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Dukascopy Forex Overview: 22-05-2012 - Afternoon
| Dukascopy Bank analytic desk report Published: 22/05/2012 19:27 | |
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Dukascopy Fundamental Analysis
EUR
Gold extended previous gains in Asian session on Tuesday as concerns over Greek exit from the single currency union eased. At G8 summit leaders of eighth largest economies stated that they would do everything possible to retain Greece in the Euro Zone. COMEX gold June contract traded at 1,592.35 US Dollars per troy ounce on the New York Mercantile Exchange, advancing by 0.23%.USD
The US Senate has passed a bill aimed at tightening sanctions imposed on Iran to force the country to cease its nuclear program. The new sanctions imply investigation of role of Iran's Revolutionary Guard in oil exports as well as obliging the US companies to disclose any business activities with Iranian partners. The move came ahead of negotiations between Iran and six major economies due on May 23.GBP
UK's inflation in April was lower than expected and reached 3% on yearly basis. It dropped 50 basis points since march and it was the first time in more than 2 years when yearly inflation was withing government target. Core inflation which does not take in to account more volatile food, alcohol, tobacco and energy prices slowed down by 40 basis points since March and was 2.1%. Retail inflation, gauge used in wage talks, decrease to 3.5% from 3.6% in March.CHF
The official SNB exchange rate for EUR/CHF is 1.2010 today; yield on 10-year Swiss Confederation bonds increased to 0.70%. 3-month LIBOR CHF stands at 0.11%, and is within the target range of 0.00-0.25%. Swiss SMI stock index has gained 0.96% since the opening bell, and is currently fluctuating around 5870 points.JPY
Asian stocks rose on Tuesday amid increased bargain buying due to lower prices. Moreover, hopes that the EU leaders will help to resolve Greek crisis coupled with possible depreciation of the Yen provided stimulus for stock prices. Hong Kong's Hang Seng Index increased by 1.01% while Australia's S&P/ASX200 gained 0.68%. Meanwhile Japan's Nikkei 225 Index rose by 0.97%. |
Dukascopy Technical Analysis
EUR/JPY
"The AAA of yesteryear is not the AAA of today. Japan being downgraded is not a massive surprise for the marketplace. I don’t think rating agencies are necessarily ahead of the game on this."- Alan Ruskin, Deutsche Bank AG (based on Bloomberg) EUR/JPY recovered today, though it is still trading within the 100.20-101.70 price channel, after falling for almost 2 consecutive months. AUD/USD
"Circumstances today in the United States call for continued measured efforts to quicken the pace of recovery and shrink unemployment, while keeping inflation controlled."- Dennis Lockhart, Atlanta Federal Reserve Bank President (based on Reuters) As the US dollar slightly weakened across the board, the Aussie managed to add to gains today, recovering after a prolonged downfall from 1.0850 area. USD/CAD
"We started off with a bit of risk aversion, and now we seem to be increasingly moving into some risk appetite and that tends to be positive for the Canadian dollar."- Bank of Nova Scotia (based on Bloomberg) The pair committed a decline today after a strong really, initiated at the beginning of May. NZD/USD
"If the dollar’s very strong, then exporting becomes difficult. I’m not pleading for an extremely low dollar but I think 83 was on the high side. Where we are now is more rational."- Theo Spierings, Fonterra Cooperative Group Ltd. (based on Bloomberg) The pair started a recovery today and it is prone to face a firm resistance at 0.7690, though if the level is successfully passed by, 0.7760 (R1 Weekly) and 0.7790 (61.80% Fibo) are going to be the next targets for the bullish traders. |
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Expert Commentary
"EU summit is not going to be an event that will trigger a very sharp moving in EUR/USD."
N. Christensen, Chief Currency Strategist at Nordea Bank, on the Euro. >>"There is no reason to buy the Yen for the time being." "We are now expecting AUD/USD at the year end at around 97, a continued move below parity."
Emma Lawson, Senior Currency Strategist at NAB, on the Aussie Dollar. >> |
Press Review
Europe
U.K. Inflation Slows As IMF Sees Need For More StimulusU.K. inflation slowed more than economists forecast in April, cooling to a level that relieves Bank of England Governor Mervyn King of the task of writing a letter to the government. USA
Existing home sales rise 3.4 percent in AprilU.S. home resales rose in April to their highest annual rate in nearly two years and a falloff in foreclosures pushed prices higher, hopeful signs about the pace of recovery in the still-struggling housing sector. Asia & Pacific
Asia stocks rally, with resource, tech shares upAsia stocks rallied Tuesday, led by gains for resource and tech shares, as the region tracked overnight advances for U.S. stocks and commodity futures. |
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Market Research
Currency Index & Volatility
Within the observed period (May 14 - May 17) the value of the Euro, quantifiable through its respective currency index, has been fluctuating just below its initial level, while last Friday brought in considerable changes into the market. |
Dukascopy Bank Sentiment Index
The current and the three-year global economic sentiment indices deteriorated slightly in April to 0.49 and 0.64 points respectively. The six month economic sentiment index improved to 0.54 from 0.52 in March, according to a poll conducted by Dukascopy Bank SA. |
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Dukascopy Aggregate Technical Indicator
Dukascopy Bank presents a new research product - the aggregate technical indicator. The new tool will indicate the strongest signals on major currency pairs. |
Commodity Overview
Precious Metals
Precious metals were mostly higher on Monday as eased concerns over the Euro Zone’s debt crisis bolstered prices. At G8 summit leaders of world’s largest economies stated that the EU has to do whatever it takes to keep Greece in the Euro Zone.Industrial Metals
Industry metals followed bullish trend on Monday after China’s Premier Wen Jiabo announced that the country needs additional stimulus to boost growth.Energy
Energy commodities advanced on Monday ahead of key negotiations between Iran and six major economies regarding Iran’s nuclear program.Agriculture
Rural commodities were mostly lower despite persistent worries about impact of adverse weather on grain crops. |
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Trade Pattern Idea
EUR/JPY Emerging Pattern: Rising Wedge
EUR/JPY fell from 102.38 and rebounded from 100.22 forming a rising wedge on 1H chart. The pattern has 53% quality with 58% magnitude in a 72-bar period. The price rebounded from the 3 month low at 100.22, then soared to the resistance level at 101.55 and has grown to 101.8, where it is fluctuating now. Present bias and 4H timeframe are bullish, but 1H and daily timeframes are neutral. Bullish traders might focus their attention on the resistance level at 101.99. If the price breaches this level, the initial target for long traders could be around 102.2 where SMA200 stands.. |
Economic Research
Commodity currency: Norwegian Krone
The Dukascopy Bank research department presents the final part of its research on commodity currencies. In the current issue we consider commodity sectors’ influence on Norwegian krone exchange rates. Norway is the second largest non-OPEC oil exporter, and energy products make up more than 50% of its exports. It gives us an opportunity to establish whether the exports’ share can be named as one of the relationship-defining factors. |
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| Disclaimer: This overview can be used only for informational purposes. Dukascopy Bank SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained. |
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