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July 20: economic & forex news This week all the high-yielding assets were benefitting from the prospects of a new quantitative easing in the US and China. The risk-on mood was also supported by the raw materials prices growth and a lack of news from Europe. As a result, US dollar was generally losing to its counterparts. Today, however, the greenback edged higher as the market players were taking profit of the weekend. In addition, investors are preparing for some gloomy data in Europe next week and weaker Australian CPI which may show the slowest annual growth pace since June 1999. The MSCI Asia Pacific Index (MXAP) of shares lost 0.6% today, trimming a weekly gain to 1.4%. In Asia forex trading was quiet. Demand for AUD and NZD vs. the greenback is limited on Friday. USD/CAD has reached a 2-month low, additionally supported by a speculation the Bank of Canada will be the first regulator to raise interest rates. Watch for Canadian CPI data released today at 12:30 GMT. EUR/USD is trading on the downside. German PPI contracted by 0.4% in June (vs. -0.2% m/m expected). All attention on the market will be focused on the Eurogroup meetings. Euro zone officials are to outline the first tranche of Spain’s banks bailout. Spanish 10-year yields stayed yesterday close to the critical level of 7%. Events to watch today: Euro area: Eurogroup meetings Great Britain: public sector net borrowing (consensus: 11.8B; previous: 15.6B) Canada: CPI (consensus: -0.2%; previous: -0.1%); core CPI (consensus: -0.1%; previous: 0.2%) Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

US Jobless claims diappoint US unemployment claims increased by 386K last week, beating a 367K consensus forecast and an unexpectedly low previous increase by 350K. Today’s data raise investor’s doubts on the US labor market rebound. Photo: Reuters

USD/CHF: trading advice from MIG bank It’s been a while since we’ve wrote something about USD/CHF. The pair is moving gently up within rising daily trend. On H1 chart we see a falling wedge formation – an argument for the bullish view on the pair. The pair may rise to 1.0150 and higher. At the same time, there’s still room for correction to 0.9700. Analysts at MIG Bank recommend setting a buy limit at this point targeting 0.9850/1.0150/1.0400 and stopping below 0.9550. Support: 0.9750, 0.9715, and 0.9700. Resistance: 0.9780, 0.9800 and 0.9870. Chart. H4 USD/CHF Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

AUD/USD: technical & fundamental AUD/USD keeps strengthening for a fifth consecutive day on Thursday on the back of the improved risk sentiment and despite the drop of the NAB business confidence in Q2. The pair trades on a 11-week high and above a 200-day MA. On a daily chart we see three strong bullish candles; however, the Aussie’s growth is limited on the upside by a strong resistance at $1.0469 (April maximum). The Australian currency was supported today by the German Bundesbank’s decision to begin adding Australian dollar assets such as government bonds to its foreign reserve holdings before the end of September. It is interesting to note that the demand for the Australian assets has increased over the last year, supporting the currency despite ongoing turmoil in the world economy, lower interest rates and a slide in commodity prices. Resistance: 1.0450 (April 12-13 double top); 1.0469 (April maximum); 1.0500 (psychological); 1.0557 (March 27 maximum) Support: 1.0400 (psychological); 1.0320/28 (July 4-5 maximums); 1.0278 (200-day MA) Chart. Daily AUD/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

USD/JPY: US data in focus USD/JPY hit 6-week minimum at 78.47 during today’s Asian session testing levels below support at 78.60. US currency weakened after the Fed’s Chairman Ben Bernanke said on Wednesday that the central bank may ease policy unless the labor market shows gains. RBS: The market isn’t quite factoring in the QE3, but many see the trend of global central banks providing liquidity unlikely to change. Yen strengthened despite rising risk assets as the Bank of Japan is seen as less dovish than other major central banks. All eyes are no on US data due at 12:30 and 14:00 GMT: weekly jobless claims, existing home sales for June and the Philadelphia Fed business outlook survey for July. RBS: Strong US data will likely prompt dollar-buying, while weak data could increase expectations for a third round of quantitative easing, leaving the trend intact of buying risk assets with the euro and the dollar as global funding currencies. Resistance: 79.00 (previous support), 79.40 (July 13 maximum, July 3 minimum), 79.60 (July 10 maximum), 80.00 (psychologically important level), 80.62 (June minimum), 81.78 (mid-April maximum) and 84.19 (March maximum). Support: 78.60 (June 15 minimum) and 78.00 (the level of potential BOJ intervention). One may try setting small longs on bullish candles (for example, hammer). Chart. Daily USD/JPY Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

NZD/USD: up or down? NZD/USD strengthens for a third consecutive day on Thursday, enjoying the increased demand for the high-yielding assets. The pair trades above the 100- and 200-day MAs. Specialists at HSBC expect NZD/USD to edge higher, driven mostly by growing demand for the Aussie. In their view, the pair is likely to reach $0.8040-0.8060 in a short-term. Analysts at JPMorgan disagree: according to them, NZD/USD is forming a bearish head-and-shoulders pattern on a daily chart. A drop of the kiwi below the $0.7840/70 support area may confirm a deeper corrective phase after an uptrend in June, causing the pair to weaken further. A decline to $0.7640 would become likely. Chart. Daily NZD/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

EUR/NZD: a downtrend may continue EUR/NZD has been trading sideways in a NZ$1.5507-1.5324 range for most of July as the euro’s bearish movement slowed down. The pair remains in a downward channel since May. As can be seen from a daily chart, the 55-, 100-, and 200-period MAs are heading down. EUR/NZD, therefore, is just waiting for new signals from the euro area to continue a decline. Analysts at JPMorgan Chase believe concerns the euro bloc’s debt crisis is worsening could push the pair to NZ$1.51, beating the NZ$1.5324 record it reached on July 16. Chart. Daily EUR/NZD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

Key options expiring today Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT). Here are the key options expiring today: EUR/USD: $1.2175, $1.2190, $1.2300, $1.2325, $1.2335, $1.2350, $1.2400; USD/JPY: 80.00; AUD/USD: $1.0195, $1.0300; GBP/USD: $1.5500, $1.5700; EUR/GBP: 0.8065. Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

EUR/USD: short-term outlook The single currency got hurt as fears about the euro zone’s future flared up again yesterday after German Chancellor Angela Merkel said that a solution to the bloc’s problems was not yet in sight. German lawmakers vote on a 100-billion euro bailout for Spanish banks (12:00 GMT). In Europe the market’s attention will focus on French and Spanish debt auctions (8:50-9:50 GMT). Spain will try to sell 3 billion euro of 5, 7 and 10-year bonds, while France would sell 8 billion euro in shorter-term debt. The yield on Spanish 10-year bonds was at 6.93% on Wednesday, close to the critical 7% level which is regarded as unsustainable in the long term. EUR/USD seems unable to overcome resistance at $1.2300. The odds are that the single currency will once more try to retest this level, but then fail around $1.2320. Analysts at Commerzbank repeat what they have said earlier this week: EUR/USD won’t be able to overcome resistance at $1.2365/1.2425 (38.2% and 50% Fibonacci retracements of July decline) and will slide to $1.1934 (the symmetrical triangle downside target) and $1.2053 (200-month MA) and $1.1876 (2010 minimum). Support: $1.2275 (intraday support), $.2260 (July 6 minimum/July 13 maximum), $1.2235 (July 10 minimum). Resistance: $1.2297 (today’s maximum), $1.2306 (yesterday’s maximum), $1.2317 (Tuesday’s maximum). Chart. H1 EUR/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

July 19: economic & forex news The MSCI Asia Pacific Index (MXAP) of shares added 1.5% yesterday. JPY rose against all but one of its 16 major peers amid concern no progress will be reached on the euro zone’s crisis, what will increase demand for a safe Japanese currency. USD weakens against the high-yielding currencies such as AUD, NZD and CAD. Mild weakness in the U.S. has been positive for risky currencies as the stimulus becomes more and more likely. Demand for risky assets was also supported as volatility for major currencies slid to the lowest since November 2007. GBP/USD strengthens on Thursday. Yesterday the pound dropped after the minutes of the BoE meeting this month showed the decision to keep its interest rate at a record low 0.5% was unanimous, while 7 members voted in favor of expanding the QE by a further 50 billion pounds. Although US dollar is broadly weakening, the single currency is even weaker. EUR/USD seems unable to overcome resistance at $1.2300. German lawmakers vote on a 100-billion euro bailout for Spanish banks (12:00 GMT). Angela Merkel will likely get the majority needed to for this piece of legislation to pass successfully. The sole euro-related data release is the publication of the region’s current account (08:00 GMT). The market’s attention will focus, though, on French and Spanish debt auctions (8:50-9:50 GMT). Euro is trading at record minimums vs. Aussie and kiwi and at more than 20-year minimums against loonie. In the US, as usual on Thursdays, watch for the jobless claims figures (12:30 GMT). In addition, there are 2 more important releases: existing home sales and Philly Fed manufacturing index (14:00 GMT). The Fed’s Chairman Ben Bernanke told lawmakers on Wednesday that it was "certainly possible" that the central bank could take new steps to support the economic recovery if the situation at the labor market doesn’t improve. Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask them in comments to this article!

GBP/USD: down on BoE minutes The bulls were pushing GBP/USD up for three consecutive days and the sterling nearly managed to overcome the resistance of the downward trend, existing since June. However, the pair returned to the channel today on the back of the important UK data releases and now trades close to the strong $1.5600 level. The BoE meeting minutes held on July 4-5 revealed the MPC voted unanimously in favor of maintaining the interest rate at 0.5%, while 7 members voted in favor of expanding the QE by a further £50 billion. According to analysts at ING, the increased support for additional QE means that it will possibly be expanded to £450 billion by the end of 2012. A new QE round is expected to weigh on the British currency. The unemployment rate in Britain unexpectedly declined to 8.1%. Commerzbank specialists expect GBP/USD’s growth to be limited on the upside by 55- and 200-day MA’s ($1.5685 and $1.5751). They forecast the pair to decline towards the $1.5407/1.5393 support area (June 8 and July 12 minimum). The next support lies at $1.5270/35 (2012 minimums). Chart. Daily GBP/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

USD/CAD: bullish views of the banks Technical analysts at Commerzbank believe that the greenback may bounce up versus its Canadian counterpart after the retracement to 1.0123/1.0085 (50% Fib of April-to-June rise, the 200-day MA) is over. The specialists think that USD/CAD’s advance may resume after correction in June and July. In the medium term the bullish outlook will be confirmed when the pair rises above 1.0362 (June maximum). In this case the longer-term targets will be 1.0523 (November maximum) and 1.0575 (200-week MA). Chart. Daily USD/CAD Analysts at MIG Bank point out that USD/CAD is holding above the key support of 1.0100 (close to 200-day MA) and even if US dollar dips below this level, it will be only a short-term move. In this case the bank recommends buying USD at 1.0050. According to MIG, the medium term outlook for the pair will change from bullish to neutral only if it slides below 0.9800. Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

EUR/USD: comments & technical levels The single currency had dropped from the levels in the $1.2270/2300 area to the day’s minimums around $1.2330. Euro fell on a media report that quoted German Chancellor Angela Merkel as saying she could not be sure the European project would work. The markets are turning risk-off. In addition, EUR finds itself under pressure after yesterday’s testimony of Ben Bernanke who refrained from discussing specific stimulus measures. The majority of the economists believe that today’s speech of the Fed’s Chairman will be quite similar to what we’ve heard on Tuesday. Support: $1.2188 (July 17 minimum), $1.2175 (July 16 minimum), $1.2163 (July 13 minimum) and 1.2151 (June 29, 2010, minimum). Resistance: $1.2317 (July 17 maximum), $1.2334 (July 10 maximum), $1.2365 (July 5 minimum) and $1.2400 (July 6 maximum). Bank of Tokyo-Mitsubishi UFJ: EUR/USD may slide to $1.2050 during a week from now as the hopes for more easing from the Fed will be gradually weakening. Resistance lies at $1.2450. Chart. H1 EUR/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

EUR/GBP: technical comments EUR/GBP has been trading in a downward channel since July 2011 and is likely to continue the decline. As can be seen from the daily chart, 55-, 100- and 200-period MAs are heading down. Analysts at Westpac recommend going short on EUR/GBP at current levels, setting a stop at $0.8025 and a target at $0.7650. According to specialists, euro zone’s problems will remain a cloud over the market for weeks and, therefore, will weigh on the single currency. Chart. Weekly EUR/GBP Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

NZD/USD: technical comments NZD/USD fell to $0.7930 on Tuesday right after the Fed’s Chairman Ben Bernanke refrained from indicating if the regulator is considering new monetary measures, but then bounced back. On Wednesday the pair continues a downward movement and trades below a 200-day MA. Today’s Bernanke’s speech is unlikely to have a strong influence on the pair. NZD/USD traded in an upward channel, but left it in late June and has been moving sideways since then. According to specialists at Westpac, NZD/USD is likely to trade higher towards a new $0.8005/75 range in a short term, as the market starts to price in a new round of money printing by the Fed. Some analysts, however, believe the kiwi is strongly overvalued. Analysts at Commerzbank, for example, expect the pair to drop to $0.7800 (55-day MA) in the forthcoming weeks. They will remain bearish until NZD/USD breaks above $0.8316 (April maximum). Chart. H4 NZD/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

UBS: comments on forex majors EUR/USD: Euro won’t be able to sustain gains. The single currency will soon come under renewed negative pressure. As long as EUR/USD is trading under the key resistance of $1.2365, it’s vulnerable for a decline to $1.2163. GBP/USD: Resistance is at $1.5722, while support is found at $1.5554. USD/JPY: If the pair drops below 78.61, it will risk sliding to 77.99 ahead of 77.66. Resistance is at 79.39 and 80.10. USD/CHF: resistance is at 0.9873. Above this level the greenback will head to 0.9951. Support lies at 0.9686. Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

AUD/USD: technical comments AUD/USD trades on a downside on Wednesday, but remains above $1.0300 and the 200-day MA as currency markets are waiting for the US Beige Book release. Will the US economic conditions give a hint on a necessity of a new QE round? Yesterday the Aussie plummeted right after Ben Bernanke’s testimony in the US Congress, but then rebounded and overcame the $1.0300 mark. The pair trades in an upward channel since early June. According to analysts at NAB, the Australian currency remains extremely sensitive to changes in risk appetite even despite the positive domestic signals. In their view, AUD/USD will move on a downside as the euro zone’s crisis is far from resolution, US growth remains sluggish and China raises concerns. Resistance: 1.0318/20 (yesterday’s and July 4 maximum), 1.0328 (July 5 maximum), 1.0370, 1.0469 (April maximum). Support: 1.0300 (psychological), 1.0277 (200-day MA), 1.0260 (78.6% Fib. retracement), 1.0215 (100-day MA), 1.0200 (psychological), 1.0155 (July 9 minimum). Chart. Daily AUD/USD Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

Citigroup: bullish on JPY vs. EUR and USD Technical analysts at Citigroup claim that EUR/JPY may decline to the minimal levels since 2000. The specialists claim that if euro falls below 95.50 (level close to June 1 minimum), it will slide to 92 yen. On the Ichimoku chart the pair dropped below conversion and base lines which formed the “dead cross” below the Cloud – a bearish signal. As for the fundamental factors, they are also in favor of Japanese currency: persistent risk-off sentiment and no additional easing announced by the BOJ last week. As for USD/JPY, it may decline to 77.66 if it breaches the 78.61 level. Chart. Daily EUR/JPY

Key options expiring today Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT). Here are the key options expiring today: EUR/USD: $1.2200, $1.2250, $1.2300, $1.2400 GBP/USD: $1.5425 EUR/GBP: 0.7865 USD/CHF: 0.9900 AUD/USD: $1.0200 Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

July 18: economic & forex news There are 2 main blocs of data today: releases in the UK at 8:30 GMT (Claimant count change, MPC meeting minutes, unemployment rate) and in the US and Canada at 12:30 GMT (US building permits, housing starts and the Beige Book and BOC monetary policy report and press conference). The Beige Book survey of business conditions in 12 American districts is the most important publication as it will be closely studied for the signs of the deteriorating economic conditions in the US. The Fed’s Chairman Ben Bernanke will once again appear in front of US Congress later today. Investors generally think that US economy will need more easing. Analysts widely believe that QE3 will become more than likely in case of strong downside surprise to growth or the lingering softness in US labor market. Such attitude of the market is negative for the greenback. Demand for euro was limited before Germany’s lower-house lawmakers vote tomorrow on aid to recapitalize Spanish banks. Angela Merkel will likely get the majority needed to for this piece of legislation to pass successfully. EUR/USD briefly tested the levels above $1.2300, but didn’t manage to hold there. The Bank of Japan released minutes from its June 14-15 meeting. The policymakers agreed to monitor effect of asset-purchase program. Some of them warned that CPI main be flat longer than expected. USD/JPY is consolidating above 79 yen (H1). AUD/USD returned to July maximums around $1.0300 helped by better than expected Australia Westpac May leading index. Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article!

USD/CAD: BOC left rates unchanged As it was expected, the Bank of Canada left rates unchanged at 1%. In its statement the central bank pointed out that financial conditions have deteriorated since April. At the same time, the policymakers believe that domestic economy will keep feeling well enough. GDP growth forecasts for 2012 and 2012 were revised down in comparison with April estimated – from both 2.4% to 2.1% and 2.3% respectively. All in all, the BOC maintained its hawkish tone, signaling potential rate hikes even though it acknowledged gloomy external factors. TD Securities: “The bias is still clearly towards tightening, but it’s a very weak tightening bias. USD/CAD is still stuck around 1.0140.” BBH: “The 1.0100 area is the lower end of the recent range and a convincing break may spur a move towards parity.” Support: 1.0130, 1.0115 and 1.0100; Resistance: 1.0160, 1.0200 and 1.0250. Chart. Daily USD/CAD

EUR/USD: ZEW, Fed, technical levels German ZEW economic sentiment index came at -19.6 in July from -16.9 in June. Negative figures were pretty much expected. Reuter’s median forecast was of -20.0. The index for the euro area was at -22.3 from -20.1 last month. EUR/USD slightly retreated from today’s peak at $1.2317. The market’s awaiting Ben Bernanke’s Congressional testimony later today/tomorrow. There’s the speculation that the Fed may cut deposit rate like the ECB did. Technical analysts at Commerzbank claim that EUR/USD won’t be able to overcome resistance at $1.2365/1.2425 (38.2% and 50% Fibonacci retracements of July decline) and will slide to $1.2053 (200-month MA) and $1.1876 (2010 minimum). Chart. Daily EUR/USD

CFTC trader positioning data part 2 • The net short Swiss franc positions declined to17.5K contracts following 19K net short contracts the previous week. • The net long Canadian dollar positions contracted to 4.3K contracts following 8.7K net long contracts the previous week. • The net long Australian dollar positions rose to 19K contracts after rising to 9.3K net long contracts the previous week. • The net long New Zealand dollar positions increased to 5.6K contracts following a total of 4.3K net long contracts the previous week. It’s necessary to note that the figures cited above are always a week old at the time of their release. Never the less, CFTC data gives a good oversight into how the market is positioned and if/how these positions are being unwound. Although the CME speculators represent a small fraction of trading in the currency markets, their trades are widely seen as typical of hedge fund investors' currency movements. Have a profitable trade with FBS! If you have any questions to our analysts, you're welcome to ask or comments for this article! The archive of market news and analytics is available here.

CFTC trader positioning data The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that: • The US dollar long positions increased to $24.58 billion on July 10 from a total long position of $23.58 billion on July 3. • The net short euro positions rose to 166K contracts on July 10 from the previous week’s total of 146K net short contracts on July 3. • The net long yen positions edged higher to 8,9K contracts following a total of 4K net long contracts the previous week. • The net long pound positions fell to 7.6K contracts following 5K net short contracts the previous week.

USD/JPY: technical comments USD/JPY remains within the broad triangle. The pair has been trading important psychological resistance at 80 yen, but then turned lower to 78.70 (support line connecting February and June 4 minimums and June 15-20 minimums) before returning higher to 79 yen. The bulls are now trying to hold above the key 200-day MA. Now resistance lies at 79.40: as long as the greenback’s trading below this level, the outlook for the pair will remain bearish. One may see a bearish channel on H1 chart. Sell on the breach of the 78.70 support. Between these levels, in the recent consolidation zone, the outlook is neutral. Other resistance levels: 80.62 (June maximum), 81.78 (mid-April maximum) and 84.19 (March maximum). As for support, it seems that the Bank of Japan won’t let USD/JPY sing below 78 yen. Comment from Wells Fargo: “Longer-term, we see some moderate yen weakness as global economic and market conditions improve. The recent crossing of the 20-day MA above the 50-day MA suggests a bullish technical bias for USD/JPY”. Chart. Daily USD/JPY