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Forex Flash: US inflation rate of 2% likely in the cards – NAB

With FOMC members also expecting - consistent with their longer-term objective - inflation of around 2.0% this equates to a real (i.e. after inflation) interest rate of around 2-2.25% which is around our view; albeit slightly higher. Is a 2% inflation rate going forward reasonable?

According to the NAB Research Team, “There are certainly tail risks of higher inflation given that the Fed is in unchartered waters regarding how to exit from its QE strategy. Upside risks are also implied by the Fed’s aim of holding interest rates low for longer than would normally be the case as the economic recovery strengthens. However, at this stage, the Fed is being backed to hold the line on inflation.”

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Mar 13, 2013

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[OctaFX_Farid]

Forex: USD/CHF in session highs above 0.9500

The cross quickly left behind the key resistance at 0.9500 on Wednesday, boosted by the upbeat data from the US retail sales, trading at the moment in the upper end of today’s range around 0.9525/30

According to I.Spivak, Currency Strategist at DailyFX, “Prices slipped back below the 50% Fibonacci retracement at 0.9496, with negative RSI divergence warning a pullback maybe ahead. Near-term support is at 0.9426, with a break below that targeting 0.9349. Alternatively, a push back above 0.9496 eyes the March 8 high at 0.9551 and the 61.8% retracement at 0.9608”.

As of writing, the pair is up 0.56% at 0.9527 facing the next resistance at 0.9552 (high Mar.8) ahead of 0.9581 (high Sep.7 2012) and then 0.9598 (high Sep.6 2012).

On the downside, a break below 0.9430 (low Mar.13) would bring 0.9420 (MA200d) en route to 0.9410 (low Mar.7).

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Mar 13, 2013

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[OctaFX_Farid]

Forex: USD/CAD settles below 1.0300

Despite the rally witnessed at the beginning of the American session, the dollar failed to break above the 1.0300 level against its Canadian counterpart, and settled within a lower range, where it has spent the last hours in quiet consolidation.

USD/CAD peaked at 1.0294 but lost momentum, although with the subsequent setback being contained by the 1.0270 area, the pair is currently trading around 1.0280/90, still up 0.3% on the day.

As for technical levels, once above 1.0300, USD/CAD could face next resistances at 1.0330 (Mar 7 high) and 1.0345 (2013 high). On the other hand, supports are now seen at 1.0245 (intraday low), 1.0235 (Mar 8 low) and 1.0200 (psychological level).

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Mar 13, 2013

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[OctaFX_Farid]

SNB keeps minimum exchange rate unchanged in March

The Swiss National Bank decided to leave the minimum exchange rate unchanged at CHF 1.20 per euro on Thursday and “will continue to enforce it with the utmost determination,” as it is stated in the official document released after the decision was made known.

The SNB explained that the CHF is still high and its further appreciation would adversely affect the Swiss economy, thus an increase in the currency will not be permitted.

The target range for the three-month Libor rate was also maintained at 0.0–0.25%.

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Mar 14, 2013

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[OctaFX_Farid]

American equity markets rise after upbeat jobless claims

The US Stock market opened higher Thursday as further signs of a recovery across the US labor market were confirmed with better-than-expected data. In particular, Initial Jobless Claims (March 10) came in at only 332K, against expectations of 350K. Moreover, the Producer Price Index (YoY) grew +1.7% in February, in line with consensus projections. Finally, the Producer Price Index ex-Food and Energy yielded a figure of +0.2% in February, matching expectations of +0.2%.

Beginning with the indices and composites, the NASDAQ rose +0.35% as it settles in region of 3256.75, up +11.22 points in these moments. In addition, the S&P 500 is trading in positive territory, operating at 1560.50, ascending +6.05 points or +0.39% at the time of writing. Finally, the Dow Jones has edged higher at the opening, trading in the zone of 14482.30, presently +0.19% after a movement of +27.02 points.

Sectors are all positive currently, however the Energy and Technology sectors have distinguished themselves as main winners thus far, rising +0.59% and +0.51% respectively. In other news, the price of crude has settled below USD $92.67/bbl Thursday.

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Mar 14, 2013

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[OctaFX_Farid]

Forex Flash: US growth expected to accelerate in 2014 – Goldman Sachs

According to the Economics Research Team at Goldman Sachs, “We expect below-trend annual growth of +1.8% in 2013 and an acceleration to +2.9% in 2014. Growth should then remain slightly above that rate in 2015 and 2016. On an annualized sequential basis, we expect a rebound to +2.3% in 2013Q1 and a slowdown to +1.5% and +2% in 2013Q2 and Q3, before a pick-up to +2.5% in the last quarter of the year.”

Looking into 2014 and beyond, we expect above-trend growth at around +3%-3.5%. “Our forecast for near-term weakness but long-term strength is based on competing impulses from the private and public sectors. In Q2 and Q3, we expect the frontloaded ‘sequester’ to be a significant drag on growth, while in the intermediate and long term we see further strength in the private sector, led by the ongoing housing recovery, rising business investment and financial rebalancing in the household sector.” the team adds.

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Mar 14, 2013

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[OctaFX_Farid]

Forex Flash: US growth expected to accelerate in 2014 – Goldman Sachs

FXstreet.com (Barcelona) - In light of the recent run-up in US equities, it bears the question if such an influx in returns is stable or additional growth is possible. Indeed, U.S. economic growth will have to accelerate to “ridiculously strong levels” to justify any advance for the Standard & Poor’s 500 Index (SPX) above the 1,600 level, wrote Jim O’Neill, chairman of Goldman Sachs Asset Management.

After already gaining 9.6% this year, the S&P 500 is trading at 1,563.23, less than 2 points from a record and within 3% of 1,600. According to O’Neill, an estimate of 1,575 for the U.S. equity benchmark this year. The world’s biggest economy is forecast to grow 1.9% in 2013 and 2.7% next year. “In order to justify the S&P above 1,600, we’d have to see growth expectations go to something like 4% and beyond,” O’Neill said in a recent interview. “I don’t see persistent upside from those kind of levels without some more evidence that the economy would be growing by ridiculously strong levels.” The S&P 500, which has more than doubled from its bottom in 2009, will trade in a range between 1,500 and 1,600, O’Neill said, without specifying a time period.

Despite this recent growth, the USD index found itself in retreat after 6 straight weeks of advancement. This in turn has helped hurt most USD crosses as the EUR/USD found itself advancing today at weekly highs at 1.3108 Friday. Additionally, the USD/JPY found itself in a freefall as the pair lost its grip on the 96.00 level and recently settled at 95.51 during US trading.

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Mar 15, 2013

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[OctaFX_Farid]

Forex: EUR/USD closes week with gains & turned positive on monthly chart; Are buyers waking up?

FXstreet.com (San Francisco) - Not so fast! After falling to 2013 lows at 1.2910 on Thursday, the EUR/USD has been trading on recovery mode to reconquer the 1.3000 position and advanced to test the 1.3100. Finally, the EUR/USD closed the week at 1.3070, around 70 pips or 0.75% above the Monday opening price.

It was the first positive week after three negative weeks, and the EUR/USD has turned positive on the monthly chart after the February collapse. "The euro has remained above the $1.30 level for the first time since March 5 and only the second time this month," points BBH analyst Marc Chandler. "The next corrective target is in the $1.3100-30 area."

“The bias here has switched to bullish with the recent break above 1.2990 resistance and my outlook is positive, for a rise through 1.3070, en route to 1.3160 zone”, wrote Deltastock.com analyst Stoyan Mihaylov, pointing to initial support at 1.2980-90 break-out level.

It would be premature to tell that this last price action represents in fact a change in the wider frame, which remains bearish so far. Still there is a long way up to change the current stance in the euro, and of course it must be accompanied by a parallel improvement in the economic fundamentals and a more solid and foreseeable political scenario, in Italy for starters.

Nomura Strategist Saeed Amen thinks that the EUR/USD is holding the bearish outlook in a purely technical picture. Looking at his daily chart, he writes, “RSI has reached levels where, in recent weeks, spot has peaked. Also 20D SMA looks like an important resistance on the topside, which has barely been tested. With bandwidth falling, spot is likely to range. Hence, a retracement lower within the range seems most likely. Our target is 1.2900 (above 200D SMA).”

However, the BTMU states that the EUR/USD keeps neutral bias in the middle term and they see the spot moving between 1.2800 and 1.3150. “Coming so soon after the semi-annual testimony to Congress, we probably won’t have any dramatic change in stance from Bernanke, but nonetheless, it will be a valuable opportunity for the Fed to emphasize that despite some stronger than expected data, the need for monetary stimulus will be continue for some time yet."

According to the FXstreet.com EUR/USD Forecast Poll, the sentiment for the euro is stabilizing in the 1.30 range, with the 1.3079 as 1-week target, 1.3053 as 1-month and 1.3020 as 3-month forecast. In this line, the FXstreet,com contributors positions have majority of buy orders as the Current Trading Positions table showed on Friday

In any event, and although the US job market has picked up, Danske Bank expects "Ben Bernanke to argue that full−on recovery is still some way off – as is any tightening of monetary policy." As Katarzyna Komorowska from FXstreet comments, "February Nonfarm Payrolls figures surprised to the upside and the unemployment rate fell to 7.7%, it's lowest post-crisis level, but still far from the 6.5% objective established by the FOMC, which would allow it to exit the QE program." Therefore, Komorowska concluded, "at the March meeting status quo should be maintained."

The week Ahead

Moving forward to Monday, a second-tier docket in the euro area would be a priori insufficient to trigger a significant move in the cross, as Italy and the EMU would publish their trade balance figures. Across the pond, the only release will be NAHB Housing Market index.

The rest of the week, the FOMC meeting, the BOE minutes and UK budget, the beginning of a new BOJ regime and euro area flash PMIs will catch the market's attention.

Major events:

- Bank of England Minutes

- Fed Interest Rate Decision

- Eurozone Manufacturing PMI

- China HSBC Manufacturing PMI

- US Manufacturing PMI

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Mar 16, 2013

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[OctaFX_Farid]

Forex Flash: The curious case of taxation in Cyprus – Deutsche Bank

FXstreet.com (Barcelona) - Although EU leaders have made it clear that the shock resolution in Cyprus is a one-off it has surely changed the landscape in Europe and now provides a template that will be at least on the table, even as a bargaining chip only, in the years ahead.

According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “The real damage here is going back on the Government's pledge to honor all deposits up to Euro 100k - one that now exists EU wide. It's clear that the Cypriot Government was given the alternative of a chaotic default where arguably much more would have been lost for many.” However, could the authorities not have taxed the uninsured depositors more than the 9.9% and kept those with under 100k whole as opposed to a 6.75% levy?

Earlier reports have suggested that this is one area that might be up for internal negotiations within Cyprus before the banks re-open tomorrow after today's holiday. Indeed, The FT is reporting that deposits over 100k could see an increased rate of 12.5% while smaller deposits would be levied at 3.5% in an effort by President Anastasiades to scrape together a parliamentary majority to approve the bailout. Martin Schulz, head of the European parliament, while agreeing that savers should bear some of the bailout costs, called for changes to exempt those with savings under €25,000.

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Mar 18, 2013

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[OctaFX_Farid]

Forex: EUR/USD at lows after Cyprus PM resignation

FXstreet.com (Barcelona) - After briefly passing by the European session low at 1.2917 and extending the daily low to 1.2912, the market seems to be having the downside fairly limited as it shot up back to 1.2930. Despite trading lower on the day, the market remains pretty sidelined as it looks for more triggers via headlines coming from Cyprus. The latest report says the Cypriot Prime Minister has submitted his resignation, but significant move is being seen at the moment

US Building Permits rose from 0.904M to 0.946M in February, beating consensus of 0.925M. January data was revised lower, from 0.925M. US Housing Starts also improved more than expected, from 0.910M (revised from 0.89M) to 0.917M. Market consensus was at 0.915M.

The ZEW survey for March shows a better image in Germany, better than expected. However, it is also showing a concerning drop in the Eurozone, with economic sentiment falling from 42.4 to 33.4 (consensus of 43.7).

Economic sentiment in Germany rose from 48.2 to 48.5, beating 48.0 consensus. Current situation rose from 5.2 to 13.6, beating 6.0 consensus. EMU construction output fell from -4.6% to -7.3% in January, with a monthly contraction of -1.4%.

Hourly indicators are negatively aligned, with 55 day EMA capping, with 4h studies holding firm bearish tone. Immediate support lies at 1.2900, ahead of strong 1.2875/65, below which to resume slide to-wards 1.2825/00”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to 1.3000 as first re-sistance ahead 1.3106/33, to shift near-term focus higher and confirm base.

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Mar 19, 2013

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[OctaFX_Farid]

Forex: US/German 2 yr int rate differentials continue to indicate USD strength

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the US-German 2-year interest rate differential continues to move in a dollar-supportive direction.

They see that at 23bp today, it is the largest US premium since the start of the year. Further, the gap created by yesterday´s sharply lower opening in the Euro is found between yesterday's high at 1.2970 and Friday´s low at 1.3000.

They feel that this area is important technically and even more so given that it is on the weekly charts. They write, “In contrast, we note the US-Japanese 10-year spread, at 133 bp is near its 10-day low. This would seem to have a more negative dollar factor than is reflected in prices. The dollar filled its gap and more against the yen. It surpassed retracement levels seen from the March 12 high near JPY96.70. We now peg support for the greenback near JPY95.00.”

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Mar 19, 2013

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[OctaFX_Farid]

US: EIA Crude Oil Stocks drop -1.314M in Mar-15 week

FXstreet.com (Barcelona) - In the week ending at March 15, crude oil stocks in the US dropped by -1.314M following a 2.624M rise in the prior month, according to EIA.

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Mar 20, 2013

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[OctaFX_Farid]

Forex Flash: EUR perspective remains bearish – Scotiabank

FXstreet.com (Barcelona) - The bloc currency is extending its correction lower from intraday highs in the vicinity of 1.2980 on Wednesday, as markets are now focusing on the FOMC gathering due later.

There are no real triggers for the price action as rumours were ruling the markets as of late.

“The focus remains on Cyprus, the precedent its bailout potentially sets and the impact of weak political system in times of crisis. The parliamentary vote for the bank levy bail‐in failed to produce even one favourable vote, complicating the outlook for Cyprus even as markets are relieved that guaranteed depositors remain protected”, pointed Camilla Sutton, Strategist at Scotiabank.

“Banks were expected to open tomorrow, but without a negotiated bailout in place, this is likely to be pushed out further. We remain bearish on EUR”, added Sutton.

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Mar 20, 2013

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[OctaFX_Farid]

Fed likely to soldier forth with monetary easing despite reinvigorated Cypriot risk

FXstreet.com (Barcelona) - The Federal Reserve looks primed to continue its USD $85B monthly bond-buying stimulus program, despite the generally improving U.S. economic data as of late. More interestingly for investors is the newest specter of risk, i.e. the bourgeoning situation in Cyprus, in which the euro zone crisis reminds officials of a volatile global environment.

Indeed, as it wraps up a two-day meeting on Wednesday, the U.S. central bank's policy-setting Federal Open Market Committee will continue debating the potential costs and ramifications of quantitative easing, including the acute possibility its easy money policies will actually inflate and propagate asset market bubbles – he S&P and Dow are already at record highs.

However, Fed Chairman Ben Bernanke has reiterated he still firmly believes the benefits are palpable, and the risks worth taking. "The only change in the Fed statement we expect is a nod to the economy being better than what the FOMC saw six weeks ago," noted Steve Blitz, chief economist at ITG. "This nod should only sharpen divisions within the FOMC about whether it's time to give a hint of the potential of a promise for the Fed to begin tailing off asset purchases sometime sooner rather than later," he said.

The Fed will release its policy statement, along with a new set of economic projections, at 18:00 GMT and Bernanke will get a chance to answer reporters' questions at a quarterly news briefing a half hour later.

In particular, one key indicator that bolstered confidence in the U.S. recovery was a February employment report showing a lower jobless rate, down -0.2% at 7.7%, and the creation of 236,000 net new jobs. If that pace of job growth can be sustained for a few months, the Fed might be able to claim substantial progress has been made toward an improved employment outlook - its own stated prerequisite for the cessation of bond buys.

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Mar 20, 2013

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[OctaFX_Farid]

Forex: EUR/USD down on European PMI data, held by 1.2980

FXstreet.com (Barcelona) - The EUR/USD has been falling across the chart since the release of disappointing France Markit PMI figures, with manufacturing PMI at 43.9 vs 44.3 consensus and services PMI at 41.9 vs 44.0 consensus. German data extended the sentiment as manufacturing dropped from 50.3 to 48.9 (consensus of 50.5) and services fell from 54.7 to 51.6 (consensus of 55.0).

The EUR/USD has now been holding around 1.2985/90 (-0.35% on the day), with a touch of 1.2980 on the release of the EMU print: Composite PMI down from 47.9 to 46.5 (consensus of 48.2).

UBS analysts are bearish: “Any upside will be limited as bear trend persists. Resistance at 1.2996 ahead of 1.3107 - which should hold”, wrote analyst Gareth Berry, pointing to support at 1.2844 ahead of 1.2662.

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Mar 21, 2013

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[OctaFX_Farid]

CORRECTION: New BoJ head hopes to reach 2% inflation target in two years

FXstreet.com (Barcelona) - Haruhiko Kuroda held his first press conference as BoJ Governor in Tokyo today, during which he elaborated on the central bank’s prospective monetary policy framework.

The new BoJ chief assured that he would do his utmost to fight deflation and bring Japan’s CPI to the 2% target in two years time. “Bold easing is needed in both quality and quantity,” he insisted. He also said that the BoJ’s governing board would consider early open ended asset purchases.

Haruhiko Kuroda suggested that the yen was still in a corrective phase from an excessive post-crisis appreciation and assured that the BoJ’s monetary policy would not target FX rates, leaving them to the markets as agreed at the G20 meeting in February.

The BoJ governor declined to comment on whether an emergency meeting of the governing board would be held. The USD/JPY hit 95.67 on Kuroda’s speech.

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Mar 21, 2013

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[OctaFX_Farid]

Forex Flash: Equities remain positive during active periods – Goldman Sachs

FXstreet.com (Barcelona) - In thinking about how best to position for macro trends, we have placed a lot of weight on gauging the state of the macro cycle and trying to understand how different states translate into different asset market outcomes. According to the Economics Research Team at Goldman Sachs, “We focus in particular on the parts of the month when ‘key data’ are released, that is, on ‘active’ periods rather than ‘lull’ periods when there is no meaningful mass of new economic information.”

Moreover, “We find that in favorable economic contexts equity returns are positive in active periods (negative in lulls). In negative contexts, returns are negative in active periods (positive in lulls). Bonds and FX markets also show meaningful differences between active and lull returns.” the team adds.

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Mar 21, 2013

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[OctaFX_Farid]

Forex: EUR/USD falls below 1.29, Cyprus fails to get Russian aid

FXstreet.com (Barcelona) - The Euro has fallen from its daily high at 1.2934 to find a new session low in Asia at 1.288, following the news that Cyprus failed to get the financial support from Russia, Cyprus finance minister Mr. Sarris said.

According to Fan Yang, technical analyst at FXTimes, and contributor at FXstreet.com: "At this point, a break above 1.2995-1.30 would form a inverse head and shoulders pattern in the 1H time-frame, and neutralize th bearish outlook in the near-term. A hold below 1.29 would maintain the bearish outlook."

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Mar 22, 2013

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[OctaFX_Farid]

Cyprus deposit levy back on the table

FXstreet.com (Barcelona) - The latest news on the Cyprus bailout negotiations suggest that the proposition to tax bank deposits is back on the table. According to Bloomberg the Eurogroup is considering creating a ‘bad’ bank and a ‘good’ bank to which the deposits from the country’s two largest lenders, Laiki and Bank of Cyprus, would be assigned.

The ‘good’ bank would take in insured deposits below 100.000 euros, which would not be taxed. Uninsured deposits exceeding this amount would go to the ‘bad’ bank and remain frozen until assets were sold. These deposits could sustain losses of up to 40%.

Despite the Cyprus tension, financial markets continued trading rather steady on Friday. TD Securities Rates, FX and Commodities Research team comment: “Equities have been modestly under pressure and peripheral Eurozone spreads are generally neutral. In FX land, looming Cyprus event risk is even less apparent, and the majors are mostly in consolidation mode reflecting the minimal developments overnight. “

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Mar 22, 2013

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[OctaFX_Farid]

Forex Flash: Cyprus stays in key focus - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the real focus remains in Europe and after several days of meeting with Russian officials, Cypriots have come back empty handed.

Additionally, they add that the Germans have made it clear that the Cypriot proposal for a solidarity fund that raids pensions is not acceptable. They write, “That’s after they had backed the Cypriot President's proposal last weekend to tax small depositors. The negotiating style, if one wants to call it that, is not helpful. Not attending meetings and more broadly, not talking to the Troika, has irked Cypriot neighbors.” The team believe that the restructuring of the country's' two largest banks appears to be a step in the right direction, but it does not sufficiently address the problem itself. They add, “The meaning and significance of the S&P downgrade of Cyprus' credit to CCC from CCC+ with a negative outlook escapes us.”

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Mar 22, 2013

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[OctaFX_Farid]

Update: Cyprus approves all 9 bills on bank resolution as 1st step for EU bailout

FXstreet.com (San Francisco) - The Cypriot parliament has approved all 9 bills on the bank resolution required to allow the European Union's bailout. Among others, Cyprus passed solidarity, wealth fund and capital control.

In this line, Cyprus adopts the law that will allow their to split banks in good or bad banks in failing lenders.

The capital control new law will provide government with powers to impose control on banks, create solidarity fund to pool state assets. The parliament will meet on Saturday to vote the deposit-tax levy measure.

Meanwhile, Cypriot president Nicos Anastasiades, and party leaders, will go to Brussels on Saturday with a credible solution. The plan B must be ready for Sunday afternoon to the new eurogroup finance ministers.

According to sources, Cyprus is working to avoid being the “Argentina of the Mediterranean”

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Mar 23, 2013

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Edited March 23, 2013 by OctaFX_Farid

[OctaFX_Farid]

Fundamental Morning Wrap: EUR relief at Cypriot "agreement"

FXstreet.com (Barcelona) - There was only ever going to be one focus for this mornings institutional research: Cyprus. News of the adjusted bailout look to have been more telling of the political power struggles taking place within the Eurozone and the news of the bailout (or agreement, depending on who you follow) has had a limited relieving effect on financial markets so far. The underlying suspicion is that despite the immediate risk being averted, dangerous precedents have been put in place.

EUR

The weekend news was undoubtedly centered on the Cypriot bailout, with Gareth Berry and Geoffrey Yu of UBS noting that the Troika and the Cypriot Government agreeing on key elements and Eurozone FinMins subsequently approving it too. They add that likely Dutch and German Parliaments will have to vote on the measures, but crucially, the Cypriot Government will not as the levy concept has been abandoned completely. Overall, for the Euro, they feel that the bailout is a double edged sword with deposit outflows likely to ensue as soon as banks reopen, but the immediate risk has been averted. However, they feel that political tensions could ensue.

Westpac analysts note that there has been a relief rally for EUR/USD as the threat of Cypriot financial collapse and EUR exit has been avoided. However, they add that the “woefully handled bailout of a tiny EMU member is hardly cause for a sustained rally. The Eurozone economy remains in recession with recovery distant, while the political standoff in Italy (outstanding debt of EUR1.7 trillion) continues.” ING economists cover similar ground, and add that regardless of the bailout it looks very likely that the country’s economy will contract significantly both in 2013 and 2014. Additionally, they flag that Moody’s already stated that even with a deal, Cyprus remain at risk of default. However, they largely see this period as being a power struggle within the Eurozone, rather than financial. They write, “The Cyprus bailout has been an unprecedented power struggle in the euro crisis. While Cyprus tried to call the Eurozone’s bluff, the Eurozone, led by Germany, wanted to make an example that the rescuers do not like to be blackmailed.” They see that Germany gambled that a Cypriot “No” would be more harming for the island, than the Eurozone, but this approach holds much greater risks with larger nations.

Jim Reid of Deutsche Bank notes that according to the Eurogroup, there will be an appropriate downsizing of the financial sector, with the domestic banking sector reaching the EU average by 2018. Further to that, the Cypriot authorities have reaffirmed their commitment to step up efforts in the areas of fiscal consolidation, structural reforms and privatisation. Additionally, he writes, “Reforms include an increase of the withholding tax on capital income and of the corporate income tax rate. There will also be agreement between Cyprus and the Russian Federation on a financial contribution. The IMF estimates that Cyprus debt will be about 100% of GDP by 2020.” Danske Bank analysts comment that the events in Cyprus, further increase the risk of bank runs and capital flight in Greece and Spain in the future and in the event that new renegotiation´s are necessary in the two countries it could provide faster unrest since money can flee the country for fear of loss. Lee Hardman of BTMU notes that the latest IMM report confirmed that recent developments in Cyprus have resulted in a build up in speculative short euro positions which have reached their highest level since late last year.

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Mar 25, 2013

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[OctaFX_Farid]

Forex: NZD/USD testing resistance a 0.8355/60

FXstreet.com (Barcelona) - The NZD/USD rocketed higher Monday, as risk appetite permeated across the markets during European trading. After peaking briefly at the 0.8372 region (session high), the pair has eased slightly back to resistance at the 0.8355 level in these moments. At this point, the cross is recording an advance of +0.21% above its opening.

“Although the NZD/USD is biased to the downside, trading is stable above the downtrend's key resistance – the upper line was breached earlier, therefore, the possibility of the return of the uptrend is quite favorable and as such, stability above the 0.8200 barrier is a positive indication, probably causing a bullish rebound.” notes the ICN.com analyst team.

After barreling through resistance at 0.8310, the ICN.com analysts, additional corrective structures lie ahead 0.8355 onto the 0.8400 barrier. Conversely, supports for the NZD/USD will initiate at 0.8200 onto 0.8155 and finally 0.8135.

Later tonight at 21:45 GMT, investors will learn of several trade figures for the New Zealand economy, including import, export and trade balance statistics.

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Mar 25, 2013

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[OctaFX_Farid]

Forex Flash: GBP: Policymakers deploy parachute - HSBC

FXstreet.com (Barcelona) - HSBC strategists believe that GBP weakness is likely to persist, but policymakers are already working to ensure that the fall lower in GBP does not turn into a nasty dive.

They feel that rhetoric from the BoE regarding currency weakness has recently shifted and the policy parachute has been deployed to slow GBP´s descent. They add that the earlier emphasis on the potential boost to net exports is increasingly overshadowed by warnings against excessive GBP weakness.

They write, “The adverse repercussions for real spending power likely lie at the heart of such disquiet. So a slow move lower in GBP related to UK economic weakness is acceptable to policymakers.”

However, a swift decline driven by expectations of excessively loose policy or lack of commitment to the inflation target would be unacceptable. Overall, they feel that it is to protect against the second point that the policy parachute has been deployed. They finish by commenting that we are now in the environment where GBO will drift lower and weakness from here will be a lot more muted than seen so far this year.

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Mar 25, 2013

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[OctaFX_Farid]

Forex: AUD/USD upside capped at 1.0480

FXstreet.com (Barcelona) - The Aussie dollar is extending its momentum on Tuesday, orbiting around 1.0470 after another failed attempt to break above 1.0480, which acted as a tough barrier for AUD bulls on Monday as well.

“Markets are pricing -18bp from the RBA cash rate by Dec, having toyed with levels around -16bp Monday as risk appetite peaked”, signals Sean Callow, Strategist at Westpac.

At the moment, the pair is up 0.16% at 1.0473

Next resistance levels line up at 1.0555 (high Jan.24) ahead of 1.0560 (hourly high/lows Jan.23) and finally 1.0578 (high Jan.22).

On the downside, a breach of 1.0408 (MA100d) would bring 1.0389 (MA10d) and then 1.0363 (low Mar.21).

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Mar 26, 2013

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