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AUD: Australian Dollar and a surge of correction from 1.0200

At the Forex currency market the Australian Dollar rate has failed to reach the previous highs at 1.0225 at the first attempt. Purchases ceased at the level of 1.0200.

Forex forecast: FORCE indicator is in the positive area for the pair AUD/USD; while a downward trend is being observed, as well as reduction of the spread with the key level of 0 points, forming convergence on sale. Stochastic Oscillator is traded in the overbought zone and indicates about a new downward momentum in a bearish intersection of the moving average indicator. Later, on Friday, there was a wave of profit taking in the Longham at the level of 1.0200.

Ichimoku indicator shows the formation of an upward trend on the daily chart; the key moving averages are in the bullish intersection, being traded upward. Have losses level of support for the key slow indicator is at 1.0000.

Forex recommendations: after the reverse from the level of 1.0200 we expect the fall of the pair to the core level at 1.0000.

Feasible event scenario at Forex: if a trading day will be closed below the level 1.0100, we expect that sales will be increased to the level of 1.0000.

Statistics was also against the Australian Dollar, showing that the index of business activity in the construction sector of Australia fell to 40.2 in January against preliminary level of 43.8. Weak data on the sector has caused some disturbances among investors, who predicted economic recovery after the natural disaster and the impending inflation thereafter.

 

[LF.Anastasia]

NZD: Decline of New Zealand Dollar has been continued

At the Forex currency market the New Zealand Dollar rate continues to decline on Monday under the pressure of the tropical hurricane “Yassi”” and due to the overall reduction of the oil global prices.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is moving along the signal line, preventing from forming a clear signal. Stochastic oscillator has reached oversold zone today, also giving a pair sell signal.

Forex recommendations: if current sentiment will be maintained at the market; traders of the pair will have levels 0.7650 and 0.7610 as targets. If downward breakdown will not take place, the pair will consolidate close to the current levels.

As it became known last week that unemployment rate in New Zealand rose to 6.8% in QIV, 2010 against the previous level of 6.4% in QIII while economists expected the growth of 6.5%. At the same time employment rate of the population in New Zealand fell by 0.5% in QIV (-11 thousand jobs) against the forecast of growth by 0.2%.

That was the major catalyst for the NZD sales, which has been intensified by the weather factor later.

We would remind that at the meeting which was held at the end of January, the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased over the next two years.

However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

 

[LF.Anastasia]

EUR/USD: Euro continues to regain steadily

The pair EUR/USD is traded upward at the Forex currency market on Tuesday, continuing to regain from yesterday’s fall.

By 10.22 Moscow time the Euro is at 1.3638 against closing session level of 1.3582 yesterday.

The main positive factor comes from the Asian market where trading took place in the major area; and also in advance of the publication of the data on Germany, which are expected to be positive.

Thus at 14.00 Moscow time the index of German industrial output in December will be made public – according to the market average forecast, the indicator increased by 0.2% on monthly basis against the decline by o.7% in November.

Note that investors’ general optimism is based on the theory of stable recovery of the global economic system which, so far, has been confirmed by macro-statistics.

Most likely the pair EUR/USD will not go beyond the range of 1.3550-1.3700 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound is growing slowly

At the Forex currency market the British Pound Sterling rate continues to grow unsteadily on Tuesday, keeping up with the tendency which has started earlier this week.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, giving a pair buy signal. Stochastic oscillator continues to go down today, being in the neutral zone.

Forex recommendations: taking into account external background we can expect that purchase will increase but only in case of breakdown at the level of 1.6170, after that buyers’ targets will be the levels of 1.6240 and 1.6275.

The following UK data was released today:

– Retail sales BRC in January: +2.3% y/y, total sales +4.2% y/y;

– Index of houses prices RICS in January: -31% against the forecast of -38% and -39% in December.

In general statistics turned out to be positive; however different companies appear to have different points of views, while assessing the growth of prices.

The UK houses prices reduced by 0.7% in November-December against the previous growth by 0.8% therefore, real estate prices continue to drop consistently, in spite of attenuation of the sales pace. According to the study of RICS, a number of new proposals have also reduced. Thus, there are all grounds for the maintenance of the precarious position in the real estate sector. It is interesting that earlier Halifax released information according to which houses prices in January increased by 0.8% m/m (-2.4% y/y). It is still unclear what criterions different companies apply for their evaluations of the same sector.

Note that study of the National Institute of Economic and Social Researches “NIESR” agrees with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, with the main target to control the growth of consumer prices.

NIESR expects that the rate will increase to the level of 1.75% against the current values by the end of 2011. At the same time it has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

Earlier NIESR has already made not too rosy forecasts. Thus, the Institute recommended the UK government to postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.

 

[LF.Anastasia]

Japanese Yen caught in the “Triangle”

The Japanese Yen rate continues to be traded inside the pattern of “Triangle” at the Forex currency market on Wednesday. Upper boundary of the figure passes through the level of 82.50; while bottom boundary has reached the level of 81.30.

Forex forecast: it is expected that the currency pair will reach new levels; however the side of a breakdown has not been determined yet. The levels of 82.50 on the top and 81.30 on the bottom are of importance.

Forex analysis: Ichimoku indicator is giving a signal of the long term downward trend, quotes for the pair are below “Ichimiku clouds”, which indicates the dominance of sales in the pair, which has been observed since QIII last year.

Forex recommendations: a priority- is the reduction of quotes to the level of 82.00, and further to 81.50. Currency pair will try to reach the bottom area of the pattern “Triangle”. If you keep a Long, it is recommended to set a Stop at the level of 81.20, (below the key support level at 81.30). The target of growth is at 83.00. If it is a deal aimed at reduction, the target is 80.25, and we recommend to set a Stop at 82.70.

The Japanese Yen received fundamental support from the macro economic statistics. According to the data released today, current account balance in Japan increased by 30.5% y/y in December, to the level of +Y1.195 trillion. Maintenance of stability in economy is the most important magnet for investors, who transfer their assets into Japanese currency. As it became known this morning, level of corporate bankruptcies in Japan reduced by 5.52% m/m in January, to the level of 1041. Reduction of bankruptcies and growth of the balance of payment surplus of the country are the indications of the national currency consolidation.

 

[LF.Anastasia]

AUD: Australian Dollar tends to retest the level of 1.0200

At the Forex currency market the Australian Dollar rate does not abandon the attempts to reach the highs at 1.0225. Purchases are restrained below the level of 1.0200.

Forex forecast: the combination of Japanese candlesticks Morning Star gives additional impetus to the growing quotes, the first target of the growth is the level of1.0200, after that the reversal to have losses up to the support level of 1.0000 is possible or further up to the level of 1.0225.

Forex analysis: FORCE indicator is in the positive area for the pair AUD/USD and downward trend is being observed; spread is at the key level of 0 points; divergence of the purchases is being formed. Stochastic Oscillator is at the threshold of 80 points-overbought zone. If this level is exceeded, there will be a sell signal; moving averages of the indicator are already in the bearish cross. We expect a new wave of profit taking for Longs at the level of 1.0200.

Ichimoku indicator shows the formation of the upward trend on the daily chart and at the same time stage of correction is being observed. Key moving averages are in the bullish cross, trading flat. Have losses level of support for the key slow indicator is at 1.0000.

Forex recommendations: speculate, having a target of growth to the level of 1.0200, after that consider the possibility to turn a position to reduce to the base level of 1.0000.

Feasible event scenario at Forex: if trading of the day will be closed below 1.0200 we forecast the increase in sales to the level of 1.0000.

There was no negative statistics on the economic state in the country. Traders’ attention is focused to the dynamics of the prices for the raw materials and on the possible weakening of the USD due to the rally on the raw materials assets.

 

[LF.Anastasia]

CHF: Swiss Franc changed its mind about the decline

At the Forex currency market Swiss Franc rate continues to grow on Tuesday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is moving along the signal line, preventing from formation of a clear signal. Stochastic oscillator remains in the overbought zone, which gives grounds for the trend reversal.

Forex recommendations: considering current sentiment in the market we can expect the rise in bearish sentiments for the pair in case of breakdown at the level of 0.9525, after that, traders’ targets will be the levels of 0.9500 и 0.9460.

Statistics on Swiss unemployment rate released today showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand)

According to the study of UBS, level of private consumption increased to the level of 1.7% in January, which above the average annual level.

Statistics of last week looked optimistic: levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).

However the data released before that shows that not everything is that good in the economy: leading indicator according to the Research Institute KOF fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

The data on the inflation levels in January will be released this Thursday (forecast:-0.1% m/m).

 

[LF.Anastasia]

NZD: New Zealand Dollar continues to grow steadily

The New Zealand Dollar rate is traded upward at the Forex currency market on Tuesday, keeping up the growing trend of the week.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and continues to go up, giving a pair buy signal. Stochastic oscillator reversed from the overbought zone and tries to go upward, giving a pair buy signal.

Forex recommendations: if current sentiment will be maintained in the market, buyers’ targets will be the level of 0.7750 and 0.7810

The following New Zealand data was released today:

– Houses prices in January: -1.5% y/y against -0.9% y/y in December.

In addition, the data on the business confidence NAB for January was also released: the index demonstrated growth rate to 4 points against the decline by 3 points in December. Index of business conditions reduced to 6 points in the first month of the year against the previous value of 6.

Statistics published before that had been pessimistic: it became known last week that unemployment rate in New Zealand rose to 6.8% in QIV, 2010 against the previous level of 6.4% in QIII while economists expected the growth of 6.5%. At the same time employment rate of the population in New Zealand fell by 0.5% in QIV (-11 thousand jobs) against the forecast of growth by 0.2%.

The meeting of the Reserve Bank of New Zealand which was held at the end of January, made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased over the next two years. However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

 

[LF.Anastasia]

EUR/USD: Euro is growing for the third consecutive day

The pair EUR/USD is traded upward at the Forex currency market on Wednesday morning, continuing the trend of the last two days.

By 10.25 Moscow time the Euro is at 1.3655 against closing session level of 1.3625 yesterday.

In the mid-week investors await statistics on Germany, which is expected to be favourable; and also the data on the number of claims for unemployment benefits in the USA which will be released tomorrow.

The main news of Tuesday – is the rise of the interest rate in China; market has already regained from it; and investors believe that global recovery will not slow down, due to the measures adopted by Celestial Empire, and will remain stable.

Meanwhile the speech of the U.S. Federal Reserve chairman, Ben Bernanke before the budget committee of the House of Representatives will be of interest. It is possible that monetary politician will touch upon a subject of the national debts.

Most likely the pair EUR/USD will not go beyond the range of 1.3600-1.3720 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound Sterling consolidates amid quiet external background

At the Forex currency market the British Pound Sterling rate is traded with no clearly determined direction on Wednesday.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, confirming a pair buy signal. Stochastic Oscillator is approaching oversold zone today, creating prerequisites for a trend reversal.

Forex recommendations: considering sentiment in the market, it seems possible that the pair will go down slightly or will consolidate close to the current levels. However, if bearish sentiment intensifies, and there is a breakdown at the level of 1.6050, the pair will go to 1.6010 and 1.5950.

The following UK data was released today:

– Index of retail prices BRC in January: +2.5% y/y against +2.1% y/y in December;

– GDP forecast for 2011: CBI: +1.8% against +2.0% for the previous period.

In general, the main catalyst of the formation of movement direction today - is the external background, which currently seems quiet.

Yesterday BRC released index of retail sales in January (+2.3% y/y, total sales +4.2% y/y).

The situation in the UK economy has not changed significantly yet. We will remind that earlier the study of the National Institute of Economic and Social Researches “NIESR” was made public, which tonality agreed with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, while the main target will still remain the control of consumer prices growth.

NIESR expects that the rate will increase to the level of 1.75% against the current values by the end of 2011. At the same time it has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

Earlier NIESR has already made forecasts, which were not too rosy. Thus, the Institute recommended the UK government to postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.