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[LF.Anastasia]

EUR/USD: Euro began trading session on Monday with rollback

The pair EUR/USD is traded downward at the Forex currency market on Monday morning which is a part of a rollback after a rapid growth last week.
By 9.55 Moscow time the Euro is at 1.3600 against closing session level of 1.3621 on Friday.

Meanwhile, the Euro is being corrected from the eight-week highs in pairing with the USD, despite expectations of the positive statistics on Eurozone today.

However, the auction of some eurozone’s countries bonds scheduled for this week, still remains a factor of pressure for the Euro; the demand in securities and its profitability will show the changes in investors’ attitude to debt problems of the region.

In general, it is expected that some decrease in activity for the major pair will take place in the market until Wednesday night; the meeting of the U.S. Federal reserve is scheduled for 25-26 January and traders will await comments of the monetary politicians.

Most likely the pair EUR/USD will be in the range of1.3540-1.3650 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound Sterling came to a halt in the range

At the Forex currency market the british Pound Sterling is going down on Monday; however the pair GBP/USD has been in the range of 1.5836-1.6010 for the third session already.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, confirming a previous buy signal for the pair. Stochastic Oscillator started to go down on Monday, giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6000 the pair will go to1.6020 and to the local highs of 1.6050. If the level of 1.5950 is exceeded, traders’ targets will be the levels of 1.5900 and 1.5890.

Last Friday, representative of the Monetary Committee of the Bank of England Posen noted once again that the position of the regulator towards inflation has remained unchanged: The bank expects that inflationary pressure will reduce to the level of 2% soon and below, as fundamental factors, which take into account, for example, zero growth in base salary, give indications of this. We would remind that inflation in Great Britain amounted to 3.7% in December against the forecast of 3.4%. According to traders, it became evidence in favor of interest rate increase by the Bank of England. Market believes it is a settled matter because inflation has remained above target level of the regulator for 11 months.

In addition Posen stressed that market’s opinion about the rise of the interest rate does not mean the actual rise of the interest rate in the nearest future.

We would remind that market believes that the issue of raising interest rate by the bank of England is only a matter of time. Meetings of the regulator are scheduled for: 10 February, 10 March, 7 April, 5 May, 9 June, 7 July, 4 August, 8 September, 6 October, 10 November, 8 December.

Internal situation in the UK economy is still in favor of the GBP; medium term trend- is ascending for the pair GBP/USD.

 

[LF.Anastasia]

CHF: Swiss Franc gave way to Dollar

At the Forex currency market Swiss Franc rate hassubsided on Monday under the pressure from the USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is moving along the signal line, not forming a clear signal. Stochastic Oscillator is giving a pair buy signal, being in the neutral zone.

Forex recommendations: if buyers’ current sentiment will be maintained and in case of breakdown at the level of 0.9550 investors’ targets will become the levels of 0.9510 and 0.9440.

In general, the situation in Swiss economy remains almost unchanged today.

Attention to the Swiss Franc has remained steadfast from both regulator and local authorities: expensive Franc has a real detrimental effect on Swiss economy, exerting pressure on the process of its recovery. This has been confirmed by Swiss authorities who reminded that strong Franc complicates correction of the national economy.

Swiss authorities also stressed that SNB should influence on the rate of the Franc, working with it directly. This increases the possibility of the regulator’s unilateral intervention in the market, although probability of currency intervention is estimated as low so far.

The head of Swiss National Bank Mr. Hildebrand said earlier, that in his opinion, stability of Eurozone is the key factor of economic growth in Switzerland. He also expressed confidence that the region will revert to quiet times.

In addition, the regulator stressed once again that strong Franc is a hard burden for the local economy which is especially evident in some sectors. However, in general, the macro-economic background demonstrates a good atmosphere in the country.

Earlier representatives of the Swiss National Bank raised the issue of CHF. Finance Minister of the country stated that there are no signs of speculation in the market which can shift the Franc; while economy in the country grows and there are no signs of crisis. It was also stressed that an issue of expensive Franc will become a subject of discussion in the next couple of weeks.

 

[LF.Anastasia]

JPY: Japanese Yen goes down very reluctantly in pairing with USD

At the Forex currency market the Japanese Yen rate goes down on Monday, following technical correction of the whole market. Meanwhile, today, a two-day meeting of the Bank of Japan started and it will be interesting to listen to the comments of the monetary authorities of Japan on Tuesday.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, however it continues to move along the signal line, not giving a signal. Stochastic oscillator is giving a pair buy signal, being in the neutral zone.

Forex recommendations: if bullish sentiment for the pair will be maintained and in case of a breakdown at the level of 83.00 buyers’ targets today will become the levels of 83.50 and 84.00.

So, tomorrow, the bank of Japan will comment on the current state of the economy in the country, where deflation still continues and in general the situation remains quite alarming. Japanese authorities noted earlier, that Japanese economy is growing, although the pace of growth is slow. In addition, the government increased the overall assessment of the economy for the first time in the last 7 months; outlook of the levels of industrial output have also been upgraded.

It is worth waiting for the opinion of the Bank of Japan, which is usually distinguished by a sensible view on the problem.

Japanese Minister of Economy Mr. Yosano expressed hope last week that the JPY will be traded at the adequate levels. In addition, the head of the Bank of Japan Shirakawa and Prime Minister Khan exchanged views on the current situation in the Japanese economy and the world; Shirakawa drew attention again to the priorities of monetary policy in Japan.

Japanese statistics, released last week was favorable. Thus, revised volume of industrial output in Japan increased by 1% m/m in November, which became the first factor of growth over half a year; at the same time capacity utilization rose by 1.6% m/m in November against the previous fall by 2.3% and the ratio of stocks and supplies was revised to -8.3% m/m in November against the growth by 8.4% m/m in October.

In addition, tertiary index, demonstrating the state of affairs in the Japanese service sector and expenditures increased by 0.6% m/m in November, which agreed with the forecast. It has become the sixth consecutive fact of the index growth, which is a positive indicator.

 

[LF.Anastasia]

AUD: Australian Dollar does not lose hopes for upward correction

At the Forex currency market the Australian Dollar rate has been making attempts to regain from the local lows for the second consecutive session; however purchases for the pair AUD/USD are not high.

Forex forecast: MACD indicator for the pair AUD/USD crossed the signal line, therefore not giving a clear signal. Stochastic Oscillator continues to give a pair sell signal today.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9920, buyers’ targets will become the levels of 0.9960 and 1.0000. Is the upward breakdown will not take place, the pair will continue to consolidate close to the current levels.

In general, medium term trend for the pair AUD/USD will remain downward.

As it became known on Monday morning, PPI index in Australia increased by 0.1% on quarterly basis (+2.7% y/y) in QIV. Note that by the obvious reasons, level of the index will be low in QI 2011.

Australian internal statistics is multifarious as yet. Thus, import and export prices in Australia fell by 8.1% and 3.8% respectively. However, level of consumer confidence in Australia is estimated not so unequivocally; according to ANZ, consumer confidence in Australia amounted to 117 points in January against the level of 112.2 n December. It is interesting that, as per official data, index of consumer sentiment in Australia fell by 5.7% in January against the growth by 0.2% in December, mostly due to the flooding in the country.

The meeting of the Reserve Bank of Australia is scheduled for 31 January and market will carefully wait for the comments of the RBA head, as the AUD future will depend on them in the short term. Interest rate in Australia is at the level of 4.75% per annum. RBA meetings in 2011 are scheduled for: 31 January, 28 February, 4 April, 2 may, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

The major risk factor for the Australian currency still remains the assessment of the damage caused by the flooding in Queensland in January and its capital Braspene, and the reaction of the Reserve bank of Australia to the experts’ assessment.

 

[LF.Anastasia]

EUR/USD: Euro continues to tend upward

The EUR/USD is traded slightly upward at the Forex currency market on Tuesday morning in advance of the U.S. Federal Reserve meeting.
By 10.20 Moscow time the Euro is at 1.3649 against closing session level of 1.3638 yesterday.

So, a two-day meeting of the U.S. Federal Reserve will start today which will make decision on the interest rate and highlight the prospects of the American economy.

However, market believes that in the current situation it is doubtful that FR will even make hints at the future tightening of monetary policy.

In general, until the results of the meeting will become known on Wednesday night, drastic changes in the rate of EUR/USD are not expected.

Most likely the pair EUR/USD will not go beyond the range of 1.3590-1.3680 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound Sterling continues to be corrected

At the Forex currency market technical correction which started yesterday continues for the British Pound Sterling rate on Tuesday.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, confirming a previous buy signal for the pair. 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 1.6060 the pair will go to 1.6100 and 1.6150. If the level of 1.5950 is broken down, traders’ targets will be the levels of 1.5890 and 1.5850/40.

The day is going to be eventful in regard to the UK economic information: in the afternoon (12.30 Moscow time statistics on GDP in QIV, preliminary data, is expected to be released, as well as data on the volume of net public sector borrowings in December). In addition, the head of the bank of England Mervyn King will deliver a speech tonight.

It is interesting that according to Begbies Traynor, British companies again experience complications in doing business due to the reduction of government spending in the country. Thus, about 140 thousand companies in the UK are now in difficulties, and crisis in the companies started long before active phase of reduction of government spending.

According to Begbies Traynor studies, this fact increases fears of the second wave of recession in the country. In addition, experts see signs of stagnation in British economy which is yet another alarm bell.

Last Friday, representative of the Monetary Committee of the Bank of England Posen noted once again that the position of the regulator towards inflation has remained unchanged: The bank expects that inflationary pressure will reduce to the level of 2% soon and below, as fundamental factors, which take into account, for example, zero growth in base salary, give indications of this. We would remind that inflation in Great Britain amounted to 3.7% in December against the forecast of 3.4%. According to traders, it became evidence in favor of interest rate increase by the Bank of England. Market believes it is a settled matter because inflation has remained above target level of the regulator for 11 months.

 

[LF.Anastasia]

CHF: Swiss Franc gives way to USD again

Swiss Franc rate is being corrected at the Forex currency market on Tuesday after two days of steady growth.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it is still moving along the signal line, not giving a clear signal. Stochastic oscillator is not giving a signal either today, being in the neutral zone.


Forex recommendations: off the market.


Feasibel event scenario at Forex: in case of breakdown at the level of 0.9470 the pair will go to 0.9430 and 0.9380. Otherwise, the pair will continue to consolidate close to the current levels.


It became known today that according to UBS estimates, indicator of consumer confidence in Switzerland increased to the level of 1.842 in December against 1.624 in November. This is a positive indicator for the local economy.

Swiss authorities stated yesterday that country’s economy has faced a complicated situation; however it is not a crisis. Expensive Franc became a catalyst for the complications in the economic conditions. At the same time authorities declared that SNB does not influence in any way on the CHF rate, although it bear full responsibility for the monetary policy and its contents.

Attention to the Swiss Franc has remained steadfast from both regulator and local authorities: expensive Franc has a real detrimental effect on Swiss economy, exerting pressure on the process of its recovery. This has been confirmed by Swiss authorities who reminded that strong Franc complicates correction of the national economy.

Swiss authorities also stressed that SNB should influence on the rate of the Franc, working with it directly. This increases the possibility of the regulator’s unilateral intervention in the market, although probability of currency intervention is estimated as low so far.

The head of Swiss National Bank Mr. Hildebrand said earlier, that in his opinion, stability of Eurozone is the key factor of economic growth in Switzerland. He also expressed confidence that the region will revert to quiet times.

 

[LF.Anastasia]

JPY: Japanese Yen does not pay attention to the Bank of Japan

The Japanese Yen rate is traded upward at the Forex currency market on Tuesday. The Yen has hardly responded to the meeting of the Bank of Japan.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to move along the signal line, not giving a clear signal. Stochastic oscillator is giving a pair sell signal, being in the neutral zone.

Forex recommendations: if bearish sentiment for the pair intensifies and in case of breakdown at the level of 82.10 traders’ targets will become the levels of 81.75 and 81.30.

A two-day meeting of the Bank of Japan finished this morning; at the meeting it was decided to keep interest rate in the previous target range of 0-0.1% per annum. The head of the Bank of Japan Mr. Shirakawa noted in the follow- up comments that the country continues to move towards achieving price stability and at the moment both upside and downside risks to the economy are stabilized.

Monetary politician also stressed that Japan will resume recovery sooner or later; while the growth in QI 2011 still remains disputable.
Shirakawa expressed confidence that export levels will also begin to increase.

We would remind that there are still deflation problems in the Country of the Rising Sun and the longer they last the harder will be the rehabilitation. The Yen, meanwhile, is traded in its own way, not paying much attention to the reaction of the Bank of Japan.

Japanese Minister of Economy Mr. Yosano expressed hope last week that the JPY will be traded at the adequate levels. In addition, the head of the Bank of Japan Shirakawa and Prime Minister Khan exchanged views on the current situation in the Japanese economy and the world; Shirakawa drew attention again to the priorities of monetary policy in Japan.

Japanese statistics, released last week was favorable. Thus, revised volume of industrial output in Japan increased by 1% m/m in November, which became the first factor of growth over half a year; at the same time capacity utilization rose by 1.6% m/m in November against the previous fall by 2.3% and the ratio of stocks and supplies was revised to -8.3% m/m in November against the growth by 8.4% m/m in October.

 

[LF.Anastasia]

AUD: After the ascend Australian Dollar has shifted to decline

At the Forex currency market the Australian Dollar rate has turned back to decline.

Forex forecast: MACD indicator for the pair AUD/USD has merged with the signal line and is not giving a clear signal today. Stochastic oscillator is giving a pair sell signal.

Forex recommendation: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0000 the pair will go to 1.0050 and 1.0125. if the level of 0.9910 is exceeded, traders’ targets will become the levels of 0.9850 and 0.9810.

The following Australian news was released today:
– CPI in QIV:+0.4% q/q (+2.7% y/y) against the forecast of +0.7% q/q;
– Leading indicators index Conference Board in November: +0.3% against the forecast of +0.6%.

Weak data on the consumer prices level in Australia caused sales of the AUD, which once again confirms our opinion about weakness of the currency in the medium term.

However, according to Minister of Finance of the country Mr. Swan, CPI will show increase in QI of this year due to the growing dynamics of prices for food. Observers believe that economic consequences of the flooding in the Green Continent have already been noticeable in the results of the current quarter.

As it became known on Monday morning, PPI index in Australia increased by 0.1% on quarterly basis (+2.7% y/y) in QIV. Earlier statistics was multifarious. Thus, import and export prices in Australia fell by 8.1% and 3.8% respectively. However, level of consumer confidence in Australia is estimated not so unequivocally; according to ANZ, consumer confidence in Australia amounted to 117 points in January against the level of 112.2 n December. It is interesting that, as per official data, index of consumer sentiment in Australia fell by 5.7% in January against the growth by 0.2% in December, mostly due to the flooding in the country.

The meeting of the Reserve Bank of Australia is scheduled for 31 January and market will carefully wait for the comments of the RBA head, as the AUD future will depend on them in the short term. Interest rate in Australia is at the level of 4.75% per annum. RBA meetings in 2011 are scheduled for: 31 January, 28 February, 4 April, 2 may, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.