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[LF.Anastasia]

Forex Analytics from LiteForex of 09.11.10: JPY: Japanese Yen goes up redeeming losses sustained in pairing with USD

At the Forex currency market the Japanese Yen rate continues growing trend that started earlier.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it goes down, giving a pair sell signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.
Forex recommendations: in case of breakdown at the level of 80.60 the pair will go to 80.40 and 80.00.
The following Japanese data was released today:
– Coincident indicators index in September: 102, as expected
– Bank lending: -2.0% y/y in October, decline has been going on for 11 consecutive month;;
– Overall balance of current account is +24.3% y/y to +Y1.96 trillion in September;
– Economic observers index in October 40.2 in September; the decline continues for the third consecutive month;
Thus, Japan’s economic recovery rate continues to slowdown, at that deceleration is sharp and rapid.
It was noted earlier the Bank of Japan expects that Japanese economy will be back on the path of the moderate growth in 2011 while basic inflation average forecast still amounts to 0.4%. Average forecast of the actual GDP level for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in July. The head of the Bank Shirakawa noted that monetary policy easing will be carried more active than before as the economy proceeds along the course of recovery.
Such prospect seems questionable at the moment, considering the latest statistics and taking into account that deflation continues to progress.
The Bank of Japan maintained interest rate in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan announced purchase of the mortgage investment trusts with the rating not lower than AA.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 09.11.10: AUD: Australian Dollar is still in the range; growth is possible

At the Forex currency market the Australian Dollar rate is traded in the range; it is growing slightly, although at the Asian session the AUD went down together with the market.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it goes down, giving grounds for a pair sell signal. Stochastic Oscillator is in the neutral zone giving a pair buy signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0070 traders’ targets will become the levels of 1.0040 and 1.0000. If it does not happen we will see consolidation in the previous range until a catalyst shows up.
The Australian Ministry of Finance has updated forecast in its own way. Thus, GDP in 2011 is expected to be at the level of 3.5% (growth), in 2012 – 3.75% (unchanged). Net debt will amount to 6.4% by 2012.
At that, new budget deficit will be higher by 41.5 billion AUD in 2010-2011.
As for the unemployment rate – it is expected to be at the level of 4.75% in 2011 and at the level of 4.5% in 2012.
A week earlier the Reserve Bank of Australia decided to raise interest rate to the level of 4.75% per annum against the previous level of 4.5%, which was a surprise to the market. The regulator noted in the comments that country’s economy is vulnerable to external influence and has too little spare capacity. The risks of inflation still remain and it will make sense to proceed with policy tightening more actively.
The catalyst for such decision came also from the outside: according to the International Monetary Fund, the Reserve Bank of Australian shall raise interest rates as the inflation should be chilled out and the outlook risks should be reduced. As the IMF report stated the regulator agreed that if the downside risks will be reduced, the policy of the rates will dictate their growth. IMF believes that the Australian economy looks quite strong due to the demand in iron ore from China. The IMF report also stressed that the AUD rate seems overrated by 5-15%.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 10.11.10: Euro is restoring its positions after yesterday’s downfall

The pair EUR/USD is going up slightly at the Forex currency market on Wednesday morning after the downfall yesterday.

By 10.15 Moscow time the Euro is at 1.3789 against closing session level of 1.3773 yesterday.

Players’ concern yesterday was caused by the news about introduction of restrictions on the foreign investments by a number of countries – earlier China declared about it, then Taiwan. Thus, fixation of profit by the players has received another catalyst, as a result major currency pairs were sold out as well as the world capital markets.

The day is going to be full of new statistics which will be released in the afternoon; data on the US unemployment benefit requests will become known as well as levels of imports and exports prices.

Most likely the pair EUR/USD will be in the range of 1.3720-1.3980 on Wednesday trading session.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 10.11.10: GBP: British Pound is going up slightly; it is advisable however, to stay off the market

At the Forex currency market the British Pound Sterling is regaining partly from yesterday’s downfall, however prospects and investors’ sentiments are not , therefore it is advisable to stay off the market.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it goes down, confirming a previous sell signal for the pair. Stochastic oscillator is not giving a clear signal, being in the oversold zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6020 the pair will go to 1.6070 and further to 1.6100. if there is a breakdown at the level of 1.5960, traders’ targets will be the level of 1.5930, and then 1.5900.

The International Currency Fund believes that the Bank of England should continue to stimulate economy as it seems at the moment that it is necessary to compensate the reduction of the budget expenses. Slow recovery of the banking system in the country is another factor which speaks in benefit of such measure.

Mass media stressed today that a split is taking shape in the Bank of England’s ranks – some Committee representatives do not like that King provides support to the governments’ plans of state expenses reduction. The information is not new in principal, since the Committee members have already expressed their opinion on this matter earlier.

The data, awaited yesterday was as follows: the level of industrial production in the UK rose by 0.4%, which agreed with the forecasts, it was able to support the Pound for some time; however pressure exerted by the external background yesterday was higher.

The housing market continues to weaken in Great Britain – statistics released on Tuesday showed that comparable retail sales BRC increased by 0.8% y/y in October; total retail sales: +2.4% y/y and houses prices balance RICS in October:-49%, the minimum since 2009.

It became known earlier that level of asking prices for houses reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual level of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y). Nationwide economists point that if the trend which has started in the early summer will continue in November and December, the prices will have chances to drop by 1% by the end of the year.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 10.11.10: CHF: The decline of Swiss Franc continues for the fourth consecutive session

Swiss Franc continues to weaken at the Forex currency market on Wednesday; the currency’s decline has been going on for the fourth consecutive day.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it goes up, confirming a previous buy signal for the pair. Stochastic Oscillator is giving a similar signal, being in the overbought zone.

Forex recommendations: if the current external background is maintained and in case of breakdown at the level of 0.9720 the pair will go to 0.9750 and 0.9800.

It became known yesterday that consumer confidence level in Switzerland reduced to 7 in October, as per SECO, against the forecast of 17. In general Franc did not pay much attention to the statistics, because it had been under pressure from the USD amid instability at the global financial markets.

Representative of Swiss National Bank Mr. Jordan noted not once that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to closely monitor the dynamics of the real estate sector. The head of the Swiss National Bank Hildebrand is confident that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.

Member of the board of the Swiss National Bank Mr. Dantin noted earlier that crisis in the developing countries has slowed down and almost finished and economies of Japan and the West are recovering however their recovery is very unstable. In his opinion estimation of the Swiss GDP for September is justified. Dantin noticed that strong Franc and slow pace of the recovery of the world finance system have a negative impact on Switzerland.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 10.11.10: JPY: Yen gives way before Dollar amid uncertainty in Asia

The Japanese Yen rate goes down in pairing with the USD at the Forex currency market in mid-week which was activated not as much by the external background but mostly by the Asian domestic news.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes up, confirming a pair buy signal. Stochastic Oscillator is giving a similar signal today, being in the overbought area.

Forex recommendations: in case of breakdown at the level of 81.90 the pair will go to 82.50 and 82.75.

Weak signals from Asia were plenty today. First, the opinion was expressed that growth in GDP in China will slow down to 9% in QVI or even less and as a whole it will amount to 10.2% per year.

Secondly, Taiwan reported on the possibility of introduction restrictions on the foreign capital, targeted at the “revival” of its own banking sector. China has already mentioned about similar intentions. In principal it will be good if Japan will think about something similar too, because its banking sector is in a difficult situation, while regulators’ efforts are focused on the solution of the deflation problem.

The Bank of Japan maintained interest rate in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan announced the purchase of the mortgage investment trusts with the rating not lower than AA.

It was noted earlier the Bank of Japan expects that Japanese economy will be back on the path of the moderate growth in 2011 while basic inflation average forecast still amounts to 0.4%. Average forecast of the actual GDP level for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in July. The head of the Bank Shirakawa noted that monetary policy easing will be carried more active than before as the economy proceeds along the course of recovery.

Such prospect seems questionable at the moment, considering the latest statistics and taking into account that deflation continues to progress.

Tuesday’s data multidirectional; however negative data prevailed (index of economic observers in October is 40.2 against 41.2 in September, decline continues for the third consecutive month, bank lending is -2.0 y/y in October, the decrease continues for the eleventh consecutive month.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 04.11.10: NZD: New Zealand Dollar is recovering, however no need to rush

At the Forex currency market on Wednesday the New Zealand Dollar rate is recovering from the previous fall.

Forex forecast: MACD indicator for the pair NZD/USD is moving along the signal line, not giving a clear signal. Stochastic Oscillator is giving a pair buy signal, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 0.7830 buyers’ targets will be the levels of 0.7870 and 0.7900.

The Reserve Bank of New Zealand stressed on Wednesday that strong NZD prevents the National economy from becoming more balanced and recent study shows that recovery rate of the domestic economy slows down.

In addition the regulator noted that the New Zealand banking system is in a good shape now while real estate sales have declined which could signal a new downfall in the sector.

The head of the NZNB Mr. Bollard emphasized today that the NZD growth can affect future prospects of the interest rate increase and the New Zealand Dollar rate is a bit overvalued, and for quite a long time.

Monetary politician also expressed his opinion that currency rates in a number of countries are in such state now that they prevent from eliminating unbalance at the currency market. According to him minimization of economic stimulation measures bears risks for the global economy. While the US FR decision to start a new stage of stimulation had a positive effect at the global capital markets, although it put pressure on the currency rates in the developing countries.

Note, that as it became known earlier unemployment rate in New Zealand declined to 6.4% in QIII against the previous level of 6.7% in QII; at the same time the change in the employment rate in QIII amounted to +1% against expectations of +0.5%.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 11.11.10: Euro is recovering moderately; players are waiting for the news from G20

The pair EUR/USD is traded slightly upward at the Forex currency market on Thursday amid new highs of the Yuan, recorded this morning and in advance of the summit G20, where inadmissibility of the currencies devaluation is going to be discussed again.
By 10.50 Moscow time the Euro is at 1.3789 against the closing session level of 1.3783 yesterday.
Summit of the "Big Twenty" will start today in Seoul and it is assumed that representatives of the largest countries will again discuss the issue of currencies devaluation and the impact of these processes on the world economy.
The USD today is under pressure from the Chinese Yuan, which upswings to the highs since 1993 - apparently China tries to demonstrate to the world that they work on their currency revaluation issue in order to avoid collisions with the USA in the future.
Important statistics which can affect trading process is not scheduled for publication today, therefore currencies will move in accordance with the external background, taking into account that the Euro is oversold, for example.
Most likely the pair EUR/USD will not go beyond the range of 1.3700-1.3940 on Thursday trading session.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 11.11.10: GBP: British Pound Sterling continues to grow

At the Forex currency market the British Pound Sterling rate continues its growth, which started yesterday.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, however it goes up, giving a pair buy signal. Stochastic Oscillator is giving a similar signal today, being in the overbought area.
Forex recommendations: in case of breakdown at the level of 1.6175, buyers'
targets will be the levels of 1.6230 and 1.6290.
The UK statistics was not published today; however market still remembers statement made by the Bank of England yesterday, which was very optimistic, proposing that the country's economic recovery will accelerate next year.
However, weakness of the housing market is too apparent on the general background. Statistics, released earlier showed that that comparable retail sales BRC increased by 0.8% y/y in October; total retail sales: +2.4% y/y and houses prices balance RICS in October:-49%, the minimum since 2009. It became known earlier that level of asking prices for houses reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual level of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y).
Nationwide economists point that if the trend which has started in the early summer will continue in November and December, the prices will have chances to drop by 1% by the end of the year.
The International Currency Fund believes that the Bank of England should continue to stimulate economy as it seems at the moment that it is necessary to compensate the reduction of the budget expenses. Slow recovery of the banking system in the country is another factor which speaks in benefit of such measure.
This week statistics was positive for Great Britain as a whole - the UK industrial production increased by 0.4% in September, which agreed with the forecasts and which was able to support the Pound for a while, however pressure exerted by the external background was higher.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 11.11.10: CHF: Swiss Franc continues to regain from losses, prospects nevertheless are obscure

At the Forex currency market on Thursday Swiss Franc rate is going up slightly, following external background, however technical signals are ambiguous.
Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and it goes up, confirming a previous buy signal for the pair. Stochastic Oscillator is giving a pair sell signal, being in the neutral zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9750 the pair will go to 0.9820 and further to 0.9880. If the level of 0.9680 is exceeded, traders' targets will be the levels of 0.9640 and 0.9580.
It became known earlier that consumer confidence level has dropped dramatically to the level of 7 against the previous level of 16. It seems that investors' sentiments are under pressure due to the uncertainty in the employment sector in Switzerland. Uncertainty in the future actions of the local authorities is also growing amid rather pessimistic indicators.
Representative of Swiss National Bank Mr. Jordan noted not once that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to closely monitor the dynamics of the real estate sector.
Note, that interest rate in Switzerland has remained unchanged for 19 months at the level of 0.25% per annum. The head of the Swiss National Bank Hildebrand is confident that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.
We would remind that Dantin noted earlier that crisis in the developing countries has slowed down and almost finished and economies of Japan and the West are recovering however recovery is very unstable. In his opinion estimation of the Swiss GDP for September is justified. Dantin noticed that strong Franc and slow pace of the recovery of the world finance system have a negative impact on Switzerland.