LiteForex's analytics

[LF.Anastasia]

Forex Analytics of LiteForex of 06.09.10: AUD: Australian Dollar’s growth is slowing down in advance of the RBA meeting

The Australian Dollar rate in going up at the Forex currency market on Monday however the volume is reducing: the Reserve Bank of Australia meeting is scheduled for Tuesday and Forex market traders are waiting for the monetary politicians’ statements.
Forex forecast: MACD indicator is in the positive area for the AUD/USD however it is moving in parallel to the signal line and is not giving a clear signal. Stochastic Oscillator is not giving a clear signal either today.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9175 the pair will go to 0.9200 and 0.9250. If the pair exceeds the level of 09140, sellers’ targets will be the levels of 0.9100 and 0.9070.
Market believes that at tomorrow’s meeting the Reserve bank of Australia will keep the interest rate at the current level of 4.50 % per annum – RBA will follow this policy for the entire QIV. Worth noting that current inflation level around 3% corresponds with the average expectations of the regulator, so there is no need in the monetary tightening in the country at the moment.
Last week statistics frustrated Forex traders – according to the data trade balance in Australia reduced to +A$1.89 billion in July against the previous value of +A$3.44 billion. The narrowing of the Australian’s trade balance puzzled experts, although the decline in the iron ore and coal exports has been already observed earlier.
It is interesting that according to the data released yesterday GDP level in Australia rose to the maximum of the last three years in QII demonstrating consolidation by 1.2% against the forecast of 0.9%. Previous index value was at the level of 0.7%. %. Economists believe that Chinese demand for iron ore is an activator of the Australian economic growth. New interest rate increase hardly threatens Australia. Interest rate in Australia is at the level of 4.50%per annum now. The main and official version of the last RBA meeting is as follows –current level of the inflation decline cannot prevent from undertaking drastic measures to tighten monetary policy.
It became known earlier that private construction spending in Australia reduced by 0.4% (-4.8% y/y) in QII. For economists statistics became another stroke to portray a cheerless picture in the construction sector of the country. Thus, the decline in the sector is the highest since the beginning of the 2000’s; nevertheless sluggish growth still continues.
It should be noted that the retail sales data released yesterday appeared to be better than forecasts which along with the housing market data would give the AUD the medium term support. It seems that the demand’s response to the statistics and current situation is becoming more realistic at the market and as a result the Australian Dollar looks more attractive at Forex than its colleagues from the raw material producing countries.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 07.09.10: Motive to sell out Euro was found again

The pair EUR/USD is losing ground at the Forex currency market again on Tuesday morning- investors were reminded once more about Eurozone countries’ debt problems and they are now concerned that state bonds risks would not be able to ensure banks’ stability.
By 9:40 Moscow time the Euro is at 1.2797 against closing session level of 1.2875 yesterday.
Market traders were alerted by an article in the Wall Street Journal, which stressed that investors underestimate risks of the Eurozone countries’ sovereign debts; the results of the stress-tests carried out recently are not an absolutely true measure of stability. Keeping in mind that traders are more afraid of shadows than real facts, today’s sale of the Euro does not seem too weird.
Surely the Eurozone has debt problems and it would be frivolous to disregard them, however the overall situation in the Eurozone is not worse than a couple of days ago when the pair EUR/USD has grown steadily.
Today is going to be the second uneventful day in terms of macro-economic statistics.
Most likely the pair EUR/USD will be in the range of 1.2700-1.2900 on Tuesday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 07.09.10: GBP: British Pound Sterling continues to subside

At the Forex currency market on Tuesday the British Pound rate is going down for the second consecutive day – investors are waiting for the news on Thursday; they are risk averse, keeping in mind bad state of the UK real estate market.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it continues to go down, confirming a pair previous sell signal. Stochastic Oscillator is giving a similar signal being in the neutral zone.
Forex recommendations: in case of breakdown at the level of 1.5320 sellers’ targets today will be the level of 1.5270 and 1.5200.
As became known on Tuesday the UK retail sales monitor BRC increased to 1% on annual basis in August against the level of 0.5% y/y earlier.
According to the data released earlier UK houses prices declined by 0.3% m/m (+1.5% y/y) against the previous fall by 0.1% m/m as per Hometrack. Thus the situation in the housing sector is getting worse. As per the Rightmove report, number of people who buy a house for the first time can decline to the new low even before the end of this year – according to the survey the number of those who planned and bought a house in QIII 2010 amounted to 22.2% against 30.8% a quarter earlier. If experts’ forecast justifies, the situation in the UK housing market will become more complicated; analytics note that there is ground for concern even now.
Economists believe that consumer finance index in the UK is at the low of the year in August – 37.9 points against the previous level of 37.2 points. At the same time the UK quarterly business confidence index has also reduced. All these put together suggest that the spread of pessimism to the households intensifies.
According to media reports British companies owe pension funds huge amount of money – Aon publication shows that a total amount of debt increased by 20% within a year and amounted to about 1.2 trillion pounds which in its turn poses significant financial risks.
The Gilt profitability estimated for 20 years reduced to 3.76% which is a ten-year minimum.
The GDP rate is profoundly affected by the investors’ concern regarding probability that the Bank of England will expand the assets purchase program due to the slowdown in the UK economic recovery. The Pound fell against all 16 major currencies yesterday and its weakness becomes more and more apparent.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 07.09.10: CHF: Swiss Franc is strong and awaits investors’ additional attention

At the Forex currency market on Tuesday Swiss Franc rate is going up slightly despite general uncertainty of the external background.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF; however it moves along the signal line today and is not giving a clear signal. Stochastic Oscillator has not formed a signal either on Tuesday.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0135 the pair will go to 1.0180 and 1.0230. If the pair exceeds the level 1.0070, sellers’ targets will be the levels of 1.0020 and 0.9950.
As became known this morning unemployment rate in Switzerland increased to 3.8% in August while analytics expected reduction to 3.7%.
According to the data released earlier GDP level in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) in QII against the forecast of +0.8% (+2.6% y/y). Investments into the CHF are getting more and more attractive for the Forex investors: market realizes that the SHF does not constitute a menace at the moment and is not planning to do it in the nearest future.
We would recall that according to the data released earlier private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data-1.80). Index is calculated on the basis of the several indicators and the fact that it is above 1.50 is an indication of the favourable economic development in the country.
Information released last week helped to clarify Swiss exports situation in 2009. Thus more than 50% of exports were concentrated in the West European countries, in Japan and the USA. For comparison: Swiss GDP in 2009 was 536 billion francs, while exports volume amounted to 181 billion francs – ie 34% of GDP. Worth noting that leading indicator index in Switzerland reduced to 2.18 points in August against the previous level of 2.22 points – economists believe that the data is not too positive, as the slump expectations were not that low; however this factor did not make the overall picture of Swiss economy more negative. Swiss National Bank continues to work hard to keep inflation in the positive area which is a positive factor for Switzerland. The fact that investors are averse to risks at Forex counts in favor of CHF at Forex – public debts as well as budget deficit is at a low level in Switzerland; which is another merit of the CHF.
It became known on Monday that the Bank of Switzerland currency reserves reduced to the level of 218.1 billion francs in August against the previous value of 219.5 billion francs. At the same time released revised statistics for July has improved.
We can draw to conclusion that SHNB spends less money on holding Franc’s rate in the reasonable range – note that the Franc has consolidated by 10% on average against the Euro since the beginning of the year.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 07.09.10: JPY: Yen resumed steady growth

At the Forex currency market on Tuesday the Japanese Yen rate continued the growth interrupted last week – following the meeting which ended today and where the Bank of Japan did not make any crucial decisions, buyers turned to the Yen again.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY on Tuesday and it is going down, confirming a pair previous sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: sellers’ targets today will be the levels of 83.10 and 82.70.
As became known on Tuesday morning the Bank of Japan kept the interest rate unchanged at the level of 0.1% per annum, lending volume was also left unchanged.
The head of the Bank Shirikawa noted in his comments that authorities are closely monitoring the course of events at the currency market and the growth of Yen is a negative factor for the exports. However the measures to be taken by the Bank will depend of the state of economy rather than on market fluctuation.
Speaking about the prospects Shirakawa stated that the U.S. economy is recovering, however its future is obscure and the growth rate is below expectations. At the same time monetary authorities in Japan should be focused on the downside risks in order to halt them as the main task now is to increase the growing capacity.
Earlier monetary politician Ozzava’s advisor noted that the possibility of the currency intervention by the Bank of Japan should not be excluded– however it is required to set clear objectives for the monetary system reforms. The politician noted also that the Bank of Japan has sufficient reserves to overcome deflation even on its own. Earlier Democratic Party representative Mr. Ozzava came out with a statement regarding economy and expensive Yen: he noted last week that it is necessary to halt the rise of the Yen; however he did not suggest any ways to do it, specifying only that resources of the Bank of Japan in this respect are limited. In general Ozzava stressed that the Yen’s growth is not that crucial in the long term prospects.
Japanese Prime Minister Khan stated earlier that authorities are planning to review the issue of the radical tax reform soon: they are also going to discuss the issue of fiscal reform. Khan noted also that government intends to stimulate new jobs creation to assist economy.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 07.09.10: NZD: New Zealand Dollar is going down today

The New Zealand Dollar rate is going down at the Forex currency market on Tuesday – due to the oil prices adjustment and the lack of any significant news.
Short term trend for the pair NZD/USD seems to be in the range, medium term trend is ascending.
Support levels: 0.7130, 0.6950.
Resistance levels: 0.7355, 0.7400.
In general the NZD rate copies the Australian Dollar behavior at Forex – at the morning meeting today the RBA decided to keep the interest rate at the previous level. Monetary politicians assured separately that the Australian economy is recovering steadily.
Forex investors felt the government enthusiasm redundant and the NZD began to be sold off.
Interest rate is at the level of 3.0% per annum in New Zealand now. Two weeks ago the Reserve Bank of New Zealand raised the interest rate for the second time at a run – to 25 basis points, then an interval in the sequence of the rises was announced. “Cessation of the further monetary incentive measures is appropriate. The pace and scope of the further rate increases is likely to be more moderate than anticipated in the June statement”, said the Head of the Bank, Alan Bollard in his comment. He stressed that previous NZD growth runs counter to the plans to mitigate New Zealand economy prospects. “Growth in the economies of our trading partners proved to be better than we predicted, however outlooks have worsened. Although prices for the raw materials are still high, they have become more moderate”.
The data released earlier showed unexpected growth of unemployment rate in QII in New Zealand, therefore domestic demand in the country remains limited and economy does not receive additional support for the growth, as has been expected by the Reserve Bank of New Zealand.
Labour market growth in the country has apparently faced some difficulties, which the RBNZ passed over in silence while saying that pace of the interest rate increases will be moderate in the future. Thereby an interval in the chain of the interest rate increases can be quite long lasting.
According to the RBNZ head Mr. Bollard GDP growth will continue in the future; however the economic growth process will be slow. Bollard also stated that inflationary pressure will intensify in the nearest future.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 07.09.10: AUD: investors’ risk averse caused Australian Dollar sales

At the Forex currency market the Australian Dollar rate is going down today – investors’ risk averse on Tuesday was caused by the U.S. publication regarding the lack of objectivity of the previous European stress-tests. At the same time today’s RBA meeting passed traders by.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD; however is it going down, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: sellers’ targets today will be the levels of 0.9010 and 0.8950.
Thus, the Reserve Bank of Australia kept the current interest rate unchanged at the level of 4.50% per annum in Australia as markets had expected. There was nothing new in Mr. Stevens’ comments: he stressed that the world economy outlook is still vague although the Australian economic recovery rate is quite acceptable.
The rate will be maintained at the current level for the five consecutive months and investors do not expect it to change until the beginning of the next year.
According to the data released yesterday GDP level in Australia rose to the maximum of the last three years in QII demonstrating consolidation by 1.2% against the forecast of 0.9%. Previous index value was at the level of 0.7%. %. Economists believe that Chinese demand for iron ore is an activator of the Australian economic growth. New interest rate increase hardly threatens Australia. Interest rate in Australia is at the level of 4.50%per annum now. The main and official version of the last RBA meeting is as follows –current level of the inflation decline cannot prevent from undertaking drastic measures to tighten monetary policy.
It became known earlier that private construction spending in Australia reduced by 0.4% (-4.8% y/y) in QII. For economists released statistics became another stroke to portray a cheerless picture in the construction sector of the country. Thus, the decline in the sector is the highest since the beginning of the 2000’s; nevertheless sluggish growth still continues.
It should be noted that the retail sales data released earlier appeared to be better than forecasts which along with the housing market data would give the AUD the medium term support. It seems that the demand’s response to the statistics and current situation is becoming more realistic at the market and as a result the Australian Dollar looks more attractive at Forex than its colleagues from the raw material producing countries.
Last week statistics frustrated Forex traders – according to the data trade balance in Australia reduced to +A$1.89 billion in July against the previous value of +A$3.44 billion. The narrowing of the Australian’s trade balance puzzled experts, although the decline in the iron ore and coal exports has been already observed earlier.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 08.09.10: Euro regains after yesterday’s fall

The pair EUR/USD is traded with a slight increase at the Forex currency market on Wednesday morning after the fall yesterday.
By 10:45 Moscow time the Euro is at 1.2722 against closing session level of 1.2681 yesterday.
The growth today is the result of the technical correction after the fall yesterday. Traders are also apprehensive of the “Beige book”” released yesterday in the USA, as it is expected that it will confirm the U.S. economic recovery slowdown once again.
The regular meeting of the U.S. Federal Reserve is scheduled for 21 September, therefore the data released in advance of the meeting on this and the next week will be very important
Presumably the pair EUR/USD will be in the range of 1.2650-1.2830 on Wednesday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 08.09.10: GBP: Pound is growing however with little foundation

At the Forex currency market the British Pound Sterling rate is going up – after 2 days of decline at the beginning of the week the currency reached the levels attractive for purchase.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and is moving in parallel to the signal line, not forming a clear signal. Stochastic Oscillator is giving a pair buy signal, being in the neutral zone.
Forex recommendations: if the current external background maintains buyers’ targets today will be the levels of 1.5460 and 1.5490.
As became known on Wednesday production in the UK manufacturing sector increased by 0.3% on monthly basis (+4.9% y/y) in July. Industrial production rose by 0.3% as well, while the rise by 0.4% was expected.
Halifax houses prices statistics became an incentive for the growth in the morning – the Pound went up to the level of 1.5480.
According to the data released earlier UK houses prices declined by 0.3% m/m (+1.5% y/y) against the previous fall by 0.1% m/m as per Hometrack. Thus the situation in the housing sector is getting worse. As per the Rightmove report, number of people who buy a house for the first time can decline to the new low even before the end of this year – according to the survey the number of those who planned and bought a house in QIII 2010 amounted to 22.2% against 30.8% a quarter earlier. If experts’ forecast justifies, the situation in the UK housing market will become more complicated; analytics note that there is ground for concern even now.
Economists believe that consumer finance index in the UK is at the low of the year in August – 37.9 points against the previous level of 37.2 points. At the same time the UK quarterly business confidence index has also reduced. All these put together suggest that the spread of pessimism to the households intensifies.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 08.09.10: CHF: Franc is in demand and is going up for the third consecutive session

At the Forex currency market on Wednesday Swiss Franc rate continues to consolidate – amid the global instability the Franc looks like one of the protective currencies.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going down, giving a pair sell signal. Stochastic Oscillator is giving a similar signal.
Forex recommendations: if current external background maintains sellers’ targets today will be the levels of 1.0100 and 0.9970.
Swiss statistics released earlier was not the most positive: number of unemployed in the country increased by 0.55 thousand in August, it became the first growth rate in 6 months. Altogether number of unemployed has reduced by 33.5 thousand since the beginning of the year. Unemployment rate remained at the level of 3.6% in August.
In general Swiss economy seems stable: GDP level in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) in QII against the forecast of +0.8% (+2.6% y/y) and private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data-1.80). Index is calculated on the basis of the several indicators and the fact that it is above 1.50 is an indication of the favourable economic development in the country.
Investments into the CHF are getting more and more attractive for the Forex investors: market realizes that the SHF does not constitute a menace at the moment and is not planning to do it in the nearest future. The fact that investors are averse to risks at Forex counts in favor of CHF at Forex – public debts as well as budget deficit is at a low level in Switzerland; which is another merit of the CHF.
Information released last week helped to clarify Swiss exports situation in 2009. Thus more than 50% of exports were concentrated in the West European countries, in Japan and the USA. For comparison: Swiss GDP in 2009 was 536 billion francs, while exports volume amounted to 181 billion francs – ie 34% of GDP. Worth noting that leading indicator index in Switzerland reduced to 2.18 points in August against the previous level of 2.22 points – economists believe that the data is not too positive, as the slump expectations were not that low; however this factor did not make the overall picture of Swiss economy more negative. Swiss National Bank continues to work hard to keep inflation in the positive area which is a positive factor for Switzerland.