which agreed with the forecasts and which was able to support the Pound for a while, however pressure exerted by the external background was higher.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 12.11.10: CHF: Swiss Franc grows, despite signals

At the Forex currency market Swiss Franc rate consolidates in pairing with the USD, demonstrating its qualities of the protective asset. At the same
time, technical indicators give a currency sell signal, which indicates the necessity to stay off the market.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and it goes up, giving a pair buy signal. Stochastic Oscillator is giving a
similar signal, being in the overbought zone.

Forex recommendations: off the market, considering external background. Feasible event scenario at Forex: in case of breakdown at the level of
0.9780 the pair will go to 0.9820 and 0.9880. Otherwise we will observe consolidation close to the current levels.
The state of economy in Switzerland has not changed significantly over 24 hours.

Note, that interest rate in Switzerland has remained unchanged for 19 months at the level of 0.25% per annum. The head of the Swiss National Bank
Hildebrand is confident 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.

Representative of Swiss National Bank Mr. Jordan noted not once that prolonged retention of the interest rates at the low level can cause
additional risks for the economy. SNB intends to closely monitor the dynamics of the real estate sector.
We would remind that 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 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.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 12.11.10: JPY: Japanese Yen confidently recovers losses

The Japanese Yen rate goes up steadily at the Forex currency market on Friday, recovering losses of the last three days, when the Dollar was
supported by the external background.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, 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: in case of breakdown at the level of 81.90, traders'targets will become the levels of 81.60 and 81.20.

The Japanese GDP growth amounted to 2.5% y/y in QIII (the indicator increased by 1.5% in QII) - this is the economists' average forecast. The
data will be published on 15 November, on Monday. However market believes that after some acceleration in QIII, Japanese economy may slow down by the end of the year, as high rate of the JPY affects exports' levels.If this forecast proves to be correct, the Bank of Japan will have to take
additional measures to support economy.

The Bank of Japan maintained interest rate in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan announced the purchase of the mortgage investment trusts with the rating not lower than AA.

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.

Such prospect seems questionable at the moment, considering the latest statistics and taking into account that deflation continues to progress. The
data released on Thursday is ambiguous: number of orders in the machine-building sector in September is -10% against +10.1% in August; while
prices index for the industrial goods in October: +0.9% y/y against -0.1% in September;

 

[LF.Anastasia]

Forex Analytics from LiteForex of 12.11.10: AUD: Australian Dollar rate continues to decline

At the Forex currency market the Australian Dollar rate is going down on Friday, keeping up the developing descending trend.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and it goes down, confirming a previous sell signal for the pair. Stochastic
Oscillator is giving a similar signal today, being in the oversold zone.

Forex recommendations: in case of breakdown at the level of 0.9830, the pair will go to 0.9770 and 0.9730.


There was no Australian news published today and the currency continues to face pressure from the external background, it was also deprived of the oil prices support. A week earlier the Reserve Bank of Australia decided to raise 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 Australian Ministry of Finance has updated budget forecast this week. Thus, GDP in 2011 is expected to be at the level of 3.5% (growth), in 2012 -
3.75% (unchanged). Net debt will amount to 6.4% by 2012. At that, new budget deficit will be higher by 41.5 billion AUD in 2010-2011.

The situation in the country's labor market is complicated. Unemployment rate in Australia increased to 5.4% which became half a year high. Previous
level of the rate amounted to 5.1% and market participants expected to see reduction to 5.0%. In addition, 29.7 thousand jobs were created in October
(forecast +20 thousand). Thus, the increase in the labour share in the country has changed in favour of labour. We shall wait for the authorities'
comments in this regard; however it is already clear that chances for the rate increase in the nearest future are diminishing.

Unemployment rate is expected to be at the level of 4.75% in 2011 and at the level of 4.5% in 2012.

 

[LF.Anastasia]

Forex Analytics of LiteForex 12.11.10: CAD: canadian dollar continues to grow weak

The Canadian Dollar rate decreases at the Forex Currency market today without oil prices support.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD

and it goes up, confirming yesterday's buy signal for the pair. Stochastic Oscillator is giving a similar signal today, being in the overbought zone.
Forex recommendations: in case of breakdown at the level of 1.0135 and if the current market trend is maintained, buyers of the pair will have targets
of 0160 and 1.0190.

The pair, after being in the narrow range of 0.9980-1.0080 for over a week, has made a breakdown up at last and this prospect will be maintained in a
short run. In addition investors' anxiety is explained by the new surge of talk about debt problems in the peripheral countries of the Eurozone -
yesterday Spain gave a handle to this and later- Ireland. The head of the Bank of Canada Mr. Carney noted earlier that economy needs regulation system reforms as the risk of the financial institutions collapse "which are too large to become bankrupt" is still too high at the moment.

He also stressed that the banks themselves should comply with market discipline and currencies' rates should reflect the fundamentals. According
to Carney increasing tension at the currency market bear risks for Canada itself.

The politician emphasized that the CB of Canada will continue to implement the existing monetary policy.
We would remind that at the last meeting the Bank of Canada decided 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's 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.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 15.11.10: Euro goes down under the pressure from Ireland

Forex Analytics from LiteForex of 15.11.10: Euro goes down under the pressure from Ireland

The pair EUR/USD is traded downward at the Forex currency market on Monday because investors continue to be concerned regarding the economic state of Ireland.

By 10.30 Moscow time the Euro is at 1.3667 against closing session level of 1.3691 on Friday.
At the end of last week market actively discussed issues concerning Ireland: when will it ask for help from the European Union, how deep-rooted are the problems in the country's economy and in which way all these together will impact on the rate of the European currency.

The day is going to be significant in this respect - the spread of the Ireland's bonds in pairing with the German standard is worth watching in order to determine the level of players' prejudicial view. The indicator growth will mean that the rate of the Euro will be in the descending trend.

The data on Eurozone and the USA will be released today which will affect the volatility of the trading session. Most likely the pair EUR/USD will not go beyond the range of 1.3600-1.3800 on Monday trading session.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 15.11.10: GBP: British Pound Sterling goes down at the beginning of the week

Forex Analytics from LiteForex of 15.11.10: GBP: British Pound Sterling goes down at the beginning of the week amid ambiguous external background and mixed signals

At the Forex currency market the British Pound Sterling rate goes down on Monday, while external background at the market continues to be ambiguous.

Technical signals for the currency are mixed and in addition the Pound is under pressure caused by the expectation of the UK data publication this
week.

Forex forecast: MACD indicator for the pair GBP/USD is in the positive area and it goes up, confirming a previous buy signal for the pair. Stochastic
Oscillator is not giving a clear signal, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6175 the pair will go to 1.6240 and 1.6300. If the level of 1.6030 is
exceeded, traders' targets will be the levels of 1.5990 and 1.5960. Data on the UK real estate market was released today. According to Rightmove
estimations houses prices declined by 3.2% on monthly basis (+1.3% y/y) in November. The index grew by 2.9% a month earlier.


The situation in the sector continues to be ambiguous. Earlier the LSL/Acadametrics estimations showed that houses prices in England and Wales
went up by 0.3% in October, the rise is going on for six consecutive months, increasing by 6.1% on annual basis; analytics in the real estate sector
contradict one another: Halifax stated that houses prices in October increased by 1.8%, Nationwide insisted that the indicator fell by 0.7%. It is a paradox, but a fact why would houses prices grow rapidly in the country with low level of consumer spending and high unemployment rate. Nationwide economists stressed earlier that if the trend which had started in the early summer would continue in November and December, the prices would have a chance to drop by 1% by the end of the year.

Rightmove clarified that they noticed the oddity in indicators in October; however they assumed that traders deliberately start the overprice to hold
the objects until better time. We would remind that the level of consumer confidence in Great Britain reduced to 52 last month, as per Nationwide against the level of 53. Thus, the indicator fell to the low of 19 months, which indicates negative outlooks for the British economy.