Comments and forex-analytics from FBS Brokerage Company

[fallenDC]

JPMorgan: bears on NZD/CAD

 

On Friday NZD/CAD dropped to 0.8030 levels, demonstrating a four-day decline. The cross broke below the 200-day MA and the uptrend line that connects the lows on May 23 and July 25.

 

According to specialists at JPMorgan, after breaking these important support levels NZD/CAD may fall to 0.7981.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/daily_nzdcad_10.08_11-33.gif

 

Chart. Daily NZD/CAD

 

 

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[fallenDC]

Commerzbank: bears on AUD/USD

 

Commerzbank analysts expect AUD/USD to drop to $1.0300 levels (lower boundary of the upward channel and the 200-day MA) after the pair failed to fix above $1.0583 (78.6% Fib of a decline from February). Close above $1.0583 would open way to $1.0670 levels, though it is not expected.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/daily_audusd_10.08_12-24.gif

 

Chart. H4 AUD/USD

 

 

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[fallenDC]

Goldman Sachs: EUR Olympics

 

Well, it’s Friday, so here’s some entertaining stuff from Goldman.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/2012-summer-olympics-rings-euro.png

 

Image from markettraders.com

 

 

In July Goldman Sachs outlined 8 major issues that would determine the fate of euro. Now the bank returned to these problems to assess the progress. The specialists measure the developments by awarding EUR Bull and EUR Bears with… Olympic medals! No medal is given in case the estimate hasn’t changed.

 

1. Spanish Bank Bailout – Silver for EUR Bears.

2. Stabilizing Growth in Greece and Italy – Bronze for EUR Bears.

3. Euro area Banking Union – Bronze for EUE Bulls.

4. Franco-German Vision for a Political/Fiscal Union – Silver for EUR Bulls (with some help from the ECB).

5. Continued Strong BBoP (broad basic balance of payments) Position – Bronze for EUR Bulls.

6. More Fiscal Tightening Outside the Euro area – No Medal.

7. Monetary Policy Differentials – No Medal.

8. A Notable Reduction in EUR Short Positions – No Medal.

 

So, bulls (1 silver, 2 bronzes) outran the bears (1 silver, 1 bronze). According to Goldman, this calculation reflects euro’s dynamics: the currency firstly slid to $1.20 on rising Spanish yields and then started rebounding on the ECB’s comments. Analysts are still bullish on euro in the medium term (they entered long on August 02 at $1.2153 targeting $1.30 and stopping close below $1.18). The bank thinks that “the ECB’s proposal for a conditional SMP would gradually reduce the euro zone risk premium and confirm a temporary bottom in EUR/USD accordingly”.

 

 

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[fallenDC]

Noda sacrifices re-election chances for tax hike

 

The upper house of Japanese parliament approved the increase of the nation’s sales tax. This will be the first sales tax increase since 1997. The change won’t be instantaneous: the tax will be raised to 8% in April 2014 and 10% in October 2015.

 

Prime Minister Yoshihiko Noda has been struggling for about a year to make this piece of legislation pass. During this period, 50 anti-tax lawmakers quitted the ruling Democratic Party of Japan which now has only a slim majority and risks losing in the next election. The lawmakers agreed for the tax increase only in the last minute and to make the deal Noda had to promise the main opposition Liberal Democratic Party to dissolve the lower house “in the near term” in exchange of their support for bill.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/1.jpg

 

Photo from washingtonpost.com

 

 

Also note that there’s one condition necessary for the hike to take place and this clause is… an “economic upturn”! The members of the LDP are good negotiators indeed. As it’s not specified what exactly is to be considered as an “upturn”, lawmakers have different interpretations.

 

One thing is quite clear at this point. There will surely be more debates. The LDP will be calling for an early election and the parliament may get in a gridlock by/in September. Just when the nation has an immense debt problem to solve! Sales tax increase would help to improve the debt outlook in the longer term, but any tax hike it would be a burden for economy. Time to make a choice!

 

 

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[fallenDC]

Nomura: Britain may part from EU

 

According to analysts at Nomura, Japan's biggest bank, Great Britain may leave the European Union entirely or partly as soon as in autumn.

 

As the euro zone’s crisis progresses, the region’s policymakers will have to take steps aimed at making the European integration closer. As a result, UK could lose its power to influence the regional policy and decide to drift from the continental Europe and even quit the European Union – in other words, commit BRIXIT (British Exit).

 

Specialists don’t precise the consequences of discord between the EU and UK, but underline it is bound to raise both economic and political concerns on financial markets. Though analysts think it’s unlikely the UK will hold a referendum on BRIXIT under the current government, Britain’s “euro skeptic” politicians may start being more and more active and even push through a vote.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/elizaveta_2.jpg

 

 

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[fallenDC]

Morgan Stanley: buy EUR vs. GBP and AUD

 

Specialists at Morgan Stanley recommend going short on EUR/GBP at 0.7850, targeting 0.8200 and with a stop at 0.7750. In their view, current downward trend formed because of the high demand for safe currencies. However, specialists expect the financial flows to reverse as ECB will aggressively support peripheral debt markets.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/daily_eurgbp_10.08_17-55.gif

 

 

Chart. Daily EUR/GBP

 

Moreover, experts recommend buying EUR/AUD at 1.1450, targeting 1.3000 and with a stop at 1.1300 for the same reasons.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/10_08_12/daily_euraud_10.08_17-56_(1).gif

 

Chart. Daily EUR/AUD

 

 

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[fallenDC]

August 13: forex news

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/utro_eng.jpg

 

According to the preliminary data, Japanese GDP added only 0.3% q/q in Q2 (cons.: +0.6%, prev.: +1.2%). Annualized economic growth declined from 5.5% in the first 3 months of the year to 1.4% last quarter. Weaker exports and consumer spending are probably to be blamed for this disappointment. USD/JPY is trading on the upside, though still below 78.30 after initial increase to 78.36.

 

Asian stocks are exhibiting a mixed trend on Monday: some of the region’s markets opened in red, but regained a bit of lost ground as the session progressed. Investors are cautious due to the mounting evidence of economic slowdown, but still await fresh stimulus from the central banks of the United States, Europe and China. Aussie and kiwi are little changed.

 

EUR/USD was supported in the $1.2260 area (former downtrend resistance, the recent uptrend support line and 100-period MA on H4 chart). However, demand for euro is limited ahead of German and French GDP figures released tomorrow – economists expect slowdown and contraction respectively.

 

US dollar is likely to outperform amid such expectations. No major data releases are scheduled during the European session.

 

 

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[fallenDC]

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, $1.2400;

 

USD/JPY: 77.00, 78.00, 78.50, 78.70;

 

AUD/USD: 1.0250;

 

EUR/GBP: 0.7790;

 

EUR/AUD 1.1600.

 

 

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[fallenDC]

CFTC traders positioning data

 

The latest Commitments of Traders (COT) report, released on Friday, August 10, by the Commodity Futures Trading Commission (CFTC), showed that on a week ended August 7.

 

Speculators reduced EUR net short positions by 4.5% ($1 billion) from the week before to $20.4 billion. After positioning reached extreme short levels in June, EUR has seen a decline in net shorts for the past 4 consecutive weeks. GBP shorts are building up. AUD’s positioning saw the largest change ($1.7 billion) as net longs keep increasing. Positions are at net long territory already for 6 weeks in a row. JPY net longs decline for the first week since early July as the Japanese currency weakened versus the greenback. Investors also bet that CHF would fall, holding a net $2.3 billion short position, 4% smaller than the week before. Net long USD position against seven major currencies decreased by 18%.

 

Take a look at the following table.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/pozicii_treyderov.png

 

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.

 

In the COT report all the market players are divided into three categories: hedgers (commercials), big speculators (non-commercials) and small traders (non-reportable positions). We analyze only non-commercial positions (mainly, these are banks and investment funds).

 

We recommend you paying attention to:

 

Extreme Positions: If everyone is already long or short it is a strong indication price may reverse because there is no one left for buyers to buy from and no one left for sellers to sell to.

 

Changes in Market Positions: When large speculators change their position and go from net long to net short or vice versa, there typically is a good reason they do this.

 

Changes in Open Interest: Rising or falling open interest may reflect directional commitment or lack thereof and therefore indicate strength or potential reversal of a particular price trend.

 

Find more at the CFTC website.

 

 

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[fallenDC]

Euro area: events calendar

 

Find out what awaits the euro area in August/September.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/548259-system__resources__image-604570.jpg

 

Aug. 20: Greece to redeem 3.1 billion euro bond held by ECB.

 

Aug. 21: Spanish T-bill auction. Greek T-bill auction.

 

Aug. 22: Eurogroup president to meet the Greek prime minister.

 

Aug. 24: Greek prime minister to meet the German Chancellor.

 

Aug. 25: Greek prime minister to meet the French president.

 

Aug. 27: German August Ifo business-climate index.

 

Aug. 28: Final Spanish second-quarter GDP. Spanish T-bill auction. Euro-area July M3/private-sector loan data. Italian bond auction.

 

Aug. 29: Italian T-bill auction.

 

Aug. 30: Italian bond auction.

 

Aug. 31: Euro-area flash August inflation data. Italy to redeem 11.5 billion euro of bonds.

 

Early Sept.: Troika team to return to Athens. European commission expected to make a proposal for a banking union in the euro area by September 11.

 

Sept. 1: No new disbursement of aid to Greece expected before this date.

 

Sept. 3: Euro-zone August manufacturing PMI data.

 

Sept. 5: Euro-zone August services PMI data. German bond auction.

 

Sept. 6: ECB rate decision and press conference. Revised EU second-quarter GDP data. Spanish and French bond auctions. German July manufacturing orders.

 

Sept. 7: German July industrial production.

 

Sept. 10: French industrial production.

 

Sept. 11: Greek T-bill auction.

 

Sept. 12: German constitutional ruling on European Stability Mechanism injunction. General elections in the Netherlands. Italian T-bill auction. German bond auction.

 

Sept. 13: Italian bond auction.

 

Sept. 13-14: G20 finance ministers and central bankers to meet in Mexico City.

 

Sept. 14-15: Informal Eurogroup/Ecofin meeting in Cyprus.

 

Sept. 15 (approximate): Auditors due to release report with detailed capital needs of Spanish banks. Italy to redeem 10.4 billion euro of bonds.

 

Sept. 15-Sept. 30: French 2013 budget due.

 

Sept. 18: Spanish and Greek T-bill auctions.

 

Sept. 19: Portuguese T-bill auction. German bond auction.

 

Sept. 20: Spanish and French bond auctions.

 

Sept. 25: Italian bond auction. Spanish T-bill auction.

 

Sept. 26: Italian T-bill auction. German bond auction.

 

Sept. 27: Italian bond auction.

 

Sept. 30. Irish government hopes by this date to have completed talks with euro zone on ways to refinance bank-rescue debts.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/euro-crisis-chalk-outline-cjmadden1.jpg

 

 

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[fallenDC]

AUD/USD: slowed growth

 

On Monday AUD/USD trades below $1.0550 as demand for high-yielding assets declined. On Thursday the pair opened a new four-month high at $1.0613 and now we observe a bearish correction.

 

According to analysts at Westpac, the key driver for the Australian dollar this week will be external, not domestic data. These external releases will likely bring more pessimism to the markets: data released today showed Japan’s economy grew less than forecasted, while data tomorrow may show the euro zone’s economy contracted in Q2. However, demand for the Aussie was supported as futures traders increased their long positions.

 

RBC: AUD was the best-performing G10 currency in July, consistent with elevated risk appetite. However, we are cautious about AUD's ability to sustain this outperformance as AUD already belies the relative performance of Asian equity markets. We see scope for a correction in AUD/USD back below parity.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/daily_audusd_13.08_12-59.gif

 

Chart. Daily AUD/USD

 

 

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[fallenDC]

EUR jumped on better-than-expected Greek GDP

 

EUR/USD jumped up forming a 20-pip gap on the H1 chart. The pair’s currently trading just below 200-hour MA at $1.2320 (50- and 200-period MAs on H4 chart).

 

The single currency propelled up as Greek GDP data brought positive surprise: the nation’s economy contracted by 6.2% in Q2 vs. 7.0% decline expected. In addition, demand for Italian bill auctioned today was strong, though the yields were higher.

 

Resistance: $1.2385 (August 9 maximums), $1.2400 (August 8 maximum, 50-day MA) and $1.2444 (August 6 maximum).

 

Support: $1.2260 (former downtrend resistance, the recent uptrend support line and 100-period MA on H4 chart), $1.2240 (August 10 minimum), $1.2218, $1.2166 (August 3 minimum) and $1.2133 (August 2 minimum).

 

Commerzbank: As long as EUR/USD keeps trading below $1.2444 (August peak), the outlook for it will remain negative.

 

Westpac: Weak euro zone Q2 GDP is a potential hurdle for euro, but the hopes for ECB’s action will remain. “Risks of a range break are still skewed higher, towards $1.2450/2500”.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/h1_eurusd_13-51.gif

 

Chart. H1 EUR/USD

 

 

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[fallenDC]

NZD's well supported

 

Analysts at BNZ expect NZD/USD to reach $0.8200 by the year end. In their view, fundamental factors are stacked in favor of NZD strength. In general, the global backdrop remains highly supportive of the risk-sensitive NZD. However, in a near-term kiwi’s bounce may be limited at $0.8245 on the back of lackluster NZ recovery and a pushing back of RBNZ rate hike expectations.

 

Monday Q2 retail sales report attracts traders’ attention: economists expect core retail sales to increase by 1.0% following a 2.5% decline in Q1.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/daily_nzdusd_13.08_15-06.gif

 

Сhart. Daily NZD/USD

 

 

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[fallenDC]

FX majors from top forecasters

 

Here are the forecasts for EUR/USD, GBP/USD, USD/JPY, USD/CHF and EUR/JPY from top forecasters. Data were submitted on August 10.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/aaa.png

 

Source: FX Week

 

 

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[fallenDC]

August 14-17: economic events

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/week_ahead.jpg

 

 

Tuesday, August 14

 

Euro area:

 

• French preliminary GDP (5:30 GMT). The euro zone’s second largest economy surprised by growing in Q4 2011 (analysts expected contraction) and remained flat in Q1 2012. PMIs and other indicators point to a 0.1% q/q decline in Q2.

 

• German preliminary GDP (6:00 GMT). Germany’s strong 0.5% q/q growth in Q1 saved the whole euro area from entering an official recession. However, the situation deteriorated in Q2: GDP growth is expected to drop to only 0.1% q/q.

 

• Flash GDP (9:00 GMT). Economists expect the euro zone’s economy to contract by 0.2% q/q in Q2 after zero growth in Q1. Note that the estimates are likely to change once Germany and France release their figures.

 

• German and euro zone ZEW economic sentiment (9:00 GMT). German indicator fell to -19.6 points in July, disappointing once again, and showing the growing pessimism in the German business community. In August specialists expect a very small recovery to -19.2. Meanwhile, the indicator for the entire euro zone is likely to improve from - 22.3 points in July to -19.1 in August.

 

• Industrial production (9:00 GMT). Industrial output may have contracted by 0.4% m/m in June after an unexpected increase by 0.6% m/m in May.

 

Great Britain:

 

• CPI (8:30 GMT). The key inflation index is expected to have increased by 2.3% y/y in July – CPI’s growth rate is slowing down from 2.8% in May and 2.4% in June.

 

US:

 

• Retail sales (12:30 GMT). Retail sales probably rose in July for the first time in four months as employment picked up. The important gauge of consumer spending is expected to rise by 0.4% m/m in July following a 0.5% m/m decline in June. Core retail sales are to rise by 0.4% after a 0.4% m/m decline in the previous month. However, according to HSBC economists, consumer spending growth remains subdued as consumers are still trying to rebuild savings.

 

• PPI (12:30 GMT). According to consensus, the PPI index may have added by 0.3% m/m in July following a 0.1% growth in June.

 

 

Wednesday, August 15

 

Britain:

 

• Unemployment claims from Claimant Count (8:30 GMT). Jobless claims may have increased by 6.3K in July after adding 6.1K in June. The unemployment rate is expected to remain at 8.1%. Such forecasts show that UK labor market is likely to stay weak.

 

• MPC meeting minutes (8:30 GMT). The odds are that the MPC’s decision to leave monetary policy unchanged in August (the key interest rate at 0.5% and QE at 375 billion pounds) was unanimous. As the central bank slashed forecasts for domestic economy last week, analysts think that there’s additional stimulus on the horizon.

 

US:

 

• CPI (12:30 GMT). According to projections, CPI inflation picked up by 0.2% m/m in July from 0% m/m in June, but should stay at the 1.7% y/y level. Core figures are seen unchanged at 0.2%. The small monthly increase won’t be considered as an argument against further easing from the Fed.

 

 

Thursday, August 16

 

Britain:

 

• Retail sales (8:30 GMT). Analysts don’t expect retail sales to cheer up the market: the reading will likely be low in July (+0.1% m/m), the same as in June.

 

Euro area:

 

• CPI (9:00 GMT). Inflation is forecasted to stay at 2.4% y/y in July, same as the 2.4% y/y reading in June.

 

US:

 

• Housing starts (12:30 GMT). The index may have remained at 760K last month. The indicator was slightly growth since the second half of 2011, but remains far below the levels seen in 2007-2008.

 

• Building permits (12:30 GMT). The index is seen slightly up at 770K in July vs. 760K in June. The dynamics of the indicator has been much similar to the one of the housing starts.

 

• Unemployment claims (12:30 GMT). Jobless claims may have increased from 361K to 365K.

 

• Philly Fed Manufacturing Index (14:00 GMT). The index is seen below zero for the fourth consecutive month at -4.3 in August from -12.9 in July. This would be an improvement, though negative reading means that US manufacturing sector is still weakening.

 

New Zealand:

 

• PPI Input (22:45 GMT). The index growth rate slid from 0.5% in Q1 q/q to 0.3% in Q2, analysts say.

 

 

Friday, August 17

 

Euro area:

 

• German PPI (6:00 GMT). Producer prices were worse than expected for 3 months in a row. The prices fell in the past 2 months. Specialists forecast a rise of 0.4% m/m in July.

 

• Current account (8:00 GMT). We saw 3 consecutive months of surpluses with a record 10.9 billion euro surplus in May. June will probably see a lower, but still positive figure of 7.8 billion.

 

Canada:

 

• CPI (12:30 GMT). Both CPI and core CPI are predicted to rise by 0.2% m/m in July, confirming that the previous 0.4% m/m drop was an exception.

 

US:

 

• Preliminary UoM consumer sentiment (13:55 GMT). US consumer confidence continued declining: it dropped to 72.3 points in July from 73.5 in the previous month. A tiny increase to 72.5 is expected in August.

 

 

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[fallenDC]

GBP/USD: technical comments

 

On Monday GBP/USD trades above $1.5700 mark, gaining momentum for a second consecutive day. The pair still remains in a flat range, but we can see a slightly rising channel, created in August. What’s more, since July 11 every new minimum is lower than the previous.

 

We see the next resistance for the pair at $1.5720 (200-day MA) and $1.5775 (the pair has been trading below these levels since May). If the pair manages to overcome this area, further growth towards $1.5904 (61.8% Fib. retracement of a May decline) would become possible. On a downside strong support lies in the $1.5480 area.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/daily_gbpusd_13.08_17-17.gif

 

Chart. Daily GBP/USD

 

 

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[fallenDC]

Macroeconomic indicators

 

The table below provides recent data on the main macroeconomic indicators and is an extremely valuable resource for any trader.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/macro_13.08.png

 

Table. Main macroeconomic indicators

 

 

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[fallenDC]

August 14: forex news

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/14_08_12/utro_eng.jpg

 

The MSCI Asia Pacific Index of shares climbed 0.1%. NZD/USD moves up on the back of the positive retail sales data (+1.3% q/q vs. +0.7% expected), but a short-term trend remains negative. The markets are waiting for the data due today that may add to signs Europe’s debt crisis is worsening. AUD/USD slid to the $1.0500 area. USD/CAD edges up for a second consecutive day.

 

USD/JPY is strengthening for the second day in a row as demand for safe havens declined. The Bank of Japan’s July meeting minutes released yesterday signaled that the central bank’s considering ways of increasing stimulus.

 

EUR/USD’s trading below yesterday’s maximum at $1.2373 ahead of today’s publications: German GDP at 06:00 GMT, French Non-farm payrolls and wages at 06:45 GMT, German ZEW economic sentiment at 09:00 GMT, euro zone’s GDP, industrial production and ZEW survey at 09:00 GMT. In addition, Greece plans to sell 3.125 billion euro in 91-day bills at 09:00 GMT. French GDP came unchanged in Q2, while analysts were expecting contraction.

 

GBP/USD also edged higher, but stays below Monday’s high and 200-day MA around $1.5720. UK is to release July CPI figures today at 8:30 GMT. According to the forecasts, inflation declined last month by 0.1 percentage point to 2.3%. Such data will allow the markets expect more easing from the Bank of England.

 

Also watch for US data later today (12:30 GMT): retail sales figures for July will offer an important update on the state of consumer demand at the start of Q3. American PPI may increase a bit, but nothing that would prevent the Fed from more easing.

 

 

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[fallenDC]

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: $1.2225, $1.2230, $1.2250, $1.2260, $1.2325, $1.2370, $1.2400;

 

GBP/USD: $1.5600, $1.5700;

 

USD/JPY: 78.25, 78.45;

 

AUD/USD: $1.0550, $1.0600;

 

NZD/USD: $0.8200;

 

EUR/GBP: 0.7800.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/01_08_12/flatline.jpg

 

 

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[fallenDC]

AUD/USD: technical comments

 

As can be seen from the daily chart, the bulls have so far been very persistent: the pair spent quite a long time close to the upper boundary in comparison to the previous single peaks. For now, the pair hasn’t conquered levels above $1.0600.

 

At the same time, Aussie didn’t fall dramatically right after touching the boundary, but remains relatively flat. Australian currency may continue moving sideways from this point on the calm August market.

 

Some analysts expect a deeper correction to $1.0400 levels after the pair lost its ground on Monday, as investors await data that could add to global growth concerns.

 

Also note that AUD/USD is not far from strong technical resistance (weekly downtrend line around $1.0670). The key support area is $1.0495/45. If these levels fail to support the pair, it will become vulnerable for a decline to the 200-day MA.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/daily_audusd_13.08_13-46.gif

 

Chart. H4 AUD/USD

 

 

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[fallenDC]

EUR/USD: technical update

 

EUR/USD renewed week’s maximum reaching $1.2385, but then was held back by the discouraging economic data.

 

50-period MA crossed the 200-period one on the H4 chart – a bullish signal. Analysts at Commerzbank, however, insist that the outlook for euro is negative below $1.2444.

 

Resistance: $1.2390, $1.2400 (50-day MA, psychological level), $1.2440 (August maximum), $1.2500, $1.2620, $1.2660 (longer-term downtrend, 50% retracement from May maximum to July minimum).

 

Support: $1.2320, $1.2280/60, $1.2166 (August 3 minimum), $1.2133 (August 2 minimum), $1.2040 (July minimum).

 

Both support and resistance look strong at this point. Tomorrow French and Italian markets are closed due to the bank holiday. The data flow from Europe is over for now, so it will be up to US to move the market.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/h4_eurusd_13-54.gif

 

Chart. H4 EUR/USD

 

 

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[fallenDC]

Analysts: what supports the Aussie?

 

Despite the risk negative environment, the Australian currency is enjoying a big increase in net long positions. What’s the reason?

 

According to some economists, the Aussie is supported by policy easing expectations: the ECB is likely to launch a massive bond-buying program, while the Fed seems to be close to a third round of QE.

 

"As global central bank policy has diminished tail risk and crushed volatility traders are adding to risk positions," say strategists at Scotiabank.

 

However, strategists at RBC are less optimistic. In their view, the Aussie is to weaken after the RBA expressed concerns about the impact of a strong national currency on the economy. Specialists add that the net long positions growth was too quick (investors were short on the Aussie in early June).

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/ss-100528-australia-02_ss_full.jpg

 

 

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[fallenDC]

USD/CAD: technical update

 

Last week USD/CAD breached downtrend support line which started to act as resistance. In addition, the pair went below the uptrend support line at 0.9955 connecting 2011 low and April 2012 minimum. This too will strengthen resistance.

 

The greenback is now consolidating above 0.9900 (psychological level which has acted several times as support during the past 2 years). If this support fails, USD/CAD will slide to 0.9800. At the same time, daily RSI is close to the oversold area.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/usdcad_15-38.gif

 

Chart. Daily USD/CAD

 

 

On the H4 chart we see bearish convergence on MACD – bullish signal. However, 50-, 100- and 200-day MA are sloping down providing resistance for the pair.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/h4_usdcad_15-41.gif

 

Chart. H4 USD/CAD

 

 

Resistance: 0.9955 (previous support line), 1.0000 (psychological level), 1.0050 (February, April maximums, December 2011 minimum), 1.0100 (200-day MA).

 

Support: 0.9900, 0.9860, 0.9840 (February, March minimums), 0.9800.

 

We think that USD/CAD will be moving lower, but think that support at 0.9800 is very strong, so one should be looking for a chance to enter longs down there.

 

 

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[fallenDC]

NZD/USD: technical comments

 

On Tuesday investors are indecisive on the NZD/USD, but all in all the pair demonstrates a weekly decline. The kiwi has approached a strong support (previous resistance) at $0.8065 – the pair again and again repelled from this level in 2011 and 2012.

 

As can be seen from the daily chart, the pair remains in a channel, created by two lines: the upper connects 2011 and 2012 highs, the lower - the bodies of these candles). Today NZD/USD trades slightly above the lower. If the pair breaks it on a downside, it will target the lower boundary of the upward channel, existing since June. Support can be seen around $0.7960 (MA’s crossing) and $0.7810 (July 25 low).

 

If not, the pair will fluctuate towards the upper channel-forming line. Further strong resistance lies at $0.8200, $0.8317 (April 13 maximum) and $0.8470 (February 29 maximum).

 

Note that on a daily chart we can see a bullish divergence.

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/nzdusd_16-56.gif

 

Chart. Daily NZD/USD

 

 

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[fallenDC]

US data comes more solid than expected

 

Things in the US aren’t that bad after all, are they?

 

After mixed (more negative than positive) news from Europe, US data came better than expected.

 

American retail sales rose by 0.8% m/m (cons.: +0.3%; prev.: -0.7%). Core indicator increased by 0.8% (cons.: +0.4%; prev.: -0.8%). PPI added 0.3% m/m last month (cons.: +0.3%; prev.: +0.1%). Core indicator increased by 0.4% (cons.: +0.2%; prev.: +0.2%).

 

Wells Fargo: “Overall, foreign exchange markets continue to show a lack of conviction, although with global equity markets and European bond markets showing gains, we have a slight bias towards yen and US dollar weakness, and strength in most other foreign currencies.”

 

http://www.fbs.com/sites/default/files/image/analysis/August2012/13_08_12/14_08_12/retail-sales.jpg

 

 

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