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[LF.Anastasia]

Forex Analytics of LiteForex of 13.10.10: AUD: Nevertheless Australian Dollar desire to grow overbalances all others

At the Forex currency market the Australian Dollar rate on Wednesday afternoon soared up despite traders’ negative sentiments in the morning.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD however it is moving along its signal line and does not give a clear signal. Stochastic Oscillator is giving a pair buy signal today.
Forex recommendations: if the current external background will be maintained buyers’ targets will be the levels of 0.9940 and 0.9975.
The growth of the Aussie today after the rollback from the 27-years highs is supported largely by the weakness of the USD.
We would remind that earlier the RBA left the interest rate unchanged while market expected the rate increase to 4.75% - Stevens, the head of the Bank, noted in his comments later that at some moment in the future economy may require higher interest rates. In principle such a clause should contain the AUD’s fall however the currency descending movement deprives buyers of the hope for parity with the USD. Interest rate has been maintained at the current level for half a year already.
The Australian Finance Minister Swan thinks that current growth in the Australian Dollar against the USD is a challenge to the national economy as it can affect the levels of tax collection and create complications in the management of the country’s economy. Agriculture, tourism and manufacturing divisions were indicated as the most vulnerable sectors of economy. “No doubt that the AUD growth will impact on corporate profits while there is also downside risk to earnings” –stressed Swan. According to him global growth outlooks still remain vague as economic growth in the developing countries is anemic and growth prospects in these countries are delusive.
Swan noted yesterday that the strength of the Australian Dollar reflects the strength of the national economy and Australia is not going to introduce any restrictions on the growing AUD. Swan says that excellent service of the Australian banking system is obvious

 

[LF.Anastasia]

Forex Analytics of LiteForex of 14.10.10: Dollar’s supporters are receding
The pair EUR/USD is traded above the level of 1.40 at the Forex currency market on Thursday morning amid the rally at the global capital markets after the Central Bank of Singapore started tightening of monetary police enabling the rise of the domestic currency.
By 10.30 Moscow time the Euro is at 1.4091 against closing session level of 1.3961 yesterday.
Anti-Dollar sentiments at the market are still strong – traders are still waiting for the actions from the U.S. Federal Reserve; today’s news from Singapore where the boundaries of the currency range were expanded became another factor of pressure.
Investors interpreted the CB actions as an indication of the monetary policy tightening which caused retreat from the Dollar’s positions and rally in the major pairs – the Canadian Dollar soared to the parity with the USD, the Australian Dollar reached its 28-years highs, the Euro consolidated above 1.40 and approaching to 1.41.
Traders’ attention today will be drawn to the U.S. economy including labour market statistics.
Most likely the pair EUR/USD will be in the range of 1.3900-1.4110 on Thursday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 14.10.10: GBP: British Pound Sterling went up above 1.60

At The Forex currency market the British Pound Sterling rate went up above 1.60 today on the tide of general positive sentiment at the global capital market.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it goes up confirming a pair previous buy signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: buyers’ targets today will be the levels of 1.6040 and 1.6100.
The Bank of England Representative Mr. Tanker noted on Thursday that domestic economy has not become strong yet; the same refers to the global economy. He stressed that risks are still being observed in some countries. In the opinion of the monetary politician tightening of the Bazel III document will be positive for Great Britain.
The regulator decided to leave the interest rate unchanged at the level of 0.5% per annum last week; no accompanying documents have been issued which indicates that monetary politicians keep their intentions in force. The rate has been maintained at this level since 5 March 2009 and there are no plans to change it so far. The UK employment data released earlier showed that labor market in the country is still weak, jobs are not created as companies still cannot estimate exactly the prospects (temporary jobs index is 52.8 in September against 54.0 in August; permanent jobs index is 54.6 in September against 56.3 in August).
It seems that the Pound responds exclusively to the external background.
Surprisingly that the Pound feels so confident especially amid the poor statistics released yesterday and BCC warnings. According to the British Commerce Chamber (BCC) national economy once again gave warning to the Bank of England about a slowdown in the recovery rate which is also indicated in the today’s statistics. A week earlier the BCC applied with a request to the regulator to expand the UK economic incentives program as economic system recovery needs a recharge. According to the BCC experts recent data indicates of the coming recession even ignoring the previous GDP rise in Q II.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 14.10.10: CHF: Swiss Franc grows following the rest of the market

Swiss Franc rate demonstrates rapid growth at the Forex currency market on Thursday supported by the investors’ positive sentiments at the global capital markets.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and continues to go down which confirms a pair previous sell signal. Stochastic Oscillator is giving a similar signal on Thursday being in the oversold zone.
Forex recommendations: targets of the pair’s traders today will be the levels of 0.9480 and 0.9450.
Citigroup believes that GDP in Switzerland will increase by 3% this year which is significantly higher than the average forecast in comparison with the other countries. At the same time inflation levels are still close to the lows.
It is obvious that in the light of such forecast the SNB will keep the rate low for a long time since there is no need to tighten monetary policy any more.
We would remind that GDP in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) 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).
Earlier this week Finance Minister of Switzerland Mr. Mertz said that currency intervention against the Franc is unlikely to take place however it is not completely excluded. In his view deflation does not threaten Switzerland; however the talk about the so called “wars of currencies” undermines investors’ confidence in the global economy which is not too high.
Deputy Chairman of the Swiss National Bank Mr. Jordan noted Earlier that CHB risks of excess liquidity can be increased in the current economic situation and at the current rate level. Earlier representatives of the Bank of Switzerland noted that economic incentives have almost no effect on the situation in the country and it is time now to return to the issues of bankruptcies of major players in the financial sector.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 14.10.10: AUD: Australian Dollar rate exceeded new highs over 28 years

At the Forex currency market the Australian Dollar rate is traded upward for the third consecutive session on Thursday reaching the other 28-years highs at the level of 0.9993.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it goes up confirming a pair previous buy signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: buyers’ targets today will be the levels of 1.0020 and 1.0050.
Thus the Australian dollar is coming closer to the parity with the USD which it has been striving for so long.
The Australian Finance Minister Swan thinks that current growth in the Australian Dollar against the USD is a challenge to the national economy as it can affect the levels of tax collection and create complications in the management of the country’s economy. Agriculture, tourism and manufacturing divisions were indicated as the most vulnerable sectors of economy. “No doubt that the AUD growth will impact on corporate profits while there is also downside risk to earnings” –stressed Swan. According to him global growth outlooks still remain vague as economic growth in the developing countries is anemic and growth prospects in these countries are delusive.
Swan noted yesterday that the strength of the Australian Dollar reflects the strength of the national economy and Australia is not going to introduce any restrictions on the growing AUD. Swan says that excellent service of the Australian banking system is obvious
We would remind that earlier the RBA left the interest rate unchanged while market expected the rate increase to 4.75% - Stevens, the head of the Bank, noted in his comments later that at some moment in the future economy may require higher interest rates. In principle such a clause should contain the AUD’s fall however the currency descending movement deprives buyers of the hope for parity with the USD. Interest rate has been maintained at the current level for half a year already.
The next RBA meeting will be held on 2 November.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 14.10.10: CAD: Canadian Dollar reached parity level easily

At the Forex currency market the exchange rate of the Canadian Dollar exceeded parity level in pairing with the USD and now the pair USD/CAD is traded close to 1.003.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and it goes down which confirms a pair yesterday’s sell signal. Stochastic Oscillator is giving a similar signal today.
Forex recommendations: traders’ targets today will be the levels of 0.9970 and 0.9950.
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 a month ago 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.
В Finance Minister of Canada Mr. Flaherty said on Wednesday that Canada intends to balance its budget by 2015 and will become the first country in the Big Seven which will cope with the task successfully. The monetary politician noted that authorities’ stance on the income outlooks and new incentives measures remains cautious.
Flaherty believes that in the fiscal year which starts on 1 April 1015 the budget of Canada will show a surplus; and the return to the surplus will require much more efforts amid the U.S. slow recovery.
As the published document (financial forecast of Finance Ministry) showed - growth of Canadian economy in 2010 will amount to 3% (2.6% earlier); in 2011 – 2.5% (3.6% earlier)
We would note that the situation in the U.S will impact on the Canadian economy which increases some risks for the national economy.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 15.10.10: GBP: Pound is still in the power of bulls as long as it is above $1.

Forex analytics: Forex Pound analysis
Forex news: active growth of the Euro and Pound Sterling against the USD since June is a proof of the success of the European Central Bank and the Bank of England in the stabilization of the financial markets and regaining of the investors’ confidence which allows to expect consolidation of the European currencies for another 3-4% before the end of the year according to a survey carried out by the leading investment houses.
ECB and the Bank of England have done a good job – state debts crisis this year became a real test of the ECB and the Bank of England stability and they came out victorious from the battle, carrying their heads high. We give bullish forecast for the Euro and the Pound Sterling” said Bloomberg report.
In particular the Bank of England has no reason to worry about the increase of the Euro exchange rate against the USD as the Euro is approximately at the same level now as it was at the beginning of the year and the CB considered that level as quite acceptable. The Pound Sterling is completing the fifth consecutive week with the increase which is the repetition of the June record in rise this year.
Weekly graph: We use Forex indicator Ichimoku to find out long term trend: – Ichimoku Kinko Hyo (Ichimoku cloud) is an oscillator which indicates a dominant trend of the analyzed instrument with high probability.
Tenkan-sen (fast average with period 8)
Kijun-sen (average with period 26)
Senkou Span B (slow average with period 52)
Graph 1 (weekly) Ichimoku cloud reflects the long term state of the market as ascending for the pair – two key averages are in the “bullish” position and a fast moving average changed horizontal direction to the ascending – after testing the breakdown of the resistance level for $1,6000 (oversold basis) we stake for the growth with the target of $1.6370 – 38.2% of correction from the length of the downward wave of the global bearish trend from the level of $2.1164 to $1.3536. At the same time the indicated level is the top border of the Ichimoku cloud and oversold level along the slow moving average indicator. Strength index reflects convergence at the growth; maintenance of the tendency for the ascending trend , strong signal which in case of confirmation from the other indicators gives ground to keep the pair’s longs.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 15.10.10: CHF: Swiss Franc is being corrected on Friday after the surge yesterday

At the Forex currency market on Friday Swiss Franc rate goes down in pairing with the USD; such movement today can be considered as a technical rollback after the new historical high on Thursday to 0.9462.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF on Friday however it goes up today giving ground for a pair buy signal. Stochastic Oscillator is giving a similar signal today being in the neutral zone.

Forex recommendations: the pair buyers today will have levels of 0.9590 и 0.9630 as their targets.

Great demand for Swill Franc which is being observed lately is explained by the investors’ aversion to risks in the light of the ambiguous behavior of the U.S. Federal Reserve. Strong Franc is a good assets taking into account stability of the SNB.

In QII GDP in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) 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). Earlier this week Finance Minister of Switzerland Mr. Mertz said that currency intervention against the Franc is unlikely to take place however it is not completely excluded. In his view deflation does not threaten Switzerland; however the talk about the so called “wars of currencies” undermines investors’ confidence in the global economy which is not too high.
Deputy Chairman of the Swiss National Bank Mr. Jordan noted Earlier that CHB risks of excess liquidity can be increased in the current economic situation and at the current rate level. Earlier representatives of the Bank of Switzerland noted that economic incentives have almost no effect on the situation in the country and it is time now to return to the issues of bankruptcies of major players in the financial sector.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 15.10.10: JPY: Japanese Yen continues to put pressure on “buck” at the end of the week

At the Forex currency market The Japanese Yen rate continues to strengthen on Friday as it is in demand due to investors’ escape from the USD positions.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it goes down confirming a pair previous sell signal. Stochastic Oscillator is giving a similar signal today.

Forex recommendations: if the current external background maintains its strength and the pair breaks down the level of 80.90, traders’ targets today will be the levels of 80.50 and 80.10.

It became known today that industrial production in Japan reduced by 0.5% (revised data) and not by 0.3% as it was reported earlier.

The head of the Bank of Japan Shirakawa admitted on Friday that national economy recovery rate slows down; among the reasons causing it he mentioned strong Yen along with the negative dynamics of the foreign economics.

Shirakawa also noted that downward risks in the economy require attention from both monetary politicians and government of the country.

We would remind that the Bank of Japan decided to lower the interest rate to the level of 0% against the previous level of 0.1% last week. This decision was a surprise to the market as although traders were prepared for the actions of monetary policy easing they could not expect it to turn this way. The head of the Bank of Japan Shirakawa said in the comments that 2-years rates would be also reduced which would help to widespread the effect of soft policy. At the same time the Bank of Japan representative Suda noted later that economy is still in danger of bubbles in the government bonds sector.
It also became known that a new fund is going to be founded in the amount of 5 trillion yens to pour liquidity into the Japanese financial system – and in particular for the purchase of the government bonds and other assets. Japanese Finance Minister Noda stated last week that the country’ s policy should be changed in regard to deflation and expensive Yen– currency fluctuation in the long term should stabilize and deflation should retreat. As for the rising price of the Yen- it should not be the sole responsibility of the Bank of Japan as authorities also have leverage over currencies exchange rates.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 15.10.10: AUD: Australian Dollar continues to go up

At the Forex currency market the Australian Dollar rate continues to go up today although indicators are unambiguous on Friday.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD on Friday and it goes up confirming a pair buy signal. Stochastic Oscillator has not formed a clear signal on Friday yet.

Forex recommendations: if the current external background is maintained the pair break down the level of 0.9994 and will go to 1.0040.

Thus our proposition on close parity with the USD remains relevant.

The next RBA meeting will be held on 2 November. We would remind that 2 weeks ago the RBA left the interest rate unchanged while market expected the rate increase to 4.75% - Stevens, the head of the Bank, noted in his comments later that at some moment in the future economy may require higher interest rates. In principle such a clause should contain the AUD’s fall however the currency descending movement deprives buyers of the hope for parity with the USD. Interest rate has been maintained at the current level for half a year already.
The Australian Finance Minister Swan thinks that current growth in the Australian Dollar against the USD is a challenge to the national economy as it can affect the levels of tax collection and create complications in the management of the country’s economy. Agriculture, tourism and manufacturing divisions were indicated as the most vulnerable sectors of economy. “No doubt that the AUD growth will impact on corporate profits while there is also downside risk to earnings” –stressed Swan. According to him global growth outlooks still remain vague as economic growth in the developing countries is anemic and growth prospects in these countries are delusive.
Swan noted earlier that the strength of the Australian Dollar reflects the strength of the national economy and Australia is not going to introduce any restrictions on the growing AUD. Swan says that excellent service of the Australian banking system is obvious- thinks Swan.