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Dukascopy Forex Overview: 23-05-2012 - Morning
| Dukascopy Bank analytic desk report Published: 23/05/2012 11:04 | |
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Dukascopy Fundamental Analysis
EUR
"The rally is mostly technically driven after we became quite oversold last week."- Raimund Saxinger, a fund manager at Trust Investment GmbH European stocks rose by the most in a month on Tuesday. The Stoxx Europe 600 Index gained 1.91 per cent to 244.76. Germany’s DAX Index edged higher 1.65 per cent and France’s CAC 40 Index added 1.88 per cent. The U.K.’s FTSE 100 Index rose 1.86 per cent to 5,403.28 USD
"People are becoming more confident about job prospects and about taking on mortgages."- Millan Mulraine, a senior U.S. strategist at TD Securities Inc. U.S. existing home sales rose in April to an annual rate of 4.62 million from 4.47 million in March, said the National Association of Realtors. GBP
"These [inflation] figures give the Monetary Policy Committee slightly more leeway to undertake more QE to cushion the U.K. economy from the euro-zone turmoil."- Vicky Redwood, an economist at Capital Economics Ltd. Inflation in the U.K. eased by more than forecast in April, giving the Bank of England slightly more room for action. Year-on-year inflation rate fell to 3 per cent in April from 3.5 per cent in March, said the Office for National Statistics on Tuesday. CHF "We’re seeing a normal rebound after a selloff." - Nils Rosendahl, an analyst at Nordea Markets Swiss stocks rose on Tuesday after a report showed existing home sales in the world’s largest economy rose for the first time in three months. JPY "The downgrades and negative outlooks reflect growing risks for Japan's sovereign credit profile as a result of high and rising public debt ratios." - Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch Fitch credit rating agency cut Japan’s local currency credit rating by one notch to A plus with a negative outlook from AA minus. It also lowered long-term foreign currency rating to A plus from AA. |
Dukascopy Technical Analysis
EUR/USD
"Expectations are growing for measures to tackle the European debt crisis to be hammered out at EU summit meeting."- Bank of Tokyo-Mitsubishi UFJ (based on WSJ) Pullback of EUR/USD did not last for long, as the pair has only rallied up to 1.2818, where it was halted by a resistance. For the time being the currency couple should trade sideways, as it is supported by 1.2772. GBP/USD
"Cable could ease towards $1.55 and even $1.53 primarily because of the dollar's strength and also because the BoE's stance has not really changed"- Saxo Bank (based on Reuters) Support at 1.5785 has repeatedly repelled GBP/USD, which is expected to erode the level eventually, as the CAble has recently bounced off a formidable resistance at 1.6111 and is headed towards 1.5263, which, in turn, might be attained within the next three months. USD/JPY
"If they [the BoJ] do surprise and expand their asset-purchase program again, the reaction will be relatively subdued and short lasting"- Citigroup (based on Bloomberg) USD/JPY is currently attempting to recover from 78.87 (200 day SMA), although the gains should remain tepid, being that the pair is closing in to a downtrend resistance, which has been respected by the market since Mar 15. USD/CHF
"I do not think this option [QE3] can be taken off the table. QE3 will work under the right circumstances. But I don't believe such circumstances prevail at his time"- Dennis Lockhart, Atlanta Federal Reserve President (based on CNBC) USD/CHF seems to have terminated its bearish correction, which has stopped ahead of an initial support located at 0.9359. In case of an unlikely scenario when the currency pair breaches the latter level, it may target 0.9307 first, then 0.9216/11. |
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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
Hollande set for EU summit showdown with MerkelEuropean leaders will explore ways of breathing life into their stricken economies at a summit on Wednesday, but the issue of euro-zone bonds and whether they can help alleviate two years of debt turmoil will dominate the meeting. USA
Obama Prospects Improve As Swing State Economies ImproveFrom extra shifts at auto and steel plants in Ohio to office buildings rising in Northern Virginia, the geography of the U.S. economic rebound is providing an edge to President Barack Obama’s re-election. Asia & Pacific
China's commodity-demand peak over: Credit SuisseCredit Suisse joined others Wednesday in predicting that China's commodity-demand peak has passed, saying the nation will no longer serve as a driver in the global commodity supercycle. |
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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
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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/USD Emerging Pattern: Channel Down
EUR/USD has formed a Channel Down pattern on the 4H chart, moving down from 1.328 to it’s five month low at 1.263 where the pair is currently at. The pattern has 55% quality and 86% magnitude in a 104-bar period. The price bounced from the support level at 1.315, then rebounded from 1.328 and slowed near 1.263 level. Short-term bearish trend is confirmed by the Alligator indicator. SMA200 indicator started to decrease after the pair crossed it at 1.3197 level. If the pair rebounds from the support level at 1.2448, the initial target for long traders might be around 1.2640, where the resistance level lies. |
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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