internationallove

"MIG bank: strategists of selling USD/CHF"(2011-07-26) Technical analysts at MIG bank advise investors to sell US dollar versus Swiss franc. The specialists give 2 possible strategies. Firstly, one may sell USD/CHF on its rebound to 0.81 with stops above 0.82 targeting 0.80, 0.7825 and 0.7650. Secondly, if the greenback doesn’t recover, the bank recommends opening shorts on the pair’s break below 0.7997 stopping above 0.8097 and targeting 0.77 and 0.76. It’s necessary to remember about the fundamental factors though. Strategists at HSBC believe that American currency will gain support once US debt issue is resolved. In their view, if US lawmakers approve a package of at least $3.5 trillion of cuts, the danger of a credit downgrade should decrease. График. H4 USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/8129

"US dollar may suffer this week from the economic data"(2011-07-26) US Q2 GDP is released on Friday at 4:30 pm (GMT+4). If the reading is low, US dollar will get under a very negative pressure the debt burden will be accompanied by the nation’s economic weakness. Economists surveyed by MarketWatch expect to see annual growth 1.6% after 1.9% in the first quarter. During the past 7 quarters the growth accounted for 2.8% on average. Never the less, for US to enjoy the sustainable decline in unemployment, economic growth pace has to exceed 3%, so the results between 2.5% and 3% just won’t be enough. It’s also necessary to note that many experts are already thinking about the third quarter hoping that the economic situation in the US will improve due to the increased auto output as the Japan supply-chain problems are resolved as well as lower commodity prices. However, if the Q3 data disappoints the market the sentiment will turn very negative as traders are tired of the constant bad news they have been getting so far. Analysts at JPMorgan also advise investors to pay attention to US bond auctions. US Treasury will offer 2-year securities on Tuesday, 5-year papers on Wednesday and 7-year bond on Thursday. In their view, low demand for Treasuries will make dollar weaken versus Japanese yen, Swiss franc and the single currency. Comment here http://www.fbs.com/analytics/news_markets/view/8127

"Commodity currencies have become less dependent on commodities"(2011-07-26) The currencies of the large exporters of raw materials are becoming less correlated with the dynamics of commodity prices as investors choose them as a refuge from the debt issues in Europe, the United States and Japan. The following figures speak for themselves: S&P’s GSCI Total Return index of 24 commodities lost 8.45% since April, while Canadian, Australian and New Zealand’s dollars and Norwegian krone added 1% on average during the same period. Strategists at BMO Capital Markets claim that Canadian dollar seems to have outpaced its commodity-price fundamentals. Analysts at Citigroup underline that the desire of the central banks, especially the Asian ones, to diversify their reserves is a significant driver of commodity currencies. Strategists at Mizuho Corporate Bank note that the greenback is slowly but surely losing its status as the world’s reserve currency, while Australian and Canadian dollar are now the majors with large markets. According to the IMF data, the share of the world’s currency reserves denominated in “other currencies” such as Aussie, kiwi and loonie rose from 3.6% a year ago to 4.7% in the first quarter. The greenback that accounted for 72.7% of the reserved 10 years ago represented 61.8% in the first 3 months of 2010 and 60.7% at the beginning of 2011. Another reason of commodity currencies’ strength is relatively higher interest rates. Investors will get about 4.35% more from 2-year government bonds in Australia, Canada, New Zealand and Norway than from Treasuries of similar maturity. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/8125

"Wells Fargo: EUR/USD won’t rise above $1.47"(2011-07-26) The single currency rose today to the 3-week maximum versus the greenback at $1.4500. Analysts at Wells Fargo Bank claim, however, that though they have become more positive on euro, they think that its advance is going to be limited as there’s evidence of the euro zone’s economic slowdown and remained uncertainty about the possibility of further contagion. According to the specialists, the pair EUR/USD has potential to gain during the next few weeks, but it will be capped by the June maximum in the $1.47 area. The bank adds that commodity and emerging currencies may be the best performers in the longer term as the risks in Europe and United States ease down. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/8123

"BOTMUFJ: USD/CHF has potential for rebound"(2011-07-26) Technical analysts at Bank of Tokyo-Mitsubishi UFJ believe that the greenback may rise from the record minimum versus the Swiss franc in the 0.8000 area hit today. The specialists underline that 14-day RSI (relative strength index) for USD/CHF dropped to 30 that may mean that its rate has fallen too rapidly and risks reversing. As a result, the economists see the chance of the pair’s short-term recovery. In their view, US currency that is now at roughly 6% below the Ichimoku Cloud has to reach it in order to confirm the rebound and the change of trend. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/8121

"Citigroup: US dollar may gain as a safe haven"(2011-07-26) Analysts at Citigroup believe that the demand for the greenback as a safe haven may rise in the situation of uncertainty caused by the lack of agreement between Barack Obama and US Congress on raising the $14.3-trillion debt ceiling and reducing the budget deficit. The specialists remind that during the times of elevated risk aversion investors tend to seek most liquid and deepest markets and American Treasuries and dollars have traditionally been such. As US authorities have reached the deadlock, stock markets are down so that investors’ risk sentiment worsens. That will make traders desert riskier assets. House Speaker John Boehner who represents the main opposition force against the White House’s called for a 2-step debt-limit extension that would provide a roughly $1 trillion – less than Obama has requested – demonstrating his unwillingness to compromise and withstanding the threat of President’s veto. Standard & Poor’s estimates the possibility of US rating cut from AAA to AA+ within 3 months by 50%. Comment here http://www.fbs.com/analytics/news_markets/view/8119

"Pimco: US risks to lose its credit rating"(2011-07-25) US President Barack Obama has asked for a $2.4 trillion borrowing boost in the $14.3 trillion debt ceiling. House Speaker John Boehner encouraged the Republicans to unite their efforts in order not to let Obama obtain the money at once without any guarantees of spending cuts. Mohamed A. El-Erian, the head of Pacific Investment Management Co, the world’s largest manager of bond funds, believes that the United States may lose its top AAA credit rating even if US Congress agrees to lift up the debt ceiling. The specialist notes that the nation already suffers from weak economic growth and high unemployment and the debates over the debt limit make the problems intensify. Standard & Poor’s estimates the possibility of US rating cut within 3 months by 50%. Yields on benchmark 10-year rose to 2.96% on July 22 but remain below the 5-year average of 3.71%. Comment here http://www.fbs.com/analytics/news_markets/view/8110

"Deloitte: forecast for the RBA rates"(2011-07-25) Analysts at Deloitte Access Economics expect the Reserve bank of Australia to raise the interest rates 3 times the next year, but not earlier. The specialists base such forecast on the expectations that the mining boom encourages the growth of wages stimulating the economic recovery from the costliest floods. According to Deloitte, Australian incomes will rise because of high commodity prices and strong demand. The number of people employed won’t be sufficient enough for the growing economy. As a result, the demand for labor will get higher than the supply and the wages will go up. The last time the RBA changed rates was in November 2010. Since that time, the central bank’s benchmark rate accounts for 4.75%. During the period from April and June the number of jobs dropped by 5,400. Australian dollar appreciated by 22% during the past year. It’s necessary to note that Australia’s recovery is two-speed as the mining industry flourishes, but other areas such as tourism, manufacturing, farming and retailers suffer from the strong national currency. That’s why the economists expect hikes in the longer term. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/8112

"Mizuho, SocGen advise to sell USD/JPY"(2011-07-25) Currency strategists at Mizuho note that last week the greenback has posted another minimum versus Japanese yen. In their view, the downside momentum for USD/JPY has increased. The specialists say that all elements of the weekly Ichimoku chart indicate short position. In their view, the greenback is on its way down to 76.25. Analysts at Societe Generale believe that as there’s some temporary improvement in Europe, all attention will switch to the United States. The economists claim that the situation in the US is very different from what’s happening in Japan. The bank reminded about the high current account surplus. As a result, Societe Generale recommends selling dollar versus yen with stops at 79.75 and target at 75.00. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/8114

"BofNY Mellon, BOTMUFJ: US dollar prospects"(2011-07-25) Economists at Bank of New York Mellon note that once US government and Congress reach agreement on lifting up the debt ceiling, dollar’s rate will rebound. In their view, the greenback will show the most significant growth versus British pound as at the beginning of the year the market was too excited about the potential rate hikes in the UK where the inflation level is high, but the central bank is unable to tighten policy because of the low economic growth. At the same time, analysts at Bank of Tokyo-Mitsubishi UFJ warn that if the debt problem remains unsolved by the deadline on August 2 the United States may face another recession. In their view, if the nation loses its top AAA credit rating, the near-term impact won’t be that strong, but in the longer time perspective it will seriously affect US currency. Analysts at Barclays Capital believe that in the short-term the pair GBP/USD may rise to $1.6385 and $1.6425. Support is situated at $1.62. As for USD/JPY, the strategists advise investors to sell the greenback versus Japanese yen on its advance to 78.75. In their view, the pair is on its way down to 77.50. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/8107

"Standard Chartered cut UK GDP forecast"(2011-07-25) Analysts at Standard Chartered claim that the Bank of England will keep the borrowing costs at the current 0.5% level until the beginning of 2013. The specialists lowered UK economic growth forecast in 2011 from 1.4% to 1.1%. In their view, inflation may surge in the coming months, but this increase is likely to be short-lived. The economists expect consumer prices’ growth pace to return to the target levels by the end of 2012. As a result, British central bank will start tightening monetary policy in 2013. Analysts at BNP Paribas advise investors to pay attention to the Britain’s preliminary GDP release on Tuesday, July 26, at 12:30 pm (GMT+4). According to them, UK economy won’t grow at all, while the market is looking forward to 0.2% advance. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/8105

"Commerzbank: GBP/USD will rise above $1.65"(2011-07-25) British pound gained last week about 130 pips versus its US counterpart consolidating in the $1.6300 area. Technical analysts at Commerzbank believe that GBP/USD has broken up the key short-term resistance levels – its 3-month downtrend line at $1.6211, 55-day MA at 1.6204 and the 50% Fibonacci retracement at $1.6265. The bank now expects sterling to rise to the previous 2010-2011 uptrend line at $1.6395 and 78.6% retracement of the decline from April and May maximums at $1.6540/47. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/8103

"UBS, Credit Agricole: risk factors for the single currency"(2011-07-25) Currency strategists at UBS think that the United States may avoid default, but get downgraded by the ratings agencies. At the same time, the situation in Europe is far from optimistic as there are the prospects of a selective default in Greece, the bailout implementation risks as the EFSF has not been expanded. It’s also necessary to mention the renewed concerns about the peripheral euro zone’s nations and deteriorating data in the core economies of the region such as lower German and euro-zone PMI data and weaker German IFO. As a result, the specialists advise to sell EUR/USD at its advances to $1.44/1.45. Analysts at Credit Agricole also note that euro will remain very vulnerable to the negative news from the PIIGS this week. In addition, the bank points out that if the European economic data keeps worsening, investors may start wondering if the ECB had made the right decision to raise rates in April and June. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/8101

"Ichimoku. Weekly forecast. USD/CHF"(2011-07-25) Weekly USD/CHF The downtrend for USD/CHF since the beginning of the year is in progress. A week before last the greenback fell, while last week it went through some consolidation. The Ichimoku Cloud is still going down showing that the bears are dominating at the market, while the Turning line (2) and the Standard line (1) are providing support for the rate. As the same time Kijun-sen is horizontal that means that the consolidation may continue, though the pair will remain under negative pressure and its decline seems more likely. Chart. Weekly USD/CHF Daily USD/CHF On the daily chart it’s possible to see that the Turning line (2) was successful enough in not letting the prices move up acting as a resistance. The next obstacle for the pair’s advance is the longer term Standard line (1) and the downtrend line. It’s necessary to note that Tenkan-sen (2) keeps going down having a negative impact on the greenback and pulling the prices lower. In addition, the descending Ichimoku Cloud is widening (3) – Senkou Span A is falling, while Senkou Span B remains horizontal. All in all, the technical outlook for USD.CHF is bearish. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/8093

One more Forex-seminar by FBS took place in Malaysia !! Dear traders! A meeting of Malaysian traders and leading Forex experts took place in Malakka on the 16th of July. The second Forex-seminar held as part of FBS Road Tour aroused the interest of both beginners and experienced traders. During the seminar traders were taught how to implement Elliott Wave Theory, Fibonacci method and trend lines. All of them had a chance to put questions about FBS and discuss Forex trading with the leading trading experts and analysts. Moreover, everyone who attended the seminar could take part in exciting contests, get special bonuses and win valuable prizes. Next Forex-seminar byFBS will take place in Seremban, Negeri Sembilan. Detailed information on the seminar will be available soon on our website. Keep updated!

Just 2 Days left for the ending of 999 Demo Contest !!! 5th season of the great 999 contest is almost at its peak stage, we are hoping for a marvelous entertaining outcome. If we look at the table now, first two places holding by Indonesian traders(Account#17853)(Account#179918) meanwhile 3rd place secured by Ukrainian trader(Account#179447). It seems Indonesian traders took more interest in this contest as compare to other parts of the globe, we are hoping for a healthy competion and happy ending of this contest. We wish you all best of luck in the contest.But don’t forget, that unpredictable changes can always happen, so all the participants have the chance to win! wishes you good luck!. Regards, FBS Holdings Inc. Account#178535 Position: 1st Country: Indonesia Balance:139431.72 USD Account#179918 Position: 2nd Country: Indonesia Balance:96621.39 USD Account#179447 Position: 3rd Country:Ukraine Balance:93707.58 USD Check other contestants ranking Go to the scoreboard: http://www.fbs.com/contest/999/participants?type=cur

"Ichimoku. Weekly forecast. GBP/USD"(2011-07-25) Weekly GBP/USD Although last week the Ichimoku analysis gave bearish signals, the bulls managed to achieve significant advance. The “dead cross” formed by Tenkan-sen (2) and Kijun-sen (1) didn’t have strong impact on the market as it situated below the Ichimoku Cloud. The prices managed to get up overcoming resistance provided by the Turning line (2), the Standard line (1) and the downtrend resistance line. These lines will act now as support for sterling’s rate. The sole negative moment is the narrowing Kumo – Senkou Span B is reducing the gap with the upper border of the Cloud that means the bulls are never the less losing their power. Chart. Weekly GBP/USD Daily GBP/USD The situation at the GBP/USD chart is also rather remarkable. The prices have broken resistance of the longer term Kijun-sen and surged on Thursday entering the Ichimoku Cloud (2) as the risk sentiment improved after the EU summit. Support for sterling will be now provided by Senkou Span A. Tenkan-sen and Kijun-sen have merged in one line preparing to form the “golden cross” (1). However, the power of the signal will be limited as the intersection is found below Kumo. It’s necessary to note that the Cloud remains descending, so the prices are likely to slide along its lower border. As the same time, the lagging Chinkou Span has broken up the price chart (3) and Kumo is gradually narrowing. The Standard line has gone sideways and the mix of different factors means that the rate is going to consolidate within the Cloud if there no strong fundamental effects. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/8091

"BarCap, Commonwealth: bullish forecast for Aussie"(2011-07-22) Australian dollar is on its way up versus the greenback and Japanese yen. According to the data released today, Australia’s import prices added 0.8% in the second quarter while the economists were looking forward to 1.1% decline. The CPI data due next week may show that inflation pace rose to the maximal level in more than 2 years – economists surveyed by Bloomberg expect consumer prices to 3.4% in Q2 from the 2010 level. As a result, the chances of the Reserve bank of Australia’s rate hike increase. Analysts at Commonwealth Bank of Australia are very bullish on Aussie. In their view, after the inflation report there will be no more speculation about the reduction of Australian borrowing costs. Strategists at Citigroup also think that the next move of the RBS will be to raise the rates. Specialists at Barclays Capital note that AUD/USD has manage to break above the upper border of its trading range at $1.0810 rising to 2-month maximums in the $1.0867 zone. The analysts think that the pair may go higher and climb to $1.0890 and then to May maximums in the $1.1010 area. The bank says that the outlook for Australian currency will remain bullish as long as it’s trading above $1.0765. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/8078

"Commerzbank: watch today’s Canadian economic data"(2011-07-22) Yesterday the greenback went down versus its Canadian counterpart breaching support at 0.9450. Analysts at Commerzbank believe that the market’s attention will be focused on Canada’s inflation report released today at 15:00 (GMT+4) and retail sales data published at 16:30 (GMT+4). For the timely information see our economic calendar (http://www.fbs.com/analytics/economic_calendar/). The specialists note that Canadian June CPI data has to be surprisingly high, while May retail sales have to show solid growth. In such case the pair USD/CAD may fall below 0.9425 to July 2007 minimums in the 0.9060 area, especially if investors remain optimistic after the Greek bailout. Chart. Daily USD/CAD Comment here http://www.fbs.com/analytics/news_markets/view/8075

"SocGen, BarCap: euro may rise to $1.50"(2011-07-22) Analysts at Societe Generale believe that though the negative factors for euro are, of course, not all gone, the single currency may climb in the short term to $1.50 versus the greenback after the EU summit was successful enough. Strategists at Barclays Capital advise investors to buy EUR/USD on its slide down to $1.4300/1.4280 or on the break above $1.4460. In their view, the pair may rise to the trend line resistance at $1.4580. If euro manages to overcome this level and close the week above it, it will be able to strengthen to $1.4700 and possibly $1.4950. The specialists note that the outlook for the pair will turn negative if the rate falls below $1.4180. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/8073

"The main results of EU summit"(2011-07-22) The European leaders agreed yesterday on the 159 billion euro ($229 billion) second bailout package for Greece inducing the private bondholders to take part in financing the indebted nation. 109 billion euro will come from the euro region and the International Monetary Fund, while the rest 50 billion euro will be brought by the financial institutions after a series of bond exchanges and buybacks that will also reduce Greece’s debt burden. Investors will have the option to exchange existing Greek debt into four instruments: 3 will be fully collateralized by AAA-rated zero-coupon securities and have a 30-year maturity, and the fourth will be for 15 years and partially collateralized by funds held in an escrow account. The 440-billion euro European Financial Stability Facility was authorized to buy debt of the peripheral euro zone’s nations in stress. In addition, the fund was enabled to help the problem banks (the stress tests showed that 24 out of 90 banks have financial difficulties) and offer credit-lines for the European nations that are losing investors’ confidence (the practice used by the IMF). All in all, it\s necessary to note that the European policymakers tried to compromise and develop a strategy to support Greece and make sure that Greek crisis doesn’t spread. Analysts at UniCredit believe that the measures taken by the EU officials create the best possible conditions for Greece and other peripheral countries. The specialists point out, however, that the market will keep pricing in some probability that these steps won’t be enough to stop the contagion. Comment here http://www.fbs.com/analytics/news_markets/view/8071

"EU summit: the draft plan of resolving the crisis"(2011-07-21) It seems that the European authorities have managed to make some progress in dealing with the Greek issue. According to the report containing the draft plan of resolving the crisis, the European Financial Stability Facility will be allowed to buy bonds in the secondary market. The plan also calls for a reduction in interest rates on EFSF loans to 3.5% while extending maturities from 7 ½ to 15 years. The problem European banks will get help from the EFSF to recapitalize. Analysts at Brown Brothers Harriman point out that the ECB won’t need to be the purchaser of “last resort” in the euro zone. The specialists note that the markets have become more optimistic as it looks as if the EU is going to increase the flexibility and the scope of the way the EFSF works. The ECB also seems to give in and agree on accepting “selective defaulted” debt as a collateral, thus saving the Greek banking system. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/8067

"RBS: British pound is undervalued"(2011-07-21) Currency strategists at Royal Bank of Scotland believe that British currency is, so it’s possible to invest in sterling undervalued in the long term looking forward to its steady appreciation. In their view, pound is 14% below its 10-year average in real terms. The specialists think that the greenback is also cheap, while the single currency has become closer to its fair value. The commodity currencies such as Australian, Canadian and New Zealand’s dollars, on the contrary, seem to be expensive though they keep getting support from the improving terms of trade. The most important question here is whether high commodity prices and strong export demand from Asia are structural or only cyclical factors. RBS analysts think that in the longer term, if the world’s economic recovery gains pace pound will rise to the fair value versus commodity currencies. In the near future, however, state of the global economy is too uncertain and unsustainable for buying sterling. Chart. Daily GBP/AUD Comment here http://www.fbs.com/analytics/news_markets/view/8065

"Commezbank: comments on EUR/GBP"(2011-07-21) Technical analysts at Commezbank believe that as the single currency didn’t manage to overcome the 55-day MA at 0.8827 trading versus the British pound, it will decline to 0.8712 and 0.8700. If the pair EUR/GBP gets even lower, it will be poised down to the 200-day MA at 0.8666. Chart. Daily EUR/GBP Comment here http://www.fbs.com/analytics/news_markets/view/8063

"Capital Economics: debt crisis affects European economy"(2011-07-21) There was a bunch of economic activity indicators released today in China and Europe. PMI figures for France, Germany and the euro area as a whole turned out to be rather negative. HSBC'S Chinese PMI showed that China's factory sector contracted in July for the first time in a year and at its fastest pace since March 2009. It happened due to the nation’s monetary policy tightening and low demand in the world. The flash services PMI dropped from 53.7 in June to 51.4 in July, the minimal levels since September 2009. The reading turned out to be below the expectations of 53.0. The flash manufacturing PMI fell from 52.0 in June to 50.4 in July, also the minimal level since September 2009, below the forecast level of 51.5. Analysts at Capital Economics note that the decline of the European indicators may mean that the debt crisis begins weighting on the region’s economic recovery. Comment here http://www.fbs.com/analytics/news_markets/view/8061