LiteForex's analytics

[LF.Anastasia]

Forex Analytics from LiteForex of 15.11.10: CHF: Swiss Franc continues to grow weaker

At the Forex currency market Swiss Franc rate continues to go down; descending trend for the currency has been going on for the seventh session
in a row.


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

Forex recommendations: if the current external background is maintained, buyers' targets will be the levels 0.9880 and 0.9930.
As it became known today producers' prices for imports in Switzerland declined by 0.4% on monthly basis (+0.3% y/y) in October, while a month
earlier the index did not change on monthly basis, showing growth by 0.7% on annual basis.


Looking at the movements of pair USD/CHF on the graph, there is the impression of the Central Bank's presence at the trading session, although
there was no official statement on this matter. However, Franc continues to retreat, saving the economy of Switzerland from the excessive pressure.
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.

Thus, while Franc is far from its highs, the SNB will not need to make decisions on the rate increase.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 15.11.10: JPY: Japanese Yen goes further from the highs

The Japanese Yen continues to go down in pairing with the USD at the Forex currency market today, as investors cannot determine their attitude to
risks; so they use the USD as a safe harbor.

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

Forex recommendations: buyers' targets today will be the levels of 83.30 and 83.85.

According to the data released at the beginning of the week, industrial production in Japan reduced by 1.6% in September against the previous level
of 1.9%. However, the declining trend has been in effect for the 4th consecutive months.

Revised data for QIII showed -1.8% (preliminary index was -1.9%) against the growth by 1.5% in QII.
In addition it became known that real GDP in Japan increased by 0.9% q/q (+3.9% y/y) in QIII. However it should be understood that such fair growth
of the domestic economy took place owing only to the measures of stimulation.

Minister of Economy Mr. Qaeda noted earlier this week that Japanese economy will remain weak for some time; therefore risks should be carefully
monitored. At the same time according to the politician, GDP rise could have been more rapid in QIII if only the rate of the Yen were not so high as to
put pressure on the exports and imports levels.

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 that according to the Bank of Japan expectations, 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 15.11.10: CAD: canadian dollar tries to rebound on Monday

At the Forex currency market the Canadian Dollar rate is going up slightly at the Forex currency market at the beginning of the week after two days of
sharp fall; growing oil prices provide support to the CAD today. However external background can bring to naught all currency's attempts to grow.


Forex forecast: MACD indicator is in the positive area for the pair USD/CAD and it continues to grow, giving a pair buy signal. Stochastic Oscillator is
not giving a clear signal, being in the overbought zone.


Forex recommendations: it is possible that bulls will be back to the pair's trading amid the current external background and as a result buyers' targets
will become the levels of 1.0180 and 1.0220. It is also probable that consolidation of the pair will take place close to current levels.


Prime Minister of Canada Mr. Harper noted yesterday in a press interview that G20 summit of the "Big 20" leaders did not resolve thorny problems,
confining once again to the theoretical statements; however the politician drew attention to some progress in the discussions.
In his opinion it is not easy to resolve imbalance problems of the currency market at one go, nevertheless, as a result of G20, further trend on this
matter was determined.


The head of the Bank of Canada Mr. Carney noted earlier that economy needs regulation system reforms, as the risk of collapse of the financial
institutions "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 bears risks for Canada itself. Interest rate in Canada is at the level of 1% per annum. The last
increase took place in September this year (+25 basis points).

 

[LF.Anastasia]

EUR/USD: Euro’s attempts to restore are still too weak

The pair EUR/USD is traded with a slight increase at the Forex currency market on Tuesday amid investors' expectations that Ireland will receive financial assistance from Eurozone.

By 10.20 Moscow time the Euro is at 1.3589 against closing session level of 1.3586 yesterday.

During Asian session the Euro's restoration had been more significant, however the news about another interest rate increase to 2.5% by the Korean Central Bank in order to prevent strong inflationary pressure had a negative

impact on the Euro. In addition, the official Dublin has not appealed to the European Union for help. However, Prime-Minister of Ireland Mr. Koyen stressed earlier that the country is prepared to discuss help issue to financial system of Ireland.

A lot of statistics will be published today - in particular, consumer prices index in Eurozone for October. Most likely the pair EUR/USD will not go beyond the level of 1.3550-1.3780 on Tuesday trading session.

 

[LF.Anastasia]

CHF: Swiss franc rebounded from the lows, although signals are ambiguous

At the Forex currency market Swiss Franc rate is going up slightly on Tuesday after seven sessions of decline. However this movement should be considered as technical rebound, since the pair USD/CHF has reached overbought levels.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and it goes up, confirming a previous 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 0.9880, bullish sentiments for the pair can intensify which will lead buyers to the levels of 0.9930 and 0.9970.

In general situation in Swiss economy has not changed significantly

Important macro statistics which is scheduled to be published this week is as follows: data on the country’s trade balance and index of investors’ economic expectations ZEW will be released on Thursday. So, we can expect volatility increase for the pair on this day.

Looking at the movements of pair USD/CHF on the graph, there is impression of the Central Bank’s presence at the trading session, although there was no official statement on this matter. However, Franc continues to retreat, saving the economy of Switzerland from the excessive pressure.

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 noted that strong Franc and slow pace of the recovery in the world finance system have a negative impact on Switzerland.

Thus, while Franc is far from its highs, the SNB will not need to make decisions on the rate increase.

 

[LF.Anastasia]

JPY: Japanese yen continues to lose positions, helping out country’s economy

The Japanese Yen rate continues to retreat at the Forex currency market on Tuesday although in the morning some increase in the Yen was observed in Asia amid the pressure exerted on the USD. However as long as the JPY loses weight, Japanese economy can continue to fight off current problems, not being distracted by the verbal interventions against the currency.

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

Forex recommendations: if the current external background is maintained and in case of breakdown at the level of 83.25, the pair will go to 83.75 and 84.00.

Worth noting however that Finance Minister of Japan Mr. Noda reiterated his usual morning mantra this morning: he stressed that in case of necessity authorities will take all measures to settle domestic currency rate at the currency market, including intervention. In addition, Noda also noted that the target of the intervention in September was restrictions of currencies fluctuation only; authorities did not plan to carry out competitive devaluation.

Minister of Economy Mr. Qaeda noted earlier this week that Japanese economy will remain weak for some time; therefore risks should be carefully monitored. At the same time according to the politician, GDP rise could have been more rapid in QIII if only the rate of the Yen were not so high as to put pressure on the exports and imports levels.

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.

According to the data released at the beginning of the week, industrial production in Japan reduced by 1.6% in September against the previous level of 1.9%. However, the declining trend has been in effect for the 4th consecutive months. Revised data for QIII showed -1.8% (preliminary index was -1.9%) against the growth by 1.5% in QII.

In addition it became known that real GDP in Japan increased by 0.9% q/q (+3.9% y/y) in QIII. However it should be understood that such fair growth of the domestic economy took place owing only to the measures of stimulation.

 

[LF.Anastasia]

AUD: Australian dollar continues to decline without external support

The Australian Dollar rate continues to decline at the Forex currency market on Tuesday – commodity currency, first of all does not feel support from oil prices and secondly external factors are not in favour of the AUD at the moment.

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

Forex recommendations: if the current external background is maintained, traders’ targets will be the levels of 0.9770 and 0.9730 today.

The minutes of the RBA last meeting in November was released today. At that meeting on 2 November interest rate was unexpectedly raised. The document noted that interest rate was raised in order to facilitate the curb in the inflation rise, as mass investments in the mining sector, together with the increase in the employment sector supported the recovery of the national economy.

The minutes of meeting emphasized that the balance of risks has shifted and in the current spectrum moderate tightening of the monetary policy seems reasonable.

Market believes that the RBA is unlikely to raise interest rate before QIV of 2011.

Current level of the interest rate in Australia is at the level of 4.75% per annum.

The Australian Minister of Finance 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 employment sector: 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]

GBP: British pound sterling continues to go down


At the Forex currency market the British Pound Sterling rate continues the descending trend today, which started on Monday.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD which gives grounds for a pair sell signal. Stochastic Oscillator is not giving a clear 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
1.6125 the pair will go to 1.6160 and 1.6180. If the level of 1.6030 is
exceeded, traders' targets will be the levels of 1.5990 and 1.5960.
Players await the data on the UK consumer prices index for October, due to which the Pound is under pressure. If the released data is weak, the currency will have another reason to go down.
We would remind that yesterday morning the UK real estate data was published. According to Rightmove estimations houses prices reduced by 3.2% on monthly basis (+1.3% y/y) in November. A month earlier the index rose by 2.9%.
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 Rightmove clarified that they noticed the oddity in indicators in October; however they assumed that traders deliberately start to overprice to hold the objects until better time.
It is also worth noting 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.

 

[LF.Anastasia]

GBP: British Pound Sterling continues to go down

At the Forex currency market the British Pound Sterling rate continues to go down in the middle of the week amid the decrement of investors' interest in risk caused by the Irish problems. In addition, the UK block of news scheduled for this week also keeps investors on tenterhooks.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5900 the pair will go to 1.5950 and 1.6000. If the level of 1.5840 is exceeded, traders' targets will become the levels of 1.5810 and 1.5780.

As Mervin King, the Bank Governor stated yesterday, the regulator continues to follow target inflationary level, assigned earlier, as long term forecasts clearly demonstrate that there is no point to fear sharp rise in prices.

We would remind that the Bank of England believes that the upper limit of the inflation range should be at the level of 3%. However the data released yesterday showed CPI growth by 3.2%. The UK Inflation in September was 3.1%.

According to King:"if inflation expectations rise above the target, then important measures in the monetary policy could be taken to reduce expectations of the prices rise.

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 continues for sixth consecutive month, 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, started in the early summer, will continue in November and December, the prices will have a chance to drop by 1% by the end of the year.

Rightmove specified that they noticed the oddity in indicators in October; however they assumed that traders deliberately start to overprice to hold the objects until better time.

 

[LF.Anastasia]

CHF: Weakness of Swiss Franc is becoming more evident, however this is only temporary phenomenon

Swiss Franc rate continues to retreat at the Forex currency market on Wednesday amid lack of investors' interest to risk and uncertainty in the
peripheral countries of Eurozone, investors prefer the USD Dollar.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and it goes up, confirming a previous buy signal for the pair. Stochastic
Oscillator has not formed a clear signal today, being in the overbought zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9975, the pair will go to 1.0000 and 1.0020. If the level of 0.9945 is exceeded, traders' targets will be the levels of 0.9920 и 0.9880. Swiss data, published this week is not too positive: index of the import prices reduced by 0.9% m/m (+0.2% y/y), producer prices index dropped by 0.2% m/m (+0.4% y/y) last month. Besides, producer price index and index of import prices (total) subsided by 0.4% m/m Worth noting that data on the country's trade balance and index of investors' economic expectations ZEW will be released on Thursday. So, increase in the pair's volatility can be expected on this day.


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 noted that strong Franc and slow pace of the recovery in the world finance system have a negative impact on Switzerland.

Thus, while Franc is far from its highs, the SNB will not need to make decisions on the rate increase. However it is worth emphasizing that in the medium term the CHF will look more attractive that its European counterparts, since the state of affairs in Switzerland is much more stable.