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"Ichimoku. Weekly forecast. GBP/USD"(2011-04-25) Weekly GBP/USD During the past week the bulls manages to restore their positions reaching the new maximum at 1.6600. All lines of the Indicator are poised upwards (1, 2, 3 and 4). The “golden cross” formed by Tenkan and Kijun (5) above Kumo is still in place. At the same time, taking into account the fact that during almost all the time since the beginning of the year the market was in the 1.6000/6400 area, i5t’s possible to assume that the bears won’t give up without a battle. Chart. Weekly GBP/USD Daily GBP/USD On the daily chart the bulls managed to keep the prices above the Turning line (9-day MA), the “golden cross” is still active. However, all the lines of the indicator turned horizontal (1, 2), while the Cloud’s range is narrowing. As a result, the prices may consolidate this week drifting down towards the Ichimoku Cloud. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/7095

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How to become a real leader in trading – the winners of “999” share their secrets of success! On April 15 the third “999” demo contest was successfully completed. This competition was really the most intensive one if we compare it to all previous contests. 533 traders from the six continents took part in “999”. Till the very end of the contest there was an intrigue: nobody knew who the winner would be, since the gap between the rivals was minimal. As a result, the holders of prize money are: Riyaz Ahmad Khan (India), Irina Zenchenko (Ukraine) and Rohlan Samino (Indonesia). The winners kindly agreed to reveal the secrets of their success, strategies and impressions of “999”. Riyaz Ahmad Khan (I place) Balance: 255502.51 USD Irina Zenchenko (II place)* Balance: 138226.17 USD Rohlan Samino (III place) Balance: 104096.60 USD FBS: How long have you been trading? How has it turned out, that you have got acquainted with exchange trading? R.A.K.: I’ve been trading in Indian national stock exchange for the last 6 years and, by chance, using my net search I got to know about Forex trading. I’ve been learning and trading in Forex for the last 15 months. I started my real account trading with FBS micro account. I opened Welcome Bonus account and even invested my own funds, but I lost because of lack of knowledge. After that I started trading in contests and demo accounts of different brokers. R.S.: I’ve been trading for about 1 year. I learned about Forex from the Web. FBS: What currency pair do you prefer to trade in? Why? R.A.K.: I like EUR/USD, GBP/USD and EUR/JPY, because of their liquidity and volatility. R.S.: I am still a beginner, that’s why I like the EUR / USD. FBS: Tell me, please, about your impressions on participating in «999» contest. R.A.K.: I’ve learned a lot, thanks to this contest, and, as a result, I won. During the contest I created and implemented my own strategies. FBS has a great trading platform for such new babes as I am. R.S.: With “999” contest I tried to test my trading skills. And I managed to trade successfully. FBS: What trading strategy did you use during the contest «999»? What helped you to make decisions? R.A.K..: In the first period of the contest I tried to accumulate and increase my base capital by using both technical and fundamental analysis. On the last step I used scalping and decreased my orders. R.S.: My strategy in «999» contest is «Naked Trading», because I didn’t use indicators. In my opinion, indicators may make you dizzy. FBS: What qualities in your opinion should the trader possess so as to be successful in trading? R.A.K.: In order to be successful, you need to study constantly, create your own strategies and use them with confidence. Money management and patience are the major factors that can affect our trading. R.S.: To be successful in trading you should study and Never Give Up. That’s the guarantee of success. FBS: What could you advise to the traders-beginners? R.A.K.: Trading is not a one-day game. Wait, watch and then implement. Keep patience during trading and take part in contests or try to trade in demo account before any real money investment. And finally, learn, learn and learn. R.S.: I am also still a beginner, but I would advise you not to be afraid of loss. We would like to remind you that the registration for the new “999” Contest will take place from 25.04.11 to 09.05.11 inclusive. The contest starts on May 10. Hurry! Register, take part and win! * Irina Zenchenko has become the winner twice. You may read her interview here: http://www.fbs.com/about/news/6464

"PBOC may let yuan significantly appreciate"(2011-04-22) Wang Yong, a professor at the Chinese central bank’s training center, claims that in order to stem inflation the People’s Bank of China has to widen yuan’s daily trading band, reports Bloomberg. Faster yuan appreciation is a direct and effective way of curbing imported inflation, which tend s to determine the upward dynamics of consumer price. The specialist also said that Chinese government should strengthen supervision of capital flows as yuan gains may also attract hot money boosting liquidity and increasing inflation pressure. Such opinion corresponds to the recent comments of China’s authorities – Premier Wen Jiabao prices and deputy central bank governor Hu Xiaolian – who have both underlined so far that more yuan flexibility would help to fight inflation. The Chinese currency is currently allowed to deviate from a daily reference rate set by the People’s Bank of China by 0.5%. Today’s mid-point for the pair USD/CHY was established at the record minimum of 6.5156. Comment here http://www.fbs.com/analytics/news_markets/view/7089

"Societe Generale: EUR/USD will continue gaining"(2011-04-22) Technical analysts at Societe Generale claim that as the greenback let euro strengthen and consolidate above the resistance at $1.45, US currency may fall to $1.51. According to the specialists, resistance levels for the pair EUR/USD are now found at $1.47 and $1.4830 as euro is poised up to 2009 maximum at $1.5145. US currency is weakening for the fourth day in a row. Yesterday it hit 16-month low at $1.4648 per euro. The bank notes that dollar’s downtrend has begun in June 2010 when it started easing from the maximum of $1.1876. Chart. Weekly EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7086

"Forecasts on British economy, BoE rates and sterling"(2011-04-22) According to the prediction of economists surveyed by Bloomberg News, UK GDP rose by 0.5% in the first 3 month of 2011 after contracting by the same amount in the final quarter of the last year. The data will be released on April 27. Minutes of this month’s Bank of England meeting showed that British policymakers think that the country’s economy is still in a very vulnerable state, so that the rate hike would harm consumer confidence. As a result, analysts at Societe Generale, Barclays Capital, Nomura International, National Australia Bank and Citigroup pushed back forecasts for the first rate increase this year. The pair GBP/USD, however, rose today helped by the encouraging figures published yesterday. Retail sales added 0.2% in March while the analysts were looking forward to 0.5% decline, while the budget deficit turned out to be 18.6 billion pounds versus 20 billion-pound forecast. Strategists at Commerzbank said that the Bank of England will anyway outpace the Fed in raising rates. In the end BoE is expected to lift up the borrowing costs sooner or later, but this year, while the Fed will hike not earlier that in the beginning of 2012. So, the bank thinks that sterling is going to strengthen against the greenback. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/7083

"BNY Mellon about potential Greece’s debt restructuring"(2011-04-22) Analysts at BNY Mellon believe that Greece will soon restructure its debt. In their view, it may happen over the next few weeks. However, the specialists think that this event won’t hit the market as strongly as it’s widely thought now. BNY Mellon believes that the restructuring will consist of the extension of debt maturities accompanied by the reduction in interest rates, so for the country’s creditors all will be going in the least painful way. As a result, the bank claims that euro has even chance to benefit, though if it’s not clear whether the restructuring is really able to solve Greece's financial problems. The results of the latest Reuters poll on the matter show that the majority of surveyed economists expect that Greece would have to restructure its debt during the next 2 years. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7081

"Morgan Stanley: nations will keep diversifying reserves from USD"(2011-04-22) Analysts at Morgan Stanley note that although Standard &Poor's worsened the outlook for US sovereign debt rating, it hasn’t so far affected the greenback’s dynamic. In the longer term, however, S&P's move will encourage the world’s nations to diversify their foreign exchange reserves away from dollars. The specialists underline that that any concrete action of rating agencies may trigger faster reallocation away from the US currency. In the near-term the market’s attention will be focused on the next week's FOMC meeting, though it’s useless to wait for the hints on of when the policy tightening is finally going to start. The bank also says that dollar will remain a funding currency until the Fed begins quitting its extraordinarily loose monetary policy. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7079

"Mizuho, Okasan expect USD/JPY to move down"(2011-04-22) Analysts at Mizuho Corporate Bank expect the greenback to lose grounds to Japanese yen as soon as the next week. In their view, the market will once again start talking about the potential intervention of Japan’s Ministry of Finance. The specialists say that US dollar bulls will be disappointed after the FOMC meeting scheduled on Tuesday-Wednesday. Taking into account rather modest US recent economic data it’s possible to assume that the Fed’s Chairman Ban Bernanke may sound rather dovish, so US monetary authorities will likely refrain from tightening during the rest of the year. So, the pair USD/JPY may fall to 80.00, believes Mizuho. Strategists at Okasan Securities believe that USD/JPY may fall below 81.00 in the near term as many investors may get rid of their long positions on USD ahead of the Easter weekend as there's some risk that China will let yuan appreciate against the greenback in order to stem rising inflation. According to Okasan Securities, weaker USD/CNY will put US dollar under pressure against versus currencies. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7077

"Commerzbank: negative outlook for USD/CHF"(2011-04-21) US dollar tried to recover versus Swiss franc in the first part of the week but failed in the 0.9000 resistance area. Then the pair USD/CHF renewed the record minimum falling below the previous absolute low at 0.8884 hit on March 16 to 0.8810. Technical analysts at Commerzbank say that the pair’s rate fell due to the broad weakness of American currency. In their view, the greenback is likely to fall to the base of the 5-month downtrend channel at 0.8730. According to the bank, any attempts of the bulls to improve the current state of things will be limited by 0.9017 and 0.9167 (2-month downtrend). As long as USD/CHF is trading below these levels, the outlook for it will remain negative. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/7070

"Rabobank: market underestimates debt risk in US and Japan"(2011-04-21) Strategists at Rabobank International believe that the financial markets underestimate the degree of the sovereign-debt crises risk in the United States and Japan. Bloomberg cites the Rabobank’s sovereign vulnerability index in comparison with the ranking based on the credit-default swaps: CDS Spread Ranking Rabobank Index Greece 1 1 Japan 7 2 Portugal 3 3 Ireland 2 4 U.S. 11 5 Italy 6 6 Spain 4 7 Belgium 5 8 France 9 9 U.K. 12 10 Austria 8 11 Netherlands 10 12 Australia 12 13 Germany 13 14 Finland 15 15 Denmark 17 16 Switzerland 14 17 Sweden 18 18 It’s easy to see that Rabobank regards Japan as the second most vulnerable economy after Greece that’s not surprising taking into account the fact that the country’s external debt accounts for more that 200% of its GDP. The market, however, puts the Asian nation only at the seventh place as the second position is occupied by Ireland which is followed by other euro zone members – Portugal, Spain and Belgium. According to the bank, large structural deficit of the United States makes it riskier than Spain and Italy. The analysts think investors should be less concerned about the situation in Europe. It’s necessary to note that Rabobank index is based on eight indicators: interest-growth differential, cyclically-adjusted primary budget balance, interest payments, and weighted average years to maturity, net public debt, external debt, current account balance and World Bank governance indicator. Comment here http://www.fbs.com/analytics/news_markets/view/7069

"RBC: assumptions on Greek debt restructuring"(2011-04-21) Analysts at Royal Bank of Canada claim that Greek debt restructuring would most likely consist of maturity extensions and the coupon payments’ reductions. In their view, the primary goal of this process will be to reduce redemptions in 2013-2016 to less than 10 billion euro a year. In order to accomplish that the country will need the agreement of the International Monetary Fund, the European Union and European Central Bank that hold around 28% of outstanding Greek debt. According to RBC, the unilateral forced restructuring by Greek authorities or a negotiated restructuring with significant reductions in principal repayments would be too tough for Greek and European banking systems. The bank specialists believe that Greece’s authorities have to incite the national bank to agree to restructure their debts in return for recapitalization, possibly with the funds provided by the EU. Greece’s 2-year bond yields rose above 20%, while the 10-year yields approached 15%, reports Bloomberg. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7067

"Aussie renewed maximums versus the greenback"(2011-04-21) Australian dollar rose to the record maximum versus the greenback above $0.7000. There were many factors that had positive impact on the currency. Firstly, investors’ risk appetite was encouraged by US the advance of stocks. Then the interest rate advantage is still in favor of Australia: the RBA benchmark rate is at 4.75%, while the Fed and the BOJ keep the borrowing costs at the record low, close to zero. In addition, according to the data released today, Australian producer prices added 1.2% (q/q) the first quarter in comparison with the last 3 months of 2010 when they rose only by 0.1%. The country’s Foreign Minister Kevin Rudd claimed yesterday that Australia won’t “manipulate” the national currency ruling out the intervention prospects. The pair AUD/USD gained 16% during the past year due to the high revenues from coal and iron ore exports to China, hurting though such spheres as tourism, manufacturing and education. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/7064

"Commerzbank: EUR/USD on its way to 1.5145/50"(2011-04-21) The single currency advanced from the week’s minimums in the 1.4150 area overcoming the key resistance in the 1.4535 area (1995 maximum) and getting above 1.4600. Technical analysts at Commerzbank believe that the pair EUR/USD is on its way to 1.5145/50. If euro manages to close the week above 1.4535, the positive outlook for the currency will be confirmed. Resistance for EUR/USD is provided by the upper border of the 2-month uptrend channel at 1.4660. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7062

"Sumitomo: long-term forecast for USD/JPY"(2011-04-21) Analysts at Sumitomo Life Insurance believe that the pair USD/JPY will once again drop below 80 yen in the first quarter of the next year. In their view, currency interventions didn’t put an end to yen’s strengthening. At the same time, the specialists underline that this move will be the final round of the currency’s appreciation. Sumitomo forecasts that during the next few years the greenback will be able to climb to 120 yen. American currency will get support from the US economic rebound and Federal Reserve's policy normalization that, in its turn, will widen the gap between Japanese and US interest rates. Chart. Weekly USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7060

"Scotia Capital: dollar still has potential for decline"(2011-04-21) Currency strategists at Scotia Capital note that there are a lot of US dollar bears at the market. The greenback is losing both versus the commodity currencies (Australian dollar reached 29-year maximum above 1.7000) and the safe havens (see the pair USD/CHF that renewed the absolute minimum at 0.8850). The specialists say that the purchasing power parity analysis shows that some major currencies are significantly overbought: Aussie, for instance, is overvalued by 34%, Swiss franc – by 28%, euro – by 22% and the Canadian dollar – by 21%. According to Scotia Capital, this data should with no doubt be taken into account. The analysts note, however, that currencies can trade at overvalued levels during some time, especially taking into account the Fed’s loose monetary policy and Standard & Poor's negative outlook for US debt. As for the short term trade, the relative strength index (RSI) shows that no major currency is overvalued, so investors may keep selling dollar looking for its counterparts to set new highs. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/7058

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"BayernLB: comments on EUR/CHF"(2011-04-20) Analysts at Zuercher Kantonalbank claim that the single currency has left the uptrend channel trading versus Swiss franc, so it needs to rise above 1.2960 in order to get chance to keep strengthening. If euro succeeds, it will be able to climb to 1.3075. Specialists at BayernLB note, however, that though franc fell to 1.2930 as the investors’ risk aversion eased, it may be hard for the pair EUR/CHF to overcome 1.30 and hold above this taking into account the continuing uncertainty about the euro area’s debt crisis. Chart. H4 EUR/CHF Comment here http://www.fbs.com/analytics/news_markets/view/7044

"Standard Life Investments: ECB too hastened to raise rates"(2011-04-20) Analysts at Standard Life Investments claim that the European Central Bank has lifted up rates too soon as the euro zone nations are struggling with the debt crisis (ECB benchmark rate was increased by 25 basis points on April 7 to 1.25% level as a measure counter inflation that rose to 2.7% in March). In their view, the single currency may fall versus the greenback at least by 16% dropping to the pair value in the $1.20/1.25 area. The economists believe that by the end the downtrend of the pair EUR/USD will become evident. The specialists warn that the ECB’s restrictive monetary policy doesn’t correspond to the region’s financial state that is far from well. According to Standard Life Investments, there’s the risk that the ECB may raise the borrowing costs by more than is justified by the outlook for the economy and inflation, and then be forced to cut rates again. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7042

"BNY Mellon: US default is impossible"(2011-04-20) Currency strategists at BNY Mellon claim that the S&P’s decision to reduce US credit outlook to negative was very timely as the country’s debt and deficit have reached critical levels and American policymakers needed some shake-up. The specialists note that dollar managed to gain ground on this news rather than decline as the announcement caused the revises of the myriads of risks and when the market goes risk averse dollar tends to strengthen. Of course, the issue of possible US downgrade has to be considered, but there’s no chance that the United States is ever going to default. In the euro area, on the other hand, this may really happen. The bank says that although US can be downgraded in a couple of years, US represents the best bet in the modern world as it’s the biggest and deepest liquid market. On the other hand, it will be quite difficult to invest in the euro zone, the second largest market, due to the sovereign debt problems. According to BNY Mellon, the US probably doesn’t deserve its AAA status but it wins in the battle for investors compared with the other world. The analysts don’t think that US debt concerns will surpass those of the euro area. It’s necessary to understand that America can always print more money, so the point of default is never going to come. In the short-term of 6-8 months the specialists expect strong dollar as it will be risk-off, but in the longer term, if the solution is to print more cash, the greenback will be weak as it has been during the last decade. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7040

"John Taylor: EUR/USD will be rising 3-4 months more"(2011-04-20) John Taylor, chairman and founder of FX Concepts, the world’s largest currency hedge fund, claims that the single currency has another 3 or 4 months to rally versus the greenback. Like many other economists Taylor thinks that euro will continue getting support from the widening interest rate differential as the European Central Bank is expected to keep tightening, while the Federal Reserve will likely stay on hold. The specialist notes that in Europe the Southern nations are in recession, while German economy is powering ahead, so Germany ought to have 5-6% rates, while the Southern Europe needs 0% borrowing costs. According to Taylor, the ECB one-size-fits-all monetary policy is a real problem for the region. Taylor says that the Eastern European currencies – Hungary’s, Romania’s and Turkish – as well as Australian and New Zealand’s dollars will outperform euro. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/7038

"Sumitomo Mitsui: S&P’s move will affect Japan"(2011-04-19) Poor’s had warned in February that it might revise its US outlook and so Monday's move was not really surprising. Sumitomo Mitsui believes that S&P may cut US credit rating in the next 3 months. The analysts claim that S&P’s decision means that there is now a scar on the once impeccable credibility of US bonds and could have negative consequences for Japan. This will inevitably weaken the dollar, and as a result will lead to yen’s appreciation. At the same time strong national currency is the last thing Japan needs now when it seeks funds for massive post-tsunami reconstruction. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7035

"S&P reduced the outlook for US credit rating"(2011-04-19) Japan’s Finance Minister Yoshihiko Noda claimed that despite the fact that Standard & Poor’s decreased the outlook for US’s AAA credit rating to “negative” the country’s authorities keep regarding US debt as an attractive investment destination. According to Noda, Treasuries would still be extremely good-quality securities even if the grade was lowered. Such comments of Japanese officials are logical as Japan is the world’s second-largest holder of US Treasuries after China. In February the nation’s investments in US debt accounted for $890.3 billion. It’s necessary to remember that in January Japan’s rating was cut by S&P to AA-. Japan is the most indebted developed nation with its debt-to-GDP ratio over 200%. As a result, to pay for the economic reconstruction after the devastating earthquake that took place on March 11 the country’s policymakers may be forced to increase taxes. Comment here http://www.fbs.com/analytics/news_markets/view/7033

"Rabobank: yen seems to have enough support"(2011-04-19) Currency strategists at Rabobank note that since the beginning of 2011 there’s strong correlation between the USD/JPY dynamics and the performance of the DJIA. The specialists point out that although the fundamentals hint at weaker yen that will be the case only as long as the market’s risk sentiment is positive. As a result, Japanese yen is going to be supported for now. The pair USD/JPY is staying today within the narrow range. According to the bank, investors have calmed down ahead of the appearance of some new drivers. In addition, the trade volumes will likely ease ahead of the Easter holidays (watch the Holiday schedules). Chart. H4 USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/7029

"S&P reduced the outlook for US credit rating"(2011-04-19) Standard & Poor’s changed the outlook for US AAA credit rating to negative that means that the debt of the world’s largest economy may be downgraded. To avoid this undesirable fate American officials have develop a plan to reduce by 2013 budget deficits and the huge national debt that’s complicated by the tensions between the Democrats and the Republicans. The agency estimates the possibility of the US rating reduction during the next 2 years as one-in-three. According to S&P, eventually Congress and the Obama administration are likely to reach agreement. S&P forecasts US debt to reach 84% of GDP by 2013. Obama has proposed to cut cumulative deficits by $4 trillion within 12 years through the combination of spending cuts and tax increases. US Republicans insist on the 10-year term. Analysts at Bank of Tokyo-Mitsubishi UFJ note that the United States still has the strongest, deepest, most-liquid markets in the world, so investors actually have no alternatives. Economists at Goldman Sachs say that it’s common knowledge that US fiscal situation is unsustainable unless a large, multiyear fiscal tightening is implemented. In their view, the S&P report contained nothing new on the matter. All in all, US policymakers got an important warning that they should hurry with developing the shortfall reduction process. As a result, the shift in the credit outlook should be regarded more as an attempt to urge the resolution of internal American problems than the revision the global debt market foundation. Comment here http://www.fbs.com/analytics/news_markets/view/7027