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[LF.Anastasia]

JPY: Japanese Yen continues to be corrected

The Japanese Yan rate continues to move away slowly from the previous local highs in Wednesday; however it is not excluded that amid new wave of riots in the Middle East the demand in JPY as safe currency will be back again.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes down, approaching the signal line and is ready to cross it from top to bottom, confirming a previous sell signal for the pair. Stochastic Oscillator is coming out of the oversold zone today and is forming a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 82.25 the pair will go to 82.50 and 82.80. If the level of 81.80 is broken down, traders’ targets will be the levels of 81.50 and 81.30.

According to the head of the Bank of Japan Mr. Shirakawa the country should keep track of long term consequences which can to some extend affect monetary policy. In addition, the fact that Federal Reserve continues to preserve soft monetary policy has its positive effect on the Japanese economy.

Shirakawa also emphasized that the bank of Japan will promptly respond to inflation risks and if they occur, it will render support to economy.

It became known yesterday that unemployment rate in January remained at the level of 4.9% against 4.9% in December and aggregate employment rate in January demonstrated growth by +170 000 m/m against the revised level of +110 000 in December.

As representative of Japanese government noted yesterday, employment sector in the country continues to recover, however unemployment rate remains static. The head of the Bank of Japan Mr. Shirakawa said in his speech on Tuesday morning that in his opinion current exchange rate of the Yen does not produce additional risks for the economy and business sentiment in the country is stable despite expensive national currency.

Although the levels of industrial production in Japan fell short of expectations (in January: +2.4% m/m (+4.7% y/y) against the forecast of +4.0% m/m), other data has been positive, which proves that the economy has found the way out of recession.

The data released earlier showed deficit of trade balance, which amounted to Y471.4 billion in January against expected level of +Y37.1 billion; although seasonal factor could have been the reason. The level of import prices increased by 1.4% y/y in January against expectations of the rise by 7.4%; the level of import increased by 12.4% y/y (forecast: +8.1% y/y). In addition, the deputy head of the Bank of Japan Mr. Yamaguchi stressed that now high rate of national currency neutralizes the factor of high import prices. In addition, he also drew attention to the fact that there is no need to revise forecasts for economic growth with the account of expensive oil.

 

[LF.Anastasia]

CHF: Swiss Franc is in demand again

At the Forex currency market Swiss Franc rate continues to grow after several days of slight correction from historical highs; demand in safe currencies increases amid resumption of unrest in the countries of the Middle East and North Africa

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to go down, confirming a previous sell signal for the pair. Stochastic oscillator has come out of oversold zone today and is giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9225 the pair will go to 0.9180 and 0.9140. if the level of 0.9300 is exceeded, the pair will go to 0.9330 and 0.9360/70.

On Thursday, 3 March, the data on retail sales for January is going to be made public in the market.

The data released yesterday did not make strong impression on the Franc, although it was very favourable (real GDP in QIV: +0.9% q/q (+3.1% y/y) against the forecast of growth by 0.5% q/q (+2.8% y/y); PMI SVME rose to 63.5 points in February against the forecast of 60.5 points). Therefore, Swiss economy is strong and continues to progress along the recovery path.

Last week’s indicators showed that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

In addition, import prices in Switzerland increased by 9.8% y/y in January; export rose by 15.5% y/y.

It is the factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered stable currency, since the country does not require external borrowings.

It is possible that the Franc will reach its highs again before the end of this week.

 

[LF.Anastasia]

GBP: British Pound is being corrected after two-day rally

At the Forex currency market the British Pound Sterling is being corrected on Wednesday, following upsurge earlier this week

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator remains in the overbought zone today, confirming a previous buy signal for the pair, and nevertheless creating prerequisite for a trend reversal.

Forex recommendations: if bearish sentiment intensifies in the market and in case of breakdown at the level of 1.6190, traders’ targets will be the levels of 1.6150 and 1.6110. If downward breakdown will not take place, the pair will continue to consolidate close to the current levels.

The UK statistics released on Tuesday showed that house prices continued to grow in February: by 0.3% m/m, as per Nationwide estimates. At the same time the index declined by 0.1% on annual basis. According to the experts of the agency, recovery remains weak and real estate sector is in no hurry to grow up.

The Pound has almost not responded to the data released earlier (number of approved mortgage requests in the UK rose to 45.7 thousand in January against the value of 42.7 thousand in December; PMI index in production sector amounted to 61.5 points in February as expected). It is external background that keeps giving directions for the movement.

Last week was eventful in terms of the UK statistics: it became known on Friday that level of consumer confidence in Great Britain rose to -28 points in February, as per GfK/NOP estimates, against the previous value of -29 points. The news was moderately optimistic for the Pound; however it did not save the Pound from sales.

According to CBI which was released earlier, decline in sales volume from 37 points to 6 points is quite logical, as the program of reduction in public expenditure gave its first results. At the same time in the retail sector of the country the sentiments remains the most pessimistic since 2009.

In addition, the level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of growth by 0.2% m/m; net mortgage lending in the UK remained unchanged in January, at the level of STG 1.2 billion.

 

[LF.Anastasia]

EUR/USD: Investors sell Euro under the pressure of external background

The pair EUR/USD is traded downward at the Forex currency market on Wednesday morning due to the resumption of unrest in Libya and maintenance of stable positions of the U.S. FR on monetary policy.

By 10.15 Moscow time the Euro is at 1.3759 against closing session level of 1.3777 yesterday.

Developments in Libya force investors to hedge risks: opposition is preparing for new confrontations with the forces of al-Gaddafi, while Fitch downgraded the rating of Libya by three levels –to BB from BBB. Safe harbors are in demand again.

There are also disturbances in Oman, where military equipment is still on the streets on the cities, and in Yemen as well.

The U.S. Federal Reserve still remains a bastion of stability in turbulent times. Chairman of the Federal Reserve Ben Bernanke said earlier in his speech before the Senate that interest rate will be maintained at the low level for a long time, and this was what market wanted to hear. Monetary politician also dwelled on the issue of current rise in oil prices, explaining that under such catalyst, inflation can begin to strengthen, which will lead to slower economic growth.

In general external background will still remain the major driver today.

Most likely the pair EUR/USD will not go beyond the range of 1.3690-1.3790 at the trading session on Wednesday.

 

[LF.Anastasia]

AUD: Australian Dollar stands still

The Australian Dollar rate stands still at the Forex currency market today, awaiting new signal to determine movement direction. The AUD has already regained from yesterday’s domestic news and is waiting for new drivers now.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is going up a little, giving a pair buy signal. Stochastic Oscillator has come out of the oversold zone today and 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 1.0200 the pair will go to 1.0230 and 1.0250/60. If the level of 1.0135 is briken down, traders’ targets will be the levels of 1.0100 and 1.0080.

It became known earlier that GDP in Australia rose by 0.7% q/q (+2.7% y/y) in QIV against the forecast of +0.6% q/q (+2.8% y/y). Economy was able to strengthen before flooding that struck the Green Continent, which was followed by tropical cyclone.

Finance Minister of Australia Mr. Swan described the rate decision as “good news”, clarifying that echoes of disaster can affect the result of QI, while fundamentals in Australia remains steady. In accordance with the RBA, inflation forecast for this year is in the range of 2-3%.

It became known earlier that the level of total lending in Australia increased in January by 3.3% per annum, as per estimates of the Reserve bank of Australia, against expectations of the rise by 3.2%.

Earlier the head of the Reserve Bank of Australia Glenn Stevens noted that he expected stabilization of national economy, and consequently, interest rate would remain unchanged for some time. He also said that economic growth of Australian economy could be better, than the forecast despite negative impact of the natural disaster that befell the country at the beginning of the year. At the same time Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies.

Worth noting that the level of capital expenditure in private sector of Australia increased by 1.3% on quarterly basis in QIV last year, reaching the level of A$29.691 billion. Thus, in accordance with the forecast, total index of capital expenditures will be at the level of A$128.93 billion in 2010-2011.

The Reserve Bank of Australia decided to keep interest rate unchanged, at the level of 4.75% per annum, which was not a surprise to the market. In the follow-up comments the RBA mentioned that production is still decreasing in the country due to the elimination of the consequences of the disaster, which befell on Australia at the beginning of the year. The rise in lending is also insignificant.

 

[LF.Anastasia]

JPY: Japanese Yen reverted to recovery, still staying in the range

The Japanese Yen rate started to grow at the Forex currency market on Thursday – however the pair USD/JPY still remains in the price channel due to the lack of strong external drivers.

Forex forecast: MACD indicator is in the intersection with the signal line, crossing it from top to bottom and continuing to give 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: in case of breakdown at the level of 82.20 the pair will go to 82.50 and 82.75. If upward breakdown does not take place the pair will continue to consolidate close to the current levels.

It became known earlier that unemployment rate in January remained at the level of 4.9% against 4.9% in December and aggregate employment rate in January demonstrated growth by +170 000 m/m against the revised level of +110 000 in December.

As representative of Japanese government noted the day before yesterday, employment sector in the country continues to recover, however unemployment rate remains static. The head of the Bank of Japan Mr. Shirakawa said in his speech on Tuesday morning that in his opinion current exchange rate of the Yen does not produce additional risks for the economy and business sentiment in the country is stable despite expensive national currency.

Although the levels of industrial production in Japan fell short of expectations (in January: +2.4% m/m (+4.7% y/y) against the forecast of +4.0% m/m), other data has been positive, which proves that the economy has found the way out of recession.

In general the situation in Japanese economy remains almost unchanged.

According to the head of the Bank of Japan Mr. Shirakawa the country should keep track of long term consequences which can to some extend affect monetary policy. In addition, the fact that Federal Reserve continues to preserve soft monetary policy has its positive effect on the Japanese economy.

Shirakawa also emphasized that the Bank of Japan would promptly respond to inflation risks and if they occurred, it would render support to economy.

 

[LF.Anastasia]

CHF: Swiss Franc is being corrected after reaching historical highs once again

At the Forex currency market Swiss Franc rate has reached historical highs once again yesterday, coming up to the level of 0.9201; and it is being slightly corrected today

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continued to go down, confirming a pair sell signal. Stochastic Oscillator has come out of the oversold zone today and is giving a pair buy signal, being in the neutral zone.

Forex recommendations: as a part of the corrective ascending movement, after the breakdown at the level of 0.9275 the pair will go to 0.9330 и 0.9370.

As the data showed today, level of retail sales in Switzerland declined by 2.6% y/y in January against the fall by 0.8% in December. However external background still remains the main driver of the Franc’s movement, as well as possible withdrawal of the players from risks.

It is the factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered a stable currency, since the country does not require external borrowings.

The data released eralier did not make strong impression on the Franc, although it was very favourable (real GDP in QIV: +0.9% q/q (+3.1% y/y) against the forecast of growth by 0.5% q/q (+2.8% y/y); PMI SVME rose to 63.5 points in February against the forecast of 60.5 points). Therefore, Swiss economy is strong and continues to progress along the recovery path.

Indicators of last week showed that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

In general, Franc has all chances to continue to consolidate and test new highs.

 

[LF.Anastasia]

GBP: British Pound Sterling keeps searching drivers

At the Forex currency market the British Pound Sterling is being slightly corrected on Thursday, trying to determine movement direction.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it is moving along the signal line, not giving a clear signal. Stochastic Oscillator is turning round in overbought zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6340 the pair will go to 1.6380 and 1.6440. If the level of 1.6275 is exceeded, traders’ targets will be the levels of 1.6215 and 1.6140.

The UK data released this morning showed that houses prices reduced by 0.2% m/m (-2.7% y/y), in February, as per Hometrack estimates. The Pound did not respond to the statistics, continuing to keep eye on the external background. The UK statistics released on Tuesday demonstrated that houses prices continued to increase in February – by 0.3% m/m, according to Natianwide estimates. At the same time the index reduced by 0.1% on annual basis. According to the experts of the agency, recovery remains weak and real estate sector is in no hurry to grow up.

The fact that different agencies demonstrate various indicators indicates the lack of unified approach to estimation of the real estate market.

Last week was eventful in terms of the UK statistics: it became known on Friday that level of consumer confidence in Great Britain rose to -28 points in February, as per GfK/NOP estimates, against the previous value of -29 points. The news was moderately optimistic for the Pound; however it did not save the Pound from sales.

According to CBI which was released earlier, decline in sales volume from 37 points to 6 points is quite logical, as the program of reduction in public expenditure gave its first results. At the same time in the retail sector of the country the sentiments remains the most pessimistic since 2009.

In addition, the level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of growth by 0.2% m/m; net mortgage lending in the UK remained unchanged in January, at the level of STG 1.2 billion.

External background still remains the main driver of the Pound’s movement.

 

[LF.Anastasia]

EUR/USD: Euro is growing amid investors’ expectations

The pair EUR/USD is traded upward at the Forex currency market on Thursday morning, continuing upsurge which started last night.

By 10.25 Moscow time the Euro is at 1.3869 against closing session level of 1.3864 yesterday.

Investors’ optimism today is based on the old foundation – market expects that in the result of the meeting of the European Central Bank which is scheduled for Thursday, the head of the regulator Mr. Trichet will give allusion on the time when monetary tightening policy will start in Eurozone.

In addition German statistics this morning was very positive: retail sales rose by 1.4% in January against the forecast of increase by 0.5%.

Therefore, the Euro is only by 0.3% below the highs of November, and it has touched the level of 1.3890 yesterday.

Worth noting that in advance of the ECB meeting, players can take wait –and- see policy.

Most likely the pair EUR/USD will not go beyond the range of 1.3780-1.3930 at the trading session on Thursday.

 

[LF.Anastasia]

JPY: Japanese Yen stands still

At the Forex currency market the Japanese Yen rate virtually stands still, moving away from the local highs over the past few sessions.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: In case of breakdown at the level of 82.50, the pair will to 82.80 and 83.00. If the level of 82.20 is broken down, traders’ targets will be the levels of 82.00 and 81.60.

There was no news on Japan today; therefore the currency will take advantage of the external background to large extent.

It became known yesterday that revised volume of industrial production in Japan increased by 1% m/m in November, which has become the first fact of growth rate for 6 months. At the same time capacity utilization rose by 1.6% m/m in November against the previous fall by 2.3% and ratio of stock and supply in November was revised to -8.3% m/m against the growth by 8.4% m/m in October.

Worth noting that the growth of industrial production had been supported by the production of cars (+4.5% in November against prior forecast of growth by 4.4% m/m, which became the first fact of growth for 7 months)

Interest rate of the Bank of Japan is at its lowest level of 0.1% per annum. The next meeting of the Bank of Japan is scheduled for 26 January. Other meetings of the regulator will be held on 16 March, 8 April, 23 May, 15 June, 16 July, 15 September, 14 October, 14 November, 13 December.

According to the quarterly report of the Bank of Japan on the state of regional economies, 7 out of 9 regions downgraded their growth estimates. 7 regions reported slowing down of the economic recovery process (Sakura report). In addition level of industrial production decreased in the regions, while level capital expenditures increased.