LiteForex's analytics

[LF.Anastasia]

Forex Analytics of LiteForex of 29.09.10: CHF: Franc soared up to new highs

At the Forex currency market Swiss Franc has become one of the newsmakers soaring up to a new historic peak of 0.9735 in pairing with the USD. Preconditions for the growth are still there.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and it is going down on Wednesday giving a pair sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: targets for pair’s traders will be the levels of 0.9700 and 0.9650.
Swiss economy seems 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.
At the last week meeting Swiss National Bank decided to keep interest rate at the level of about 0.25% for three months. The Bank announced that at 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.
Thus Franc has become a serene harbor once again amid dollar’s instability.
Not too positive Swiss data has been pushed to the sidelines. Earlier positive data was released on the Swiss Exports in August: the index increased by +8.6% on annual basis. As Swiss Customs administration recorded in the documents surplus increase is associated with the expensive Franc. Furthermore extra working day in August also counted. 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 29.09.10: AUD: Australian Dollar tends to grow following the sideways trend

At the Forex currency market the Australian Dollar rate resumed its steady growth – external optimism pushed the currency out of the sideways trend.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it is growing confirming a pair previous buy signal. Stochastic Oscillator is giving a similar signal on Wednesday.
Forex recommendations: buyers’ targets today will be the levels of 0.9770 and 0.9825.
The Australian economy has not undergone significant changes since last week.
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.
As became known on Wednesday leading indicators index in Australia increased by 0.4% to 269.5 in July 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 by 0.4% (+4.3% y/y) in July
Evans stressed that such data can encourage the RBA to raise interest rate to 4.75% at the next meeting.
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 and it has been maintained at this level for nearly half a year.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 29.09.10: JPY: Japanese Yen builds up its strength steadily going beyond 84.0

At the Forex currency market the Japanese Yen rate continues to grow steadily.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it continues to go down confirming the previous sell signal for the pair. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: traders’ targets today will be the levels of 83.50 and 82.90.
Japanese Economy Minister said today that authorities intend to take all necessary steps if trading situation at the currency market requires. According to him intervention into the currency market was just a temporary measure and no one is going to pour liquidity on the trading floors infinitely.
Investors began to feel concern about the Bank of Japan policy last Friday – traders started to discuss the probability of another intervention into the currency trading by the Bank of Japan when the pair USD/JPY had soared up above the level of 85.00 with no apparent reason. Traders did not get official confirmation of the new intervention. 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. Finance Minister Noda noted also that China should continue to work out currency reforms. Finance Minister Noda noted last Friday that although different countries interpreted intervention differently he believed that his country’s actions were appropriate; however he agreed 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.
The head of the Bank of Japan Shirakawa said earlier 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.
The Yen’s growth to the level of 81.0 is probable however a chance of technical correction cannot be excluded either.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 29.09.10: CAD: Canadian Dollar resumed its growth

At the Forex currency market on Wednesday the Canadian Dollar shifted to the growth following the fall at the beginning of the week when it left six- week highs in pairing with the USD.
Forex forecast: MACD indicator is close to the signal line for the pair USD/CAD and is not giving a clear signal. Stochastic Oscillator is giving a pair sell 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 1.0350 the pair will go to 1.0390 and 1.0450. If the level of 1.0200 is exceeded, traders’ targets will be the levels of 1.0170 and 1.0140.
The situation in Canada remains unchanged. The Bank of Canada next meeting will be held only on 19 October and market thinks that the interest rate increase is probable. At the meeting two 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.
Statistics released in September did not please investors a lot: 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 3-4 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.
Leading indicators index in Canada increased by 0.5% in August, retail sales reduced by 0.1% in July.
According to Timothy Lane, governor deputy of the Bank of Canada, 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 30.09.10: EUR/USD awaits Bernanke’s presentation tonight

The pair EUR/USD subsides on Thursday morning following the growth above 1.36 yesterday at the Forex currency market. The USD ends September with the most dramatic fall over the last two years.
By 10.25 Moscow time the Euro is at 1.3576 against closing session level of 1.3626.
The pair is at the 5 months highs due to the expectation of the U.S. GDP release which will probably show continuation of the slowdown in the U.S. economic recovery rate. This afternoon Federal Reserve chairman Ben Bernanke will give a presentation and traders will look for the clues in his speech on the expansion of the quantitative easing program – in particular market awaits announcement of the increase in volumes of bonds purchase in his presentation.
Most likely the pair EUR/USD will be in the range of 1.3480-1.3610 on Thursday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 29.09.10: GBP: Pound went up again

At the Forex currency market the British Pound rate goes up on Thursday – housing statistics was favourable in September however general three- month trend leaves much to be desired.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it is going up giving a pair buy signal. Stochastic Oscillator is giving a similar signal today being in the neutral zone.
Forex recommendations: investors’ targets today will be the levels 1.5890 and 1.5920.
As it became known on Thursday Nationwide houses prices increased by 0.1% m/m (+3.1% y/y), however three-month trend remains negative. The Pound was not too happy with the data however drastic decline was not observed.
Housing statistics released earlier was not good either. As per Hometrack estimation houses prices reduced by 0.4% on monthly basis (+1.0% y/y) in September. It means that released statistics demonstrated once again that the rise in spring was not a steady growth.
It became known yesterday that mortgage lending in Great Britain increased by 1.7 billion pounds in August; consumer lending in the country rose by 1.5 billion pounds in August.
The Bank of England representative Posen noted earlier that one should not underestimate the potential for economic growth in the UK; measures to increase incentives are perfectly logical in this situation. According to him there are obvious reasons now for buying British bonds and it would be better if Central Banks coordinated their efforts.
The Bank of England representative Bean noted earlier that the main purpose of the regulator’s soft policy is to stimulate consumer spending which will support the country’s economy in the medium-term. Bean described MRS current approach as aggressive and directed exclusively to combat financial crisis.
The Bank of England interest rate is at the level of 0.50% per annum now where it remains for five consecutive months.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 30.09.10: JPY: Japanese Yen is approaching intervention levels

The Japanese Yen rate goes up at the Forex currency market on Thursday – for the ninth session in a row, which brings the JPY closer to the levels of the currency intervention carried out by the Bank of Japan on 15 September.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it continues to go down giving a pair sell signal. Stochastic Oscillator is giving a similar signal today being in the oversold zone.
Forex recommendations: traders’ targets today will be the levels of 82.50 and 82.00.
Ex-employee of the Finance Ministry of Japan Mr. Sakiraba noted today that Japan can benefit from a strong national currency as the market general direction will be the same even if intervention is conducted by the joint efforts of several countries.
He also noted that joint intervention of the USA and Japan is hardly probable and effect of the intervention of the 15 September was of short duration therefore the country shall abandon such inefficient actions in the future.
The head of the Bank of Japan Shirakawa said earlier 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.
The Yen’s growth to the level of 81.0 is probable however a chance of technical correction cannot be excluded either.
By the way talk about disadvantages of the intervention arises more often. Japanese Economy Minister said yesterday that authorities intend to take all necessary steps if trading situation at the currency market requires. According to him intervention into the currency market was just a temporary measure and no one is going to pour liquidity on the trading floors infinitely.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 30.09.10: CHF: Swiss Franc retreats little by little

Swiss Franc rate continues to go down at the Forex currency market today – the currency is affected by the overbought factor.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF however it goes up giving grounds for a pair buy signal. Stochastic Oscillator is giving a similar signal.
Forex recommendations: buyers’ targets today will be the levels of 0.9840 and 0.9880.
Although Swiss Franc broke a new record in pairing with the USD yesterday reaching the level of 0.9734 the rebound in the pair is apparent.
At the last week meeting Swiss National Bank decided to keep interest rate at the level of about 0.25% for three months. The Bank announced that at 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 ratel 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.
Swiss economy seems 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.
Thus Franc has become a serene harbor once again amid dollar’s instability.
Not too positive Swiss data has been pushed to the sidelines. Earlier positive data was released on the Swiss Exports in August: the index increased by +8.6% on annual basis. As Swiss Customs administration recorded in the documents surplus increase is associated with the expensive Franc. Furthermore extra working day in August also counted.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 30.09.10: AUD: Australian Dollar slides down after many week highs

At the Forex currency market on Thursday the Australian Dollar rate goes down – which was caused by the many weeks of highs and not very optimistic investors’ sentiments at the global capital markets. In addition traders’ sentiment was spoiled by the morning Australian statistics.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD however it started to descend giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today being in the overbought area.
Forex recommendations: if traders’ current sentiments maintain and in case of breakdown at the level of 0.9630 the pair AUD/USD will go to 0.9570 and 0.9530.
The following Australian data was released today:

– Lending in the private sector in August: +0.1% m/m, +3.1% y/y against the level of +0.1% m/m in June;
– Construction permits in August: -4.7% m/m against +0.1% in June.
Thus poor statistics prevented development of the buying sentiments for the Aussie; currency overbought level also indicates the necessity of rebound.
According to statistics released earlier leading indicators index in Australia increased by 0.4% to 269.5 in July 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 Westpac 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 by 0.4% (+4.3% y/y) in July; Evans stressed that such data can encourage the RBA to raise interest rate to 4.75% at the next meeting.
Another statistics showes that GDP level in Australia rose to the maximum value 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.
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 and it has been maintained at this level for nearly half a year.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 30.09.10: CAD: Canadian Dollar determines movement direction after three days of subsidence

At the Forex currency market the Canadian Dollar rate goes up slightly today however technical signals are differently directed.
Forex forecast: MACD indicator is in the positive area for the pair USD/CAD however it goes up giving grounds for a pair buy signal. Stochastic Oscillator is not giving a clear signal being in the neutral zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0350 the pair will go to 1.0390 and 1.0450. If the level of 1.0290 is exceeded, traders’ targets will be the levels of 1.0240 and 1.0200.
It became known yesterday that index of the raw product prices in Canada increased by 2.2% in August, producer prices index rose by 0.4% on monthly basis in August.
Everything is quiet in Canada. Statistics released in September did not please investors a lot: 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 3-4 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.
Leading indicators index in Canada increased by 0.5% in August, retail sales reduced by 0.1% in July.
According to Timothy Lane, governor deputy of the Bank of Canada, 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.
The Bank of Canada next meeting will be held only on 19 October and market thinks that the interest rate increase is probable. At the meeting two 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.