LiteForex's analytics

[LF.Anastasia]

EUR/USD: Euro is being slightly corrected after yesterday’s rise

The pair EUR/USD is traded with slightly downward at the Forex currency market on Thursday morning after a sharp rise yesterday.

By 10.45 Moscow time the Euro is at 1.3124 against closing session level of 1.3132 yesterday.

The reason of active purchase of the Euro was the auction on Portuguese government bonds, and although the country received less funds than they had planned, access to the market of international borrowing was affirmed.

Optimism predominates in the market also due to the conviction of the players in the stable recovery of the U.S. economy the latest released data can serve as an indication of it; the forecast of the statistics which is scheduled for the release this week is also optimistic. Thus, it is assumed that industrial production in the USA increased by 0.5% in December against the growth by 0.4% in November and the rate of retail sales in December was maintained at the level of November.

Most likely the pair EUR/USD will not go beyond the range of 1.3050-1.3190 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound is being technically corrected after the rise in the mid-week

At the Forex currency market the British Pound Sterling rate is being technically corrected today at the Forex currency market after the rise yesterday amid investors’ optimism about the world economic recovery. The GDP rose to the highs of the two months at Forex yesterday.

Forex forecast: MACD indicator is in the negative area for the GBP/USD and continues to go up, confirming a previous buy signal for the pair. Stochastic oscillator is in the overbought zone today and is giving a similar signal.

Forex recommendations: if bullish sentiments for the pair intensify and in case of breakdown at the level of 1.5780, buyers’ targets will be the levels of 1.5830 and 1.5850.

International rating agency Moody's stated today that financial situation in Great Britain as well as in Germany, France and the USA remains stable and is virtually unchanged. This fact confirms the ranking of the countries at the level of AAA.

BRC data released on Wednesday showed that retail prices in Great Britain increased by 2.1% on annual basis in December which was higher than the growth by 2.0% y/y in November. Number of permanent jobs in the UK is growing (54.9 in December against 55.2 in November), however according to KPMG/REC observations, growth rate has reduced. At the same time similar situation is observed in the sector of temporary jobs (52.8 in December against 53.5 in November). According to KPMG/REC findings, the situation in the employment sector in Britain is stable, the growth continues, however the growth rate has slowed down.

According to the representatives of the British Chamber of Commerce sharp increase in demand for exports in the country would not be a sufficient factor to stop slowing down of British economy according to the results of QIV 2010 and QI of 1011. Thus, experts of the Chamber believe that although the rate of production is high, low productivity in the service sector still remains a weak spot of the UK economy.

In general this opinion agrees with the earlier forecast made by various agencies. It is possible that such trend will be continued in QII this year.

 

[LF.Anastasia]

CHF: Swiss Franc rate remains in the previous range

At the Forex currency market Swiss Franc rate goes down on Thursday, however still remaining however in the range of 0.9660-0.9785.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to grow, giving a pair buy signal. Stochastic oscillator has left overbought zone today and is giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9700 the pair will go to 0.9750 and 0.9770. If the level of 0.9660 is exceeded, traders’ targets will be the levels of 0.9610 and 0.9560.

In general the economic situation in Switzerland has not changed significantly.

Unemployment rate in Switzerland increased to 3.8% in December against the forecast of 3.7% and the previous value of 3.6%. It is a negative indication for the Franc at the moment; however attention of the traders is focused on the Eurozone.

It became known earlier that consumer price index in Switzerland remained unchanged on monthly basis in December, demonstrating the rise by 0.5% on annual basis; while analytics had expected the growth by 0.2% m/m and +0.3% y/y. It became known on Friday that Swiss national Bank refused to accept Portuguese state bonds as collateral for the repo transactions –earlier the same action has been taken for Irish securities. Thus, SNB abandoned unnecessary risks, becoming the first regulator who acknowledged big problems of sovereign debts in the peripheral countries of Eurozone.

According to KOF estimates (Swiss institute of research on economic cycles) Swiss Franc will retain the status of a protective asset and a refuge as long as the period of tension will be maintained in Europe.

A report of Credit Suisse AG and Osec which was made public earlier showed that sentiments of Swiss exporters are improving despite the recent highs of the Franc. Companies are confident that demand for the goods of Swiss production will remain high over the next few months, although the threats posed by the expensive CHF are still present.

According to the research, export barometer in QI of this year will amount to 0.6 which is higher than the levels of Q VI 2010. In general the results of the QI of this year are expected to be favourable in the export sector. Companies are taking into account that after the rise of the Franc by 16% last year the demand from the Eurozone will be lower but not critical.

 

[LF.Anastasia]

JPY: Japanese Yen awaits new signals, still being within the range

At the Forex currency market the Japanese Yen rate is going down slightly on Thursday, remaining in the range of 82.50-83.68.

Forex forecast: МACD indicator is in the negative area for the pair USD/JPY; however it continues to grow steadily, confirming a previous buy signal for the pair.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 82.80 the pair will go to 82.50 and 82.20. If the level of 83.20 is broken down, buyers’ targets will be the levels of 83.50 and 83.70.

The following Japanese statistics was released today:

– Orders for equipment and machine tools in December:-63.5% y/y against +104.2% in November;

– Net orders in machine building sector in November: -3.0% m/m, +11.6% y/y against the forecast of +1.9% m/m and -1.4% m/m, +7.0% y/y in October.

According to statistics number of orders in machine -building sector fell again for the third consecutive month, due to the obscure outlooks for the future; companies are not in a hurry to increase the level of expenditures on rates and equipment. High level of Yan can become a constraint in this case.

Statistics can make economists feel worry: if effects from the previous incentives of the government will fade away just as fast then the economic recovery process will slow down be even more intensive.

Interest rate of the Bank of Japan is at the minimal level of 0.1% per annum. The next meeting of the Bank of Japan is scheduled for 26 January. Subsequent meetings of the Regulator will be held on 18 February, 16 March, 8 April, 23 May, 15 June, 16 August, 15 September, 14 October, 14 November, 13 December.

Today, on 13 January the meeting of the Democratic Party of Japan (DPJ) will be held, which can also have a short term impact on the pair USD/JPY.

 

[LF.Anastasia]

AUD: Australian Dollar determines movement direction

At the Forex currency market the Australian Dollar rate stands still on Thursday, determining movement direction after intensiveswinging into both directions.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and goes down giving a pair sell signal. Stochastic Oscillator is giving a pair buy signal, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: if the level of 0.9960 is exceeded the pair will go to the parity level of 1.0000 and 1.0040. If the level of 0.9930 is broken down, traders’ targets will become the levels of 0.9900 and 0.9880.

The following Australian data was released today:

– Unemployment rate in December: 5.0% against 5.2% in November;

– Employment rate in December:: +2 300, to 11.417 million.

It is worth noting that number of newly created jobs was less than analytics had expected. Meanwhile unemployment rate is now at the lows since January, 2009. It is not excluded that in the current realities in Australia many people just refused to look for a job. Thus, market received another confirmation that in QI this year interest rate in Australia will remain unchanged. Interest rate in Australia is at the level of 4.75% per annum. RBA meetings in 2011 are scheduled for: 31 January, 28 February, 4 April, 2 may, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

Meanwhile, natural disaster still remains the main negative factor for Australian economy and Australian Dollar rate. Flooding started in the North East part of Australia and in Queensland and is now threatens to be the largest in the last 50 years. It is obvious now that the flooding is spreading to the South, to the area of Breesban, the third largest city of Australia. 95% of sugar production of Australia is concentrated in Queensland, as well as large amounts of coal. In general, about 20% of the entire economy of the Green Continent is located in the state of Queensland. According to various estimates, the growth of Australian economy can slow down by 0.2% in QI 2011, due to natural disasters.

 

[LF.Anastasia]

CAD: Canadian Dollar is still strong despite correction

At the Forex currency market the Canadian Dollar rate is traded slightly downward at the Forex currency market on Thursday still being close to the local highs.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and continues to slide down, confirming a previous sell signal for the pair. Stochastic oscillator remains in the oversold zone and is not giving a signal.

Forex recommendations: if correctional ascending movement for the pair USD/CAD intensifies and the level of 0.9900 is exceeded, buyers’ targets will be the levels of 0.9930 and 0.9950. More distant correctional target is 0.9975. in this case descending trend is a medium term prospect for the pair.

As for the interest rate in the country Flaherty noted that it will not be low for ever. Interest rate in Canada is at the level of 1% per annum. The last increase which took place in September this year was by +25 basis points. There is an opinion at the market now that the Bank of Canada will not change the interest rate until QII next year as economic recovery rate has slowed down in the country. The rate was increased 3 times in a row in 2010 and at the last meeting of 19 October the regulator decided not to change it again. Schedule of the Bank of Canada meetings for 2011 is as follows: 18 January, 1 March, 12 April, 31 may, 19 July, 7 September, 25 October, 6 December.

Core index of consumer prices in Canada remained unchanged in November after the rise by 0.4% in October, the growth has slowed down to 1.4% on annual basis against the previous level of 1.8%.

Statistics on the employment rate in Canada released at the end of last week has inspired investors. Thus, number of jobs increased for the third time in a row in December, by 22 thousand, following the growth by 15.2 thousand in November. At the same time unemployment rate remained at the same level of 7.6% (forecast was 7.7%) in December which has become the lows since January 2009.

 

[LF.Anastasia]

EUR/USD: Euro continues to grow despite new gloomy forecasts

The pair EUR/USD continues to grow at the Forex currency market on Friday morning; regaining from the negative statement from ICF, investors are purchasing the Euro again amid stable external background and positive statistics from Germany.

By 10.25 Moscow time the Euro is at 1.3385 against closing session level of 1.3364 yesterday.

Yesterday representatives of the International Currency Fund stated that it is too early for Europe to chill out and forget about problems of peripheral countries of Eurozone - regional problems are still remain a burning issue.

It also became known today that the Bank of Ireland may announce new measures to support financial sector of the country during the day – if market will be disappointed with equivalence of support measures, it can become a starting point for correction for the Euro and after that a full- scale sale.

Most likely the pair EUR/USD will be in the range of 1.3270-1.3430 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound Sterling stands still after yesterday’s growth

At the Forex currency market the British Pound Sterling is traded passively after the sharp growth on the surge of investors’ optimism on Thursday.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD however it continues to grow, confirming a pair buy signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal.

Forex recommendations: if investors’ bullish sentiments will be maintained, buyers’ targets will be 1.5850 and 1.5880 today.

It became known today that prices for houses in Great Britain decreased by 0.2% m/m (+2.9% y/y) in December. Real estate market is still weak in the country.

Prime Minister Cameron said that Britain does not intend to join Eurozone, however the country supports reforms of the economic management of Eurozone in every possible way.

BRC data released on Wednesday showed that retail prices in Great Britain increased by 2.1% on annual basis in December which was higher than the growth by 2.0% y/y in November. Number of permanent jobs in the UK is growing (54.9 in December against 55.2 in November), however according to KPMG/REC observations, growth rate has reduced. At the same time similar situation is observed in the sector of temporary jobs (52.8 in December against 53.5 in November). According to KPMG/REC findings, the situation in the employment sector in Britain is stable, the growth continues, however the growth rate has slowed down.

According to the representatives of the British Chamber of Commerce sharp increase in demand for exports in the country would not be a sufficient factor to stop slowing down of British economy according to the results of QIV 2010 and QI of 1011. Thus, experts of the Chamber believe that although the rate of production is high, low productivity in the service sector still remains a weak spot of the UK economy.

International rating agency Moody's stated this week that financial situation in Great Britain as well as in Germany, France and the USA remains stable and is virtually unchanged. This fact confirms the ranking of the countries at the level of AAA.

It is worth noting that at the meeting of the bank of England yesterday interest rate was maintained at the previous level of 0.5% per annum.

 

[LF.Anastasia]

CHF: Swiss Franc resumed growth

At the Forex currency market Swiss Franc rate continues the growth which started yesterday.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and continues to go up, confirming a previous buy signal for the pair. Stochastic oscillator is giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9675 the pair will go to 0.9710 and 09750. If the level of 0.9610 is exceeded, traders’ targets will be the levels of 0.9550 and 0.9510.

A report of Credit Suisse AG and Osec which was made public this week showed that sentiment of Swiss exporters is improving despite the recent highs of the Franc. Companies are confident that demand for the goods of Swiss production will remain high over the next few months, although the threats posed by the expensive CHF are still present. According to the research, export barometer in QI of this year will amount to 0.6 which is higher than the levels of Q VI 2010. In general the results of the QI of this year are expected to be favourable in the export sector. Companies are taking into account that after the rise of the Franc by 16% last year the demand from the Eurozone will be lower but not critical.

It became known earlier that consumer price index in Switzerland remained unchanged on monthly basis in December, demonstrating the rise by 0.5% on annual basis; while analytics had expected the growth by 0.2% m/m and +0.3% y/y. It became known on Friday that Swiss national Bank refused to accept Portuguese state bonds as collateral for the repo transactions –earlier the same action has been taken for Irish securities. Thus, SNB abandoned unnecessary risks, becoming the first regulator who acknowledged big problems of sovereign debts in the peripheral countries of Eurozone.

Unemployment rate in Switzerland increased to 3.8% in December against the forecast of 3.7% and the previous value of 3.6%. It is a negative indication for the Franc at the moment; however attention of the traders is focused on the Eurozone.

In general, practice of the past few days shows that Franc again tends to reach the highs in pairing with the USD.

 

[LF.Anastasia]

JPY: Japanese Yen continues to grow for the third consecutive day

The Japanese Yen rate continues to grow for the third consecutive day at the Forex currency market.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, however continues to go up, giving a pair buy signal. Stochastic oscillator continues to give a n antipodal signal on Friday being in the neutral zone and trying to reach oversold zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of break down at the level of 82.40 traders’ targets will be the levels of 82.00 and 81.80. If breakdown will not take place, the pair will continue to consolidate close to the current levels.

This morning, Prime Minister of Japan Khan presented a new Cabinet of Ministers; the old government had resigned.

Thus, Yoshihiko Noda will become Finance Minister again, Kaoru Yosano will take the post of Minister of Economic and Fiscal Policy and Barney Qaeda will be Minister of Trade.

In general the decision was expected and it did not significantly affect the Yen.

It is worth noting that diffuse index of consumer sentiment which was made public today reached the level of -51.7 in December; while is September it was -42.1. Thus, index shows that economic sentiment continues to deteriorate for the second consecutive quarter. It seems that the country expects no good for at least the next three months.

Interest rate of the Bank of Japan is at the minimal level of 0.1% per annum. The next meeting of the Bank of Japan is scheduled for 26 January. Subsequent meetings of the Regulator will be held on 18 February, 16 March, 8 April, 23 May, 15 June, 16 August, 15 September, 14 October, 14 November, 13 December.

It became known earlier that number of orders in machine -building sector fell again for the third consecutive month, due to the obscure outlooks for the future; companies are not in a hurry to increase the level of expenditures on rates and equipment. High level of Yan can become a constraint in this case.