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NZD: New Zealand Dollar continues to tend downward

The New Zealand rate continues to be traded downward at the Forex currency market on Thursday after the release of weak statistics this morning.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, however continues to move along the signal line, preventing from forming a clear signal. Stochastic Oscillator is giving a pair sell signal, being in the neutral zone.

Forex recommendations: in current investors’ sentiment will be maintained, traders’ targets will become the levels of 0.7670 and 0.7635.

As it became known today, unemployment rate in New Zealand rose to 6.8% in QIV, 2010 against the previous level of 6.4% in QIII while economists expected the growth of 6.5%.

At the same time employment rate of the population in New Zealand fell by 0.5% in QIV (-11 thousand jobs) against the forecast of growth by 0.2%.

Thus, sales of the NZD are well-founded: the recent weak statistics constitute a serious threat to the unsteady recovering process of the New Zealand economy which started to gain momentum in QIII. It seems that companies in New Zealand do not trust the optimism of the government and do not rush to expand staff.

We would remind that at the meeting which was held at the end of January, the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased over the next two years.

However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

 

[LF.Anastasia]

EUR/USD: Euro is stable after yesterday’s fall

Trade is stable for the pair EUR/USD at the Forex currency market on Friday morning, as it determines movement direction after the massive sales yesterday.

By 9.47 Moscow time the Euro is at 1.3632 against closing session level of 1.3633 on Thursday.

The meeting of the European Central Bank was held yesterday, where it was decided to leave interest rate at the level of 1% per annum as expected. However, sales took off for the Euro, when investors felt that in the coming months the regulator will not come back to the issue of monetary policy tightening.

Therefore the Euro has subsided in the end of the week.

The day is going to be eventful today: firstly, the EU summit will start in Brussels where practical solutions on finding the way out of the crisis in the peripheral countries of Eurozone are expected to be made. For the Euro any statements would be a risk factor, taking into account that it is the end of the week, when traders usually lock in profits

The U.S. statistics on a number of jobs for January will be released tonight; according to preliminary estimates it will be ambiguous.

Most likely the pair EUR/USD will be in the range of1.3600-1.3770 on Friday trading session.

 

[LF.Anastasia]

GBP: British Pound Sterling resumed its growth after the fall on Thursday

At the Forex currency market the British Pound Rate is traded upward on Friday, regaining from yesterday’s sales.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it goes up, confirming a previous buy signal for the pair. Stochastic Oscillator is in the overbought zone, confirming this signal, however, not ruling out a reversal trend.

Forex recommendations: if investors’ current sentiment will be maintained, buyers’ targets today will be the levels of 1.6175 and 1.6200. If sales will start for the pair, bears’ target will become the level of1.6060.

The UK statistics released today showed that houses prices Halifax increased by 0.8% m/m (-2.4% y/y). Market responded to the news favourably.

Note that study of the National Institute of Economic and Social Researches “NIESR” agrees with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, with the main target to control the growth of consumer prices.

It is also expected that the rate will be raised to the level of 1.75% until the end of 2011 from the current values. The NIESR has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

Earlier NIESR has already made not too rosy forecasts. Thus, the Institute recommended the UK government to postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.

Note that the pair GBP/USD has been in the narrow range at Forex for three days already.

 

[LF.Anastasia]

CHF: Swiss Franc continues to move away from the highs

Swiss Franc rate continues to weaken at the Forex currency market on Friday, giving way to the USD.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF, however is continues to go down, indicating sale. Stochastic Oscillator, however, is giving a pair buy signal, being in the neutral zone and rushing to the overbought line.

Forex recommendations: taking into account current sentiment in the market we can expect that bullish sentiment for the pair will intensify and then buyers’ target today will become the levels of 0.9540 and 0.9630.

According to statistics released yesterday, levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus ( supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).

Note that SECO, the Department of Economic Policy in Switzerland believes that this year GDP growth will drop to 1.5% while in 2010 it amounted to 2.7%. The department will release a new forecast on 17 March.

Meanwhile, situation in Swiss economy is far from being optimistic. Swiss data released earlier was negative: (Retail sales in December: -0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January: 60.5 against 61.2 for the previous period).

In addition, indicators of last week showed ongoing pressure on Swiss economy: leading indicator according to the Research Institute KOF fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05)

Therefore, the pace of economic recovery in the country has obviously slowed down and the guilt for it is laid on Swiss Franc too.

We would remind that Swiss monetary authorities gave to understand earlier that expensive Franc bears danger. Thus, chief economist of the government Aimo Brunetti noted on Wednesday that ongoing growth of CHF will have a negative impact on Swiss economy, affecting adversely the growth of economic system. At the same time, according to him there is no actual evidence of slowdown in Swiss economy so far.

 

[LF.Anastasia]

JPY: Japanese Yen gained support at the level of 81.30

The Japanese Yen rate continues to be corrected against the Dollar at the Forex currency market on Tuesday, after it has reached important level of support at 81.30.

Forex forecast: Ichimiku indicator demonstrates existence of a long term downward trend, quotes for the pair is below the “Cloud Ichimiku”, showing that sale prevails in the pair, which has been observed since the end of summer last year. A significant resistance level goes through losses zone of the fast sliding average at 82.70. Sliding averages are in the power of “bears”.

Graphical analysis of the currency pair revealed presence of the converging wedge shape (triangle); the exit from which is hold back by the level of 81.30 at the bottom and by the level of 83.00at the top.

Forex recommendations: if correctional sentiment for the pair will be maintained, the pair will go to the level of 82.70. Stop on Long is recommended at the level of 81.20, below the key level of support at 81.30. Potential for the downward movement is at the lows of last year, at 80.25.

Weak dynamics of the rate Dollar/Yen is explained by the celebration of the New Year in accordance with Chinese calendar both in China, and in Singapore. Of all the expected events of 4 February we would highlight publication of the review on the state of the U.S labor market in January.

 

[LF.Anastasia]

AUD: Australian Dollar seeks for the level of 1.0225

At the Forex currency market the Australian Dollar rate continues ascending movement, in order to test the previous high at 1.0225.

Forex forecast: FORCE indicator is in the positive area for the pair AUD/USD, while narrowing of the spread with the signal line is being observed, thereby forming the divergence of the purchase. Stochastic Oscillator has reached overbought zone, indicating the final stage of growth in the current momentum. We expect the wave of lock in profit on Longs at the level of 1.0225.

Ichimiku indicator shows that upward trend is taking shape at the daily chart; the key sliding averages are in the bullish intersection and traded upward. Have losses level of support for the key slow indicator is at 1.0000.

Forex recommendations: when the level of 1.0150 is exceeded there won’t be any risk of formation of “double top”. The path to the level of 1.0225 will be open.

Feasible event scenario at Forex: the target of the movement will be the highs of the late December at 1.0225.

Statistics released yesterday gave a new impetus to the AUD which has not been exhausted today as yet. The latest economic data gives hope that economy in Australia will be able to recover fast from devastating flooding which became the largest over the last decades.

 

[LF.Anastasia]

EUR/USD: Euro started the week with recovery

The pair EUR/USD is traded upward at the Forex currency market after the drawdown on Friday.

By 10.20 Moscow time the Euro is at 1.3616 after the closing level at 1.3581 earlier.

Today’s enthusiasm of the players is associated with expectations of an indication from the European Central Bank about the ways to combat rising inflation, as well as anticipation of publications of positive Germany statistics at the beginning of the week.

In addition, after the decline on Thursday and Friday at Forex, the Euro has reached the levels which make it attractive for purchases, sagging below 1.36.

All investors’ attention will be focused on the ECB’s reaction at the beginning of the week; if monetary politicians give to understand that they see real instruments to combat rising prices, the Euro will continue upward movement.

Most likely the pair EUR/USD will not go beyond the range of 1.3580-1.3690 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound Sterling is trying to regain

At the Forex currency market the British Pound Sterling is trying to regain on Monday after the fall last week.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, giving a pair buy 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 1.6150 the pair will go to 1.6230 and 1.6270. If the level of 1.6060 is exeeded, traders’ targets will become the levels of 1.6010 and 1.5950.

It became known on Friday that houses prices in Great Britain fell by 0.7% against the previous growth by 0.8%; therefore, real estate prices continue to drop consistently, in spite of attenuation of the sales pace.

According to the study of RICS, a number of new proposals have also reduced. Thus, there are all grounds for the maintenance of the precarious position in the real estate sector. It is interesting that earlier Halifax released information according to which houses prices in January increased by 0.8% m/m (-2.4% y/y). It is still unclear what criterions different companies apply for their evaluations of the same sector.

Note that study of the National Institute of Economic and Social Researches “NIESR” agrees with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, with the main target to control the growth of consumer prices.

Earlier NIESR has already made not too rosy forecasts. Thus, the Institute recommended the UK government to postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.

We would remind that according to the Institute’s expectations the rate will increase to the level of 1.75% against the current values until the end of 2011. The NIESR has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

 

[LF.Anastasia]

CHF: Swiss Franc stands still

At the Forex currency market Swiss Franc rate stands still at the beginning of the week after the surge of sales earlier.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator remains in the overbought zone on Monday, making it possible to form a reversal signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9575 the pair will go to 0.9625 and 0.9685. I case of a breakdown at the level of 0.9525, traders’ targets will be the levels of 0.9500 and 0.9480.

The situation in Swiss economy has not changed much by this morning. Macro-economic background will be eventful for Switzerland- tomorrow, on Tuesday the data on the unemployment rate for January will be released (decline is expected), on Thursday, inflation data will be made public (forecast: -0.1% m/m).

Statistics of last week looked optimistic: levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).

However the data released before that shows that not everything is that good in the economy: leading indicator according to the Research Institute KOF fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

Note that SECO, the Department of Economic Policy in Switzerland believes that this year GDP growth will drop to 1.5% while in 2010 it amounted to 2.7%. The department will release a new forecast on 17 March.

 

[LF.Anastasia]

JPY: Japanese Yen is traded below resistance level, at 82.50

The Japanese yen rate continues to be corrected against the USD, below the level of 82.500 at the Forex currency market on Tuesday.

Forex forecast: Ichimoku indicator indicates the presence of a long term downward trend, quotes for the currency pair are below “Ichimoku cloud”, showing dominance of sales in the pair, which has been observed since QIII last year. Graphically the pair is trapped inside the formation “converging wedge”/”Triangle”. The lower boundary of the figure is now being held through the level of 81.10 and the upper boundary constrains the growth of quotes at the level of 82.50.

Forex recommendations: if corrective sentiment will be maintained, the pair will go to the level of 82.50. Stop by Longham is recommended at the level of 81.20 – lower than the key support level at 81.30. Potential for the downward movement is at the lows of last year, at 80.25. The growth potential remains at 83.00.

Statistics on the leading indicator index released today showed the growth rate by 0.8 points, to the level of 101.4. The growth rate has been observed for the second consecutive month, which gives a hope for the economic growth in the country in the medium term. Traders reacted with restraint to the positive data, since dynamics of the prices at the raw material market is the most important for the pair, as in case of significant correction we will see that the interest in Yen, as a protective asset, will resume.