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"Gaitame.com: comments on GBP/USD"(2011-05-20) Technical analysts at Gaitame.com Research Institute expect British pound to drop to the minimum since April 1. The specialists claim that the trend line from January 7 to March 28 minimum might have limited sterling’s upward momentum as it went lower. Moreover, Gaitame.com underlines that the pair GBP/USD is currently below its 20- and 60-day MA. As a result, the analysts conclude that bullish trend is wearing off and the pound will get weaker for some time. According to Gaitame.com’s forecast, GBP/USD may fall to the $1.6065 level that’s situated on the trend line that connects December 28 and 29 minimums. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/7354

"Commerzbank: comments on USD/JPYs"(2011-05-20) Technical analysts at Commerzbank note that the greenback is testing Fibonacci resistance at 81.85 trading versus Japanese yen. In their view, the pair USD/JPY will be limited on the upside the 100-day MA at 82.25. The specialists are looking for dollar’s consolidation ahead the next move up to 200-day MA at 82.77. If US currency manages to rise above this level, it will be poised up to the key resistance of the 4-year downtrend at 84.49. According to the bank, if the pair declines, it will meet support at 80.98, 80.15 and the recent minimum of 79.55. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7351

"Japan’s economy contracts: analysts’ comments"(2011-05-19) According to the data released today, Japan’s GDP showed in the first 3 months of the year annual drop of 3.7% (-0.9% from the previous quarter) after losing 3% in the final quarter of 2010, while the economists were looking forward only to 1.9% decline. Analysts at Mizuho Securities warn that the second quarter slump may be even greater as consumer spending and exports contract. In their view, in the third quarter Japanese economy may start recovering helped by the fixing of the supply-chain disruption and the beginning of reconstruction process. Specialists at Daiwa Institute of Research claim that even though Japan’s economy may begin rebounding in the fourth quarter, it will fall by 0.4-0.5% in the fiscal year ending March 2012. Economists at RBS Securities note that Japanese companies that have seriously suffered after the earthquake won’t be much eager to increase business spending as the situation remains too uncertain. Analysts at Barclays Capital are looking forward to see a V-shaped recovery in Japan in the period from July to September and afterwards driven by the self-sustaining recovery in production, an increase in government consumption and reconstruction. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7339

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"Analysts about the prospects of Greece’s debt restructuring"(2011-05-18) The advance of the pair EUR/USD was limited as the European finance ministers admitted yesterday that there’s a possibility that Greece may have to restructure its debt. Economists at SEB believe that if Greece is allowed to restructure one way or another, the single currency will get under severe pressure as the haircut may undermine investors’ confidence in the euro area. The specialists say that the market players will soon start doubting about how sensible is it to keep holding euro longs. If the restructuring path is, nevertheless, chosen, there are different views on how intense this process should be. Strategists at ING claim that in order to keep Greece’s debt/GDP ratio sustainable the nation will need to restructure at least 30% of its debt. Greek 10-year bonds yield reached 15.495%. Analysts at Credit Suisse say that the situation in Spain and Italy will remain stable if Greek restructuring involves only maturity extension. At the same time, forced restructuring with principal sums reduction is likely to increase systemic risk threatening other peripheral European nations. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7333

"Moody's downgraded major Australian banks"(2011-05-18) Moody's Investors Service cut the ratings of Australia's big-four banks from Aa1 to Aa2. These banks are Westpac Banking Corp., Australia and New Zealand Banking Group Ltd., National Australia Bank and the Commonwealth Bank of Australia. The pair AUD/USD declined on the news easing down from today’s maximum at 1.0665 to the levels in the 1.6000 area. However, the analysts weren’t concerned much by Moody's move. Economists at Westpac note that the ratings agency has brought its estimate of Australia’s major banks in line with S&P and Fitch ratings. Strategists at RBS note that Moody's should have made this 2 years ago. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/7331

"Mizuho: comments on USD/JPY"(2011-05-18) The pair USD/JPY went down from 2-week maximum at 81.77 reached on Tuesday. Technical analysts at Mizuho Corporate Bank claim that dollar’s advance during the last 8 days was an inverted “flag” and that small “spike high” versus Japanese yen made yesterday may be regarded as the new interim maximum. The specialists expect the greenback to fall below 9-day MA at 80.92 retesting this week support at 80.00. According to the bank, it’s necessary to sell US currency at 81.50 stopping above 81.80 and taking profit at 80.35. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7329

"Commerzbank: negative outlook for EUR/USD"(2011-05-18) Technical analysts at Commerzbank are bearish on EUR/USD. In their view, the single currency is on its way down to 1.3998 (200-week MA), 1.3770 and then to 1.3431/1.3375 (55-week MA and 11-month support). The specialists claim that some bounces of euro are possible, but they won’t be of great significance to the general negative picture. According to the bank, upward moves will be limited by the resistance of 1.4225/65 and 1.4341. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7327

"J.P. Morgan: how to choose a safe haven currency"(2011-05-18) Currency strategists at J.P. Morgan Asset Management give market players some advises on how to choose a safe haven currency. According to the specialists, it’s necessary to focus on 3 main features. Firstly, this should be a currency of the country with small current account deficit or surplus as % of GDP. A surplus means the country does not require net capital inflows to offset trade-account outflows. Examples: most emerging Asian countries, Switzerland, Norway. Secondly, safe havens are usually low-yield currencies: when the risk sentiment is on investors tend to borrow in low-yielding currencies to buy higher-yielding ones; when the market’s risk aversion strengthens and the carry trade isn’t used, demand for the low yielders, on the contrary, increases. The last but not the least is that, refuge currencies tend to be liquid. So, speaking about the greenback, it’s possible to say that though it doesn’t suit the first condition – no need to remind how huge US current account deficit is – it has low yields and very liquid bond market that seems enough for it to be bought during risk-off time except the moments when risk aversion is the result of high oil prices. Swiss franc is a great save haven especially when the concerns about the euro zone crisis arise. Yen is also in the list, though it’s necessary to be careful about Japan’s debt dynamics and finding the right entry point taking into account its recent strength. Among the emerging Asian currencies other than Indian J.P. Morgan prefers Chinese yuan and Singapore dollar. Finally, the specialists mention Norwegian krone that’s connected to oil, but enjoys strong safe-haven fundamentals. The economists at Deutsche Bank think that the end of the Federal Reserve’s QE2 in June will mark the shift in risk sentiment towards its deterioration. Comment here http://www.fbs.com/analytics/news_markets/view/7325

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"UBS: EUR/USD may go down to $1.39"(2011-05-16) Technical analysts at UBS claim that the outlook for the single currency against US dollar will remain negative as long as it’s trading below resistance at 1.4340. In their view, the pair EUR/USD is poised down to 1.4021 and 1.3903. As for the longer term, the specialists expect the greenback to rebound ahead of the end of the Fed's QE2 program in June. According to UBS, investors have already begun unwinding significant short positions on US dollar. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7304

"BMO Capital Markets: USD/CAD is likely to rise"(2011-05-16) Canadian dollar declined versus its US counterpart from maximum of 0.9445 hit on May 2 to 0.9769 today. The pair USD/CAD managed to break above the 9-month bearish trend line at 0.9758. Currency strategists at BMO Capital Markets claim that if the greenback closes the day above this level, the short-term trend will reverse upwards within the longer-term downtrend from October. The specialists expect that the greenback will firstly consolidate at the current levels or even pull lower before the next upward move. In their view, the pair may climb to 0.9915/1.0060. Chart. Daily USD/CAD Comment here http://www.fbs.com/analytics/news_markets/view/7301

"Analysts about the prospects of British economy and pound’s rate"(2011-05-16) British pound was the worst-performer after the greenback during the past 3 month. Sterling is at 35-year minimum versus the currency basket (Bloomberg Correlation-Weighted Indexes) as slowing growth forces the Bank of England to keep the borrowing costs low while inflation keeps rising. Currency strategists at Lloyds Bank Corporate Markets claim that the main effect of the UK austerity measures will be seen during the next 2 quarters. The specialists think that the Bank of England would prefer the pound to stay weak. On the other hand, despite the fact that spending cuts will likely affect the nation’s economic growth, they reduce the risk associated with investing in the UK as the ratings agencies and investors see that British authorities do their best to cut the budget deficit. Analysts at Barclays currently regard sterling as one of the weakest currencies. Low GBP may be explained by very low real interest rates in the UK, so if the rates go up, so will the pound. According to the bank, pound will advance to 80 pence per euro in a year and to $1.72 in 3 months and $1.80 in 12 month. The economists are looking forward to 2 BoE rate hikes this year. Analysts at Mizuho Corporate Bank, on the contrary, claim that monetary tightening at the time of severe fiscal tightening will cause the disaster. In their view, higher rates in such case won’t encourage pound’s appreciation. British authorities are planning to decrease the budget deficit from 9.6% of GDP in the year through March 2011 to 2.5% of GDP by 2015. Chart. Daily EUR/GBP Comment here http://www.fbs.com/analytics/news_markets/view/7299

"Euro area: important decisions on the agenda"(2011-05-16) The situation around Greece is getting tenser. Today the country will ask the EU and the IMF to increase 110 billion-euro ($155 billion) bailout it got last year or give it more time to repay official loans. The problem is that Europe’s donor countries, primarily Germany, demand that in return Greece should deepen austerity measures. Things got more complicated from the political point of view due to the scandal with IMF Managing Director Dominique Strauss-Kahn who was arrested in the United States for the sexual assault. Strauss-Kahn used to be French finance minister and it was widely thought that he will call for helping the euro area. According to the European Commission forecasts, in Greece’s 2011 budget deficit will be equal to 9.5% of GDP that exceeds 7.4% target established last year. The pair EUR/USD fell to the minimal level since March at 1.4047. Analysts at BMO Capital advise to sell euro versus the greenback at $1.41 stopping at $1.4210 and taking profit at $1.3450. In addition, there are other two important questions for the European finance ministers to decide today – the approval of 78 billion-euro aid package to Portugal and the nomination of Bank of Italy Governor Mario Draghi as the candidate for the post of the ECB president. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7292

"Commerzbank: comments on EUR/USD"(2011-05-16) The single currency declined on Friday versus the greenback breaching support in the 1.4145/55 area. Technical analysts at Commerzbank think that the pair EUR/USD will drop this week to the 200-week MA at 1.3998 and then fall to 1.3770 and 1.3431/1.3375 (55-week MA and 11-month support). According to the bank, resistance levels for euro will be found at 1.4260/70 and 1.4341. If the European currency closes below the 55-day MA at 1.4270, the outlook will be regarded as quite bearish. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7290

"Ichimoku. Weekly forecast. USD/CHF"(2011-05-16) Weekly USD/CHF On the weekly chart the bulls managed to move even higher: dollar’s rate was growing during the second week in a row. At the same time the prices have reached the resistance of the 9-day MA – Tenkan-sen (1). If the bulls fail to overcome this level and lift up the market, the pair’s advance was just a correction. The bearish Cloud is still wide. The majority of lines are declining (Tenkan, Senkou Span A and . However, Kijun-sen went sideways that gives some hope for an improvement in future. Chart. Weekly USD/CHF Daily USD/CHF The outlook for the pair USD/CHF on the daily chart has significantly improved. On Friday the prices managed to close above the long-term Standard line (1). Tenkan and Kijun went to meet each other preparing the form the “golden cross”. At the same time the Ichimoku Cloud still puts the pair under pressure. We are waiting for signal from the rising Chinkou Span: if it breaks above the price chart, this will mean buying, if it recoils down this will be the bearish signal that the correction is over. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/7282

"Ichimoku. Weekly forecast. USD/JPY"(2011-05-16) Weekly USD/JPY Although the priced have recovered a bit they didn’t manage to return above Tenkan-sen and Kijun-sen that merged together keeping moving horizontally (1) that means that the market has rather strong sideways trend. So, the pair USD/JPY has chance to edge upwards. Chart. Weekly USD/JPY Daily USD/JPY As it was expected, last week the prices were moving inside the Ichimoku Cloud. On Friday the greenback closed below the lower border of Kumo. The narrowing bullish Kimo (3) shows that the powers of bulls are limited. The “dead cross” (4) formed by Tenkan-sen (2) and Kijun-sen (1) remains in place, though as it was formed above the Cloud the signal isn’t very strong. The Turning line (2) will play the role of support. If the prices manage to return inside the Cloud, the bulls will probably manage to rebound the rate. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7281

"Ichimoku. Weekly forecast. GBP/USD"(2011-05-16) Weekly GBP/USD British pound kept declining during the last week: the prices broke down the Turning line (1) that acted as an important support. The next support level is the Standard line. The trend for GBP/USD remains neutral. All lines of the Indicator keep moving horizontally (1, 2, 3, 4). Chart. Weekly GBP/USD Daily GBP/USD On the daily chart the outlook is much more bearish. The prices have already broken down below the longer-term Standard line, while Kijun-sen has crossed Tenkan-sen bottom-up forming the “dead cross” (1). The signal isn’t very strong as the figure is found above the Ichimoku Cloud (2). At the same time, the bullish Cloud remains rather thin. The impulse of the uptrend has weakened: the upper border of Kumo is pointed downwards at rather sharp angle narrowing the range of the Cloud, while Senkou Span B moves horizontally. The selling signal is confirmed by Chinkou Span that broke down the price chart. British pound has approached Senkou Span A. The thin Cloud isn’t able to provide sterling with strong support, so this week’s forecast is negative. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/7280

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"Predict Nonfarm Payrolls"Contest (May 2011) We invite you to take part in analytical predictions contest.In the new contest “Predict NFP”, guess the non-farm payrolls indicator of May 2011 and win an exclusive and stylish T-shirt from FBS.! It’s so simple: write your guess for the non-farm payrolls, which will be published at 12:30 GMT 03.06.11. First one to use the right number or the closest one will be the winner of the contest. Duplicate entries will be disqualified. Enter your guess in the comments following this topic. You may find some tips in our economic calendar: http://www.fbs.com/analytics/economic_calendar Winner will receive a brand T-shirt from the brokerage company FBS. Good luck! You may enter your guesses till 14:00 GMT 03.06.11 in the special topic of our group in Facebook http://www.facebook.com/topic.php?uid=137183862987521&topic=442 We wish all the participants Good Luck! Note: Nonfarm Payrolls - is an influential statistic and economic indicator released as part of a comprehensive report on the state of the labor market. Country: USA Description: The Nonfarm Payrolls measures the change in the number of employed people during the last month of all non-farming businesses. The total non-farm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States. It is the single most important piece of data contained in the employment report, which considered to offer the best overview of the economy. The monthly changes and the revisions in payrolls can be quite volatile. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. Periodicity of release: monthly, on the first Friday of the month at 12:30 GMT. Source: Bureau of Labor Statistics, U.S. Department of Labor.

"HSBC: yuan will become reserve currency in 5-7 years"(2011-05-12) Analysts at HSBC think that in 5-7 years Chinese yuan will become a global reserve currency. In their view, it would happen more due to the growing demand for it than because of the actions of the nation’s authorities and yuan will attain nearly full convertibility. The specialists expect that yuan will be strengthening at the lower pace during the coming years than it has been doing so far. As a result, now it’s necessary to focus attention not on the pace of yuan’s appreciation, but on its internationalization. According to HSBC, within the next 3-5 years China’s rapid economic growth will make yuan one of top three currencies used in global trade. The strategists note that the central banks have to diversify their foreign exchange reserves with multiple currencies, including the CNY, reducing the share of the greenback. Comment here http://www.fbs.com/analytics/news_markets/view/7259

"Commerzbank: comments on EUR/USD"(2011-05-12) The single currency went down below 1.4900 on May 5 renewing the week minimums below 1.4255/70 (55-day MA). Technical analysts at Commerzbank expect the pair EUR/USD to consolidate in the 1.4200 zone. The specialists think that euro is poised for a decline to 1.4145/55 (38.2% retracement of 2011 advance and April 18 minimum). In their view, these levels will manage to constrain the initial attack of the bears. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7257

"RBC: factors influencing Canadian dollar"(2011-05-12) Analysts at Royal Bank of Canada note that Canadian dollar weakened versus US dollar as the data released yesterday showed that US crude oil inventories reached the 2-year maximum making oil price decline, stocks fall and demand for higher-yielding assets shrink. Crude supply in the United States, Canada’s major trading partner, surged during the week before May 6 by 3.78 million barrels to 370.3 million. Trading against the single currency loonie gained on speculation Greece may restructure its debt while Canada’s economy grows stronger. Canada’s payrolls increased by 58,300 in April after 1,500 slide in March, while the unemployment rate unexpectedly dropped from 7.7% to 7.6%. In addition, in March the nation had the strongest trade surplus of C$627 million ($658 million) since November 2008, while the economists surveyed by Bloomberg were looking forward only to C$400 million. The nation’s Finance Minister Jim Flaherty said this week that the strengthening national currency reflects confidence in the Canadian economy and that the government’s goal is not to let extreme currency fluctuations. The pair USD/CAD rose from 0.9445 on May 2 getting above 0.9600. The pair EUR/CAD fell by 1% to the levels in the 1.3652 zone. Chart. Daily USD/CAD Comment here http://www.fbs.com/analytics/news_markets/view/7255

"BMO Capital Markets looks for euro to weaken"(2011-05-12) Currency strategists at BMO Capital Markets claim that the European currency will decline versus the greenback. In their view, European authorities will soon make some announcements about Greece and these announcements won’t be positive for the country. The EU officials are likely to say that the nation has to make more efforts to get the bailout, expects BMO. At the moment the analysts advise investors not to go short on euro directly, but to bet on the Norwegian krone rising versus US dollar. According to BMO Capital Markets, Norway’s economic position is firm: the country’s unemployment is a low 3.1% and its central bank is thought to lift up the rates today. The trade recommendation is to buy krone at 5.5050 stopping at 5.5550 and taking profit at 5.4050. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7253