LiteForex's analytics

[LF.Anastasia]

Forex Analytics of LiteForex of 21.09.10: AUD: Australian Dollar rate makes no headway awaiting catalysts

The Australian Dollar rate continues to be near the opening level at the Forex currency market on Tuesday – following the release of the minutes of the RBA last meeting currency cannot determine movement direction.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is going up giving a pair buy signal. Stochastic Oscillator is giving an antipodal signal on Tuesday.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9490 the pair will go to 0.9525 and 0.9550. If the level of 0.9410 is exceeded, traders’ targets will become the levels of 0.9360 and 0.9300.
Following the head of the Reserve Bank of Australia Stevens’ quite aggressive statement yesterday when he emphasized that the natural resources boom would continue in the medium term resulting in the Australian economic growth which would be in keeping with the trend and in the year of 2011 would accelerate; the Aussie began to grow. Stevens noted also that if the economy slowdown risks are not justified the Bank will start monetary tightening policy.
The minutes of the RBA last meeting was released this morning which indicated that the regulator may rise interest rate if the situation in the country requires.
The next RBA meeting is scheduled for 5 October and market believes that the RBA will announce interest rate increase again. Now the rate is at the level of 4.50% per annum where it has been maintained for nearly half a year.
According to the data released earlier 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 made it possible not to undertake drastic measures to tighten monetary policy.
The AUD looks quite steady and stable at Forex

 

[LF.Anastasia]

Forex Analytics of LiteForex of 22.09.10: Euro soared to the 6 weeks highs

The pair EUR/USD continues to be traded upward at the Forex currency market on Wednesday morning – the pair is close to the 6 weeks highs following the U.S. Federal Reserve meeting yesterday.
By 10.00 Moscow time the Euro is at 1.3287 against closing session level of 1.3263 yesterday.
As expected the regulator has kept the interest rate unchanged in the previous range of 0-0.25% per annum however he did not announce assets buyback program extension while market had also expected it.
However Federal Reserve mentioned the possibility of the further financial aid to the economy is required. Apparently traders used this comment as a catalyst for the major pair increase.
Obviously the FR is not yet ready to tighten monetary policy at the moment and considering the current state of economy the regulator feels more comfortable feeding the economy with money which will became a factor pressure on the USD.
Most likely the pair EUR/USD will be in the range of 1.3130-1.3350 on Wednesday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 22.09.10: GBP: British Pound Sterling is shifting to the ascending trend

At the Forex currency market the British Pound Sterling continues the growth started earlier - following the U.S. Federal reserve meeting investors began to step out of the dollars positions more actively. However there is no solid ground for the GBP growth either.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and started to go up giving a pair buy signal. Stochastic Oscillator is giving a similar signal.
Forex recommendations: buyers’ targets today will be the levels of 1.5730 and 1.5790.
It became known today that Confederation of British Industry has changed its UK growth forecast for the year 2010 – thus as per agency expectations the country’s GDP this year will amount to 1.6% against June forecast of 1.3%; in 2011 the British economy will go up to 2% against the previous forecast of 2.5%.
Confederation experts explained that decrease in the forecast was caused by the impact of the budget expenditure reduction program.
It became known earlier that mortgage approvals in the UK amounted to 45 thousand in August; previous value was 47 thousand; market was not elated by this information which caused the Pound decrease; amid the Rightmove data which demonstrated another decline in the houses prices the situation in the sector seems deep gloom.
The Bank of England interest rate is at the level of 0.50% per annum now where it remains for five consecutive months.
The data on the retail sales level in Great Britain released last week appeared to be very weak, demonstrating decline by 0.5% while investors had expected growth by 0.3% in August.
It is an alarm bell for the economy: it indicates in particular that people feel cautious and alerted regarding their spending as the British economy outlooks are still very uncertain.
According to the data released yesterday public sector need of the borrowed funds in August amounted to 5.804 billion pounds against the forecast of 8.1 billion pounds. In August 2009 public sector declared the need for the additional funds in the amount of 10.317 billion pounds.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 22.09.10: CHF: Swiss Franc might be on sale

At the Forex currency market on Wednesday Swiss Franc is traded near the opening level as the currency had been growing actively for the last several session and now it looks a bit overheated. It is possible that the Franc will be corrected today.
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 however is giving a pair buy signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9930 the pair will go to 0.9880 and 0.9800. If it does not happen the pair will continue to consolidate near the current levels.
Swiss economy seems to be stable at the moment: 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.
Yesterday positive data was released on the Swiss Exports in August: the index increased by +8.6% on annual basis.
As the Swiss Customs administration noted surplus increase is associated with the expensive Franc. Furthermore extra working day in August also counted.
We would recall that the Franc declined significantly at Forex due to the bad news pressure from the SNB. Thus at the last week meeting the Bank decided to keep the interest rate at the level of 0.25% for three months. However the major impact on the CHF had another factor: the Bank announced that with the current interest rate inflation level in the country would amount to 0.7% this year and 0.3% in 2011. By the year of 2012 inflation level will hit the level of 1.2%. Thus indicated inflation level makes it possible for the SNB to leave monetary policy unchanged which affected the Franc’s rate.
It became known earlier that investors’ optimism index ZEW in Switzerland declined to -5.1 in September against the previous level of 9.1.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 22.09.10: JPY: Yen continues to consolidate

At the Forex currency market the Japanese Yen rate consolidates on Wednesday as investors stepped out of the USD positions following the FR meeting yesterday, The JPY growth in the last few days can be attributed to the corrective rebound after the fall for almost 300 points last week due to the currency intervention.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is going down giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: bearish trend for the pair will intensify in case of breakdown at the level of 84.80 – after that sellers’ targets will become the levels of 84.50 and 84.00.
The Bank of Japan representative Miyao stated today that any change in monetary policy is probable as its effect should be closely monitored.
The head of the Bank of Japan Shirakawa said in the middle of the week that intervention conducted on 15 September was the only logical solution to the issue of the growing cost of the Yen as the situation required urgent intervention and economic salvation from the impact of the expensive domestic currency.
The head of the Bank Shirakawa made a statement in which he noted that authorities should closely monitor the downside risks to the national economy; the politician gave an indication that the Bank’s further intervention is probable. On Thursday Shirakawa noted that intervention would help to appease Forex market; currency market as well as stock market is unstable although the economy itself demonstrates moderate recovery.
We would remind that currency intervention conducted by the Bank of Japan last week was intended to reduce significant fluctuation at the currency market however it would not help the country to curb deflation. Noda noted also that China should continue to work out currency reforms. Finance Minister Noda noted on Friday that although different countries interpret intervention differently he believes that his country’s actions are appropriate; however he agrees that the whole background of the process should be explained.
Naoto Khan won elections and became the head of the Democratic Party, retaining the leader’s chair. In response the Yen surged to a new peak as Khan is not so ardent supporter of the currency intervention as his rival Odzawa. The last events showed that investors’ joy was premature.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 22.09.10: AUD: Australian Dollar continues to grow

At the Forex currency market on Wednesday the Australian Dollar rate continues to grow – on the whole released statistics is positive, monetary politicians’ sentiments are optimistic.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD today and it continues to go up giving a pair buy signal. Stochastic Oscillator is in the overbought area and is giving a similar signal.
Forex recommendations: if the current trend maintains buyers’ targets will be the levels of 0.9650 and 0.9700.
As became known on Wednesday leading indicators index in Australia increased by 0.4% in July to 269.5 as per Westpac-Melbourne estimation; at the same time its annual growth rate reduced to 6.8% against the previous level of 7.4%. As the chief economist Bill Evans noted current forecast assumes that average growth in 2010 will amount to 3.5% and it will be steady until the end of the year despite sudden changes in some sectors.
Coincident indicators index also increased in July: by 0.4% (+4.3% y/y)
Evans stressed that this data can encourage the RBA to raise interest rate to 4.75% at the next meeting.
Following the head of the Reserve Bank of Australia Stevens’ quite aggressive statement earlier when he emphasized that the natural resources boom would continue in the medium term resulting in the Australian economic growth which would be in keeping with the trend and in the year of 2011 would accelerate- the Aussie began to grow. Stevens noted also that if the economy slowdown risks are not justified the Bank will start monetary tightening policy.
The minutes of the RBA last meeting was released yesterday; it indicated that the regulator may increase interest rate if the situation in the country requires. The next RBA meeting is scheduled for 5 October and market believes that the RBA will announce interest rate increase again then. Now the rate is at the level of 4.50% per annum where it has been maintained for nearly half a year.
According to the data released earlier GDP level in Australia rose to the maximum of the last three years in QII demonstrating increase 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 made it possible not to undertake drastic measures to tighten monetary policy so far.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 22.09.10: CAD: Canadian Dollar goes up steadily in the middle of the week

At the Forex currency market the Canadian Dollar continues the growth started on Monday. Rise in oil prices provides support to the currency.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and it is going down giving a pair sell signal. Stochastic Oscillator is giving a similar signal.
Forex recommendations: if the current external background maintains sellers’ targets will be the levels of 1.0150 and 1.0100.
Canadian economic situation remains stable. Statistics released in September did not please investors: thus number of began constructions in Canada reduced by 3% m/m at the same time number of new houses foundations totaled to 183 thousand. If the situation does not improve in the nearest few months, the CAD will be under significant pressure. The Canadian trade balance deficit increased to 2.7 billion CAD in August against 1.8 billion in July. It was caused by the exports volume reduction which traditionally supports economy.
At the meeting 2 weeks earlier the Bank of Canada decided to raise interest rate level to 1% per annum (+25 basis points). Although the decision was entirely predictable Forex market responded to this by buying up CAD, ignoring monetary politicians accompanying comments that the situation in the economy is vague and uncertain.
In the release the Bank of Canada emphasized that national economy growth rate slowed down in QII this year although the process is within the forecast scope. The Bank gave an indication that although some stimulation of the financial system will be continued, further monetary policy tightening as well as rate rise is not excluded.
According to Timothy Lane, the deputy of the Bank of Canada governor, the economic recovery rate in Canada is more moderate now compared with the previous quarters. The country’s economy grows only due to the public and private spending while actual GDP is still not far from its pre-crisis level.
In his view revitalization of the country’s economy is uneven and economic activity level is lower than expected.
He also reaffirmed the earlier GDP forecast for Canada noting that expected economic growth this year is about 3.5%, in 2011 –about 2.9%.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 23.09.10: Euro is at the five months maximum

The pair EUR/USD is traded close to the start level at the Forex currency market on Thursday morning however it is still near the 5 months maximum.
By10.15 Moscow time the Euro is at 1.3398 against closing session level of 1.3405 yesterday.
At the same time the intraday peak became the level of 1.3440 for the first time since April of this year.
External background is not the most positive form the USD. Market believes that the USD can decline even further due to the obscure prospects of the American economy.
Sales data on the secondary housing market will become known this afternoon – it is expected that the index will rise by 7.1% y/y.
Most likely the pair EUR/USD will be n the range of 1.3200-1.3450 on Thursday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 23.09.10: JPY: Dollar tries to bring into challenge Yen’s privileges

At the Forex currency market at the end of the week trend for the pair USD/JPY will probably change: after three days of steady consolidation of the JPY against the weak dollar the pair has begun to go up again.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY on Thursday and is giving a pair sell signal. Stochastic Oscillator is giving an antipodal signal today.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 84.60 the pair will go to 85.25 and 85.70. If the level of 84.25 is exceeded, sellers’ targets will be the levels of 83.90 and 83.40.
Apparently investors continue to fear the Bank of Japan interference into the currency trading as a continuation of intervention which causes instability in the trading dynamics for the pair.

We would remind that currency intervention conducted by the Bank of Japan last week was intended to reduce significant fluctuation at the currency market however it would not help the country to curb deflation. Noda noted also that China should continue to work out currency reforms. Finance Minister Noda noted on Friday that although different countries interpret intervention differently he believes that his country’s actions are appropriate; however he agrees that the whole background of the process should be explained.
Naoto Khan won elections and became the head of the Democratic Party, retaining the leader’s chair. In response the Yen surged to a new peak as Khan is not so ardent supporter of the currency intervention as his rival Odzawa. The last events showed that investors’ joy was premature.
The Bank of Japan representative Miyao stated today that any change in monetary policy is probable as its effect should be closely monitored.
The head of the Bank of Japan Shirakawa said on Wednesday that intervention conducted on 15 September was the only logical solution to the issue of the growing cost of the Yen as the situation required urgent intervention and economic salvation from the impact of the expensive domestic currency. The head of the Bank Shirakawa made a statement in which he noted that authorities should closely monitor the downside risks to the national economy; the politician gave an indication that the Bank’s further intervention is probable. On Thursday Shirakawa noted that intervention would help to appease Forex market; currency market as well as stock market is unstable although the economy itself demonstrates moderate recovery.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 23.09.10: CHF: Technical correction is taking shape for Swiss Franc

At the Forex currency market Swiss Franc rate goes down today after the four days of steady growth. Technical rebound is required for the CHF to continue ascending trend as it will help to ease overheat.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and it is going down confirming a pair sell signal. Stochastic Oscillator has not determined a signal today yet.
Forex recommendations: to make sure that the pair USD/CHF will continue to decline we shall see breakdown at the level of 0.9835, if it does not happen then the pair will continue to consolidate close to the current levels.
As the Swiss Customs administration noted in the documents surplus increase is associated with the expensive Franc. Furthermore extra working day in August also counted.
We would recall that the Franc declined significantly at Forex due to the bad news pressure from the SNB. Thus at the last week meeting the Bank decided to keep the interest rate at the level of 0.25% for three months. However the major impact on the CHF had another factor: the Bank announced that with the current interest rate inflation level in the country would amount to 0.7% this year and 0.3% in 2011. By the year of 2012 inflation level will hit the level of 1.2%. Thus indicated inflation level makes it possible for the SNB to leave monetary policy unchanged which affected the Franc’s rate.
It became known earlier that investors’ optimism index ZEW in Switzerland declined to -5.1 in September against the previous level of 9.1.
Swiss economy seems to be stable at the moment: 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.
Earlier positive data was released on the Swiss Exports in August: the index increased by +8.6% on annual basis.