OctaFX_Farid Posted November 26, 2012 Author Share Posted November 26, 2012 OctaFX.Com -Forex Strategy: US Dollar and Japanese Yen Weakness Likely The US Dollar has traded to fresh monthly lows against the Euro and other key currencies, while the Japanese Yen trades beyond major support levels. Extremely low forex options market volatility expectations support the case for further JPY and USD weakness. DailyFX PLUS System Trading Signals –The US Dollar (ticker: USDOLLAR) trades at fresh monthly lows against all except the similarly weak Japanese Yen – we see scope for further USD and JPY lows. Pronounced downtrends in the US Dollar and Japanese Yen have made for powerful trend trading through recent price action, and we see scope for continued outperformance in several trend trading strategies. The Euro trades at fresh monthly highs against the US Dollar and 7-month peaks against the Japanese Yen. The trend is up until it isn’t, and we won’t go against the recent EURUSD and EURJPY uptrends unless (USD and JPY downtrends) until there are real signs of capitulation. In the meantime our trend-based “Tidal Shift/Momentum2” trading system remains our preferred strategy across a range of USD and JPY pairs. The probabilities of an important USD and JPY reversal have clearly grown as both currency have fallen sharply from recent peaks; further bets on continued weakness are clearly risky. Yet we see few important signs of capitulation, and indeed we would argue that buying into US Dollar and Japanese Yen weakness seems far more risky. Seasonal trends show that the end of the month/beginning of the new trading month can often bring changes in trend. But we’ll need to see real signs of reversal before advocating a shift in general trading bias. DailyFX Individual Currency Pair Conditions and Trading Strategy Bias Market Conditions: The US Dollar has traded to fresh monthly lows amidst exceedingly low FX market volatility. Any important reversals for the safe-haven US currency may need to wait for a similarly significant shift in market conditions. FX options continue to show the lowest volatility expectations since 2007—arguably supporting further USD and JPY weakness. Nov 26, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 26, 2012 Author Share Posted November 26, 2012 OctaFX.Com -Forex Strategy: US Dollar and Japanese Yen Weakness Likely The US Dollar has traded to fresh monthly lows against the Euro and other key currencies, while the Japanese Yen trades beyond major support levels. Extremely low forex options market volatility expectations support the case for further JPY and USD weakness. DailyFX PLUS System Trading Signals –The US Dollar (ticker: USDOLLAR) trades at fresh monthly lows against all except the similarly weak Japanese Yen – we see scope for further USD and JPY lows. Pronounced downtrends in the US Dollar and Japanese Yen have made for powerful trend trading through recent price action, and we see scope for continued outperformance in several trend trading strategies. The Euro trades at fresh monthly highs against the US Dollar and 7-month peaks against the Japanese Yen. The trend is up until it isn’t, and we won’t go against the recent EURUSD and EURJPY uptrends unless (USD and JPY downtrends) until there are real signs of capitulation. In the meantime our trend-based “Tidal Shift/Momentum2” trading system remains our preferred strategy across a range of USD and JPY pairs. The probabilities of an important USD and JPY reversal have clearly grown as both currency have fallen sharply from recent peaks; further bets on continued weakness are clearly risky. Yet we see few important signs of capitulation, and indeed we would argue that buying into US Dollar and Japanese Yen weakness seems far more risky. Seasonal trends show that the end of the month/beginning of the new trading month can often bring changes in trend. But we’ll need to see real signs of reversal before advocating a shift in general trading bias. DailyFX Individual Currency Pair Conditions and Trading Strategy Bias Market Conditions: The US Dollar has traded to fresh monthly lows amidst exceedingly low FX market volatility. Any important reversals for the safe-haven US currency may need to wait for a similarly significant shift in market conditions. FX options continue to show the lowest volatility expectations since 2007—arguably supporting further USD and JPY weakness. Nov 26, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 27, 2012 Author Share Posted November 27, 2012 OctaFX.Com - Forex Analysis: S&P 500 Chart Setup Hints US Dollar Support to Hold THE TAKEAWAY: S&P 500 technical positioning warns of a turn lower ahead, hinting the safe-haven US Dollar may manage to hold up at support and position for recovery. US DOLLAR TECHNICAL ANALYSIS– Prices broke below the 23.6% Fibonacci retracement at 9993 to challenge the bottom of a rising channel set from mid-September (now at 9970). A break below this boundary initially exposes the 38.2% level at 9945. Alternatively, a break back above 9993 aims for the November 16 high at 10071. Daily Chart - Created Using FXCM Marketscope 2.0 S&P 500 TECHNICAL ANALYSIS – Prices are showing a Hanging Man candlestick below resistance at 1408.50, the 50% Fibonacci retracement. This barrier is reinforced by a falling trend line set from mid-October. A turn lower sees initial support at 1392.80, the 38.2% retracement, with a break below that aiming to challenge the 23.6% level at 1373.40. Alternatively, a push above resistance exposes the 1424.90-30.90 area. READ MORE Nov 27, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 27, 2012 Author Share Posted November 27, 2012 OctaFX.Com - Forex News: Euro Fails to Maintain Greece Deal Gains The Europe we saw at the beginning of today’s session was very different than the Europe of yesterday, at least from a trader’s perspective. Per the overnight announcement in forex news sources, Euro-zone leaders came to an agreement on Greece that lowered interest rates, returned some of the money made off of previous loans, and setup the release of the next 34.4 billion Euro aid tranche in December. What we heard from European officials following the announcement was overwhelmingly positive. German Economy Minister Roesler said the Greek Deal is a positive sign for the Euro. EU’s Barroso welcomed the deal, while German FM Westerwelle said the aid plan is a good result that is based on reforms. German lawmakers will vote on the Greek plan on November 29. However, the Euro rally following the news of the Greece deal couldn’t even sustain 1.3000 against the USD, as the key level quickly returned to providing resistance after being briefly broken. To see some of the criticisms of the deal, please look at DailyFX Currency Strategist Ilya Spivak’s Euro Open. The other major piece of news was the appointment of Bank of Canada Governor Mark Carney as the new governor of the Bank of England starting in July. Current BoE Governor King said the UK chose a really outstanding candidate, and Carney is the first foreigner to be chosen for the position. Sterling rallied thirty points higher from 1.6000 following the announcement. Current BoE Governor King was speaking today at an inflation report to the UK parliament. He said that the BoE outlook is for a slow economic recovery, and UK inflation to remain above target for some time. The UK GDP grew 1% in Q3 according to a second estimate released today. The BoE has previously said that the sudden growth was due to one time factors and the economy may slip back into negative growth during Q4. Also today, the US Dollar rose a bit when Fed member Fisher said during a speech in Berlin that he advocates setting limits to QE as soon as the next meeting. Fisher said that the US’s biggest problem is unemployment and that inflation is under control in the US. He also said that he was never in favor of operation twist. The Euro has now erased all of the gains following the Greece announcement and is trading slight above 1.2950 against the US Dollar in currency markets. Resistance could now be provided by the key 1.3000 line, and support could be provided at the recent support level of 1.2824. EURUSD Daily: November 27, 2012 Nov 27, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 27, 2012 Author Share Posted November 27, 2012 OctaFX.Com - Forex Analysis: US Dollar Classic Technical Report 11.27.2012 Prices broke below the 23.6% Fibonacci retracement at 9993 to challenge the bottom of a rising channel set from mid-September (now at 9970). A break below this boundary initially exposes the 38.2% level at 9945. Alternatively, a break back above 9993 aims for the November 16 high at 10071. Nov 27, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 27, 2012 Author Share Posted November 27, 2012 OctaFX.Com - Forex Analysis: NZD/USD Classic Technical Report 11.27.2012 Prices are testing resistance at the underside of a previously broken rising channel set from late May (0.8264).A push above that targets a falling trend line at 0.8292. Initial support lines up in the 0.8051-82 area, with a drop below that exposing the 0.80 figure and the 50% Fibonacci retracement at 0.7962. Daily Chart - Created Using FXCM Marketscope 2.0 Nov 27, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 28, 2012 Author Share Posted November 28, 2012 OctaFX.Com -Forex Analysis: Euro May Fall as Soft German CPI Drives ECB Easing Bets The Euro may face further selling pressure as German inflation slows to the weakest in four months, driving ECB monetary easing expectations. Talking Points Japanese Yen Gains as Asian Stocks Drop on Greece Deal Rethink, “Fiscal Cliff” Jitters Euro May See Selling Pressure as German CPI Drop Drives ECB Easing Expectations US Home Sales, Beige Book May Buoy Dollar vs. Yen, Drive Weakness vs. Comm Bloc The Japanese Yen outperformed in overnight trade as a drop in Asian stocks drove demand for the regional safe-haven currency. The MSCI Asia Pacific benchmark index lost 0.5 percent, with the newswires citing ominous comments from the OECD warning a global recession could follow a failure to avert the US fiscal cliff as the catalyst. A reconsideration of yesterday’s Eurogroup summit outcome likely added to negative cues. A knee-jerk reaction to the headline claiming a deal on Greece had been reached buoyed risk appetite yesterday but sentiment was quick to unravel as markets digested the details of the arrangement, as expected. Indeed, the Euro lagged its top counterparts in Asian hours. Looking ahead, the preliminary set of November’s German CPI figures headlines the calendar. Expectations call for the headline inflation rate to drop to 1.9 percent, the lowest in four months. The outcome may weigh on the Euro as forex traders take softening price pressure to mean the ECB has added room for further easing amid signs of deepening recessionin the wake of deteriorating economic data (particularly the recent run of region-wide PMI figures). Later in the day, the spotlight turns to the Federal Reserve Beige Book survey of regional economic conditions. Separately, US New Home Sales are expected to hit 390,000 in October, marking the highest reading since April 2010. Signs of firming recovery in the US may prove supportive yields and boost the US Dollar against the Japanese Yen while weighing on the greenback against the growth-geared commodity bloc currencies (Australian, Canadian and New Zealand Dollars). Nov 28, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 28, 2012 Author Share Posted November 28, 2012 OctaFX.Com - Forex News: Euro Trading Steady Above 1.2900 Ahead of German Inflation Now that more than 24 hours have passed since the Greece bailout agreement, most of the responding chatter has already been exhausted, and we have been left in today’s European session without a major fundamental story to guide trading. The major story currently affecting asset markets is the impending US fiscal cliff, and Harry Reid’s comments, that not much progress on a deal has been made, sent US equities lower in yesterday’s session. Furthermore, despite the lack of an upcoming major market moving event, a lot of analysts are calling for a reversal of recent Euro gains, as EURUSD trading showed a false break of 1.3000 in yesterday’s session. DailyFX Currency Strategist Ilya Spivak said he continues to hold the pair short, and Chief Strategist John Kicklighter said in his daily market wrap-up that he initiated a EURJPY short. The only European data release that could possibly affect trading is the German inflation for November; the average expectation among Bloomberg surveyed analysts is for a 1.9% annual rise in consumer prices. Also, there has been some small amounts of chatter in today’s session about the Greece deal. ECB member Nowotny said that the agreement was the best of all alternative solutions. Nowotny said that there are no ideal solutions for Greece and that a debt cut is not on the table anymore. He also remarked that Greece has implemented massive reforms, but it is still not enough. Additionally we heard a prediction from the Bank of Spain that data indicates that the Spanish GDP will continue to fall in Q4, and that ECB measures are starting to wear out. France Finance Minister Moscovici said that the French GDP will rise by 0.8% in 2013. In England, MPC member Bean said the Bank of England hasn’t shut the door on further quantitative easing and that uncertainty is limiting stimulus effectiveness. The Euro is currently trading above 1.2900 against the US Dollar in forex markets. Resistance might continue to be provided by the key 1.3000 line, and support could be provided by a previous support line around 1.2824. EURUSD Daily: November 28, 2012 Nov 28, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 28, 2012 Author Share Posted November 28, 2012 OctaFX.Com - Banks see decline in profits from currency trading, WSJ reports The banking industry is seeing a significant decline in profits from currency trading, as once-lucrative businesses are eroded by electronic trading and the proliferation of new platforms, reports the Wall Street Journal. Nov 28, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 28, 2012 Author Share Posted November 28, 2012 OctaFX.Com - Forex: Euro Looks Lower Amid Bets For Further Greek Aid- Eyes 1.2650 Talking Points Euro: Germany To Vote On Greek Deal, Schaeuble Sees Further Assistance British Pound: BoE Keeps Door Open For More QE Amid Ongoing Slack U.S. Dollar: Benefits From Risk Aversion, Fed’s Beige Book In Focus Euro: Germany To Vote On Greek Deal, Schaeuble Sees Further Assistance The EURUSD weakened to an overnight low of 1.2880 as German Finance Minister Wolfgang Schaeuble kept the door open to provide further support for Greece, but the reactionary approach in dealing with the debt crisis may continue to dampen the appeal of the single currency as the governments operating under the monetary union become increasingly reliant on external assistance. As the Bundestag, Germany’s lower house, prepares to vote on the new aid package for Greece, Mr. Schaeuble showed a greater willingness to shore up the periphery country as long as the coalition government continues to meet all of its obligations, but we may see the EU put increased pressure on the European Central Bank (ECB) to ease monetary policy further as the debt crisis drags on the real economy. The Bank of Spain warned that the extraordinary efforts taken by the ECB ‘has started to show some symptoms of wearing out’ as the periphery countries struggle to get their house in order, and we should see the Governing Council carry its easing cycle into the following year in order to tackle the deepening recession. As the ECB stands ready to implement the Outright Monetary Transactions (OMT), the weakening outlook for growth and inflation may prompt the central bank to target the benchmark interest rate in 2013, and we may get some hints for a rate cut at the December 6 meeting as the economic downturn threatens the outlook for price stability. As the EURUSD carves out a lower top ahead of December, the reversal from 1.3007 should gather pace in the days ahead, and the pair looks poised to fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2640-50 as it searches for support. British Pound: BoE Keeps Door Open For More QE Amid Ongoing Slack The British Pound extended the decline from earlier this week, with the GBPUSD slipping to a low of 1.5961, but the recent weakness in the sterling may be short lived as the Bank of England (BoE) looks to carry its wait-and-see approach into the following year. Although the BoE expects inflation to hold above the 2% target over the next two-years, board member Charles Bean argued that the Monetary Policy Committee (MPC) should keep the door open to expand its balance sheet further amid the persistent slack in the real economy. However, above-target inflation may become a pressing concern for the central bank as price growth has held above 2% since 2008, and we may see a growing number of MPC change their tune in 2013 as the U.K. emerges from the double-dip recession. As the GBPUSD appears to be carves out a higher low in November, the rebound from 1.5822 may gather pace going into December, and we are still looking for a run at the 23.6% Fib from the 2009 low to high around 1.6190-1.6200 as the relative strength index breaks out of the bearish trend. U.S. Dollar: Benefits From Risk Aversion, Fed’s Beige Book In Focus The greenback extended the advance from the previous day, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) climbing to a high of 9,998, and the reserve currency may track higher throughout the North American trade as market participants scale back their appetite for risk. As new home sales are expected to increase another 0.3% in October, the budding recovery in the housing market may spark a bullish reaction in the USDOLLAR, but we may see market volatility taper off ahead of the Fed’s Beige Book as market participants weigh the outlook for monetary policy. Indeed, the district banks should continue to highlight a more broad-based recovery in the world’s largest economy, and the report may sap bets for more easing as the recovery gradually gathers pace. Nov 28, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 29, 2012 Author Share Posted November 29, 2012 OctaFX.Com -Forex Analysis: US Dollar Classic Technical Report 11.29.2012 Prices are stalling at the bottom of a rising channel set from mid-September (now at 9971). A break below this boundary initially exposes the 38.2% level at 9945. Near-term resistance lines up at 9993, the 23.6% Fibonacci retracement, with a push above that aiming to challenge the November 16 high at 10071. Daily Chart - Created Using FXCM Marketscope 2.0 Nov 29, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 29, 2012 Author Share Posted November 29, 2012 OctaFX.Com - FOREX Technical Analysis: British Pound Slips in Early Week Trading A EURJPY short was taken last night at 10640 (released via Twitter @JamieSaettele). 10642 is the 61.8% of the decline from 10712 at 10640. Price has extended slightly beyond this level but the stop is above the 11/26 high. Once (if) the market turns lower again, objectives are 10458 and 10375 (former is former resistance and 38.2% of rally from 10031 and latter is middle of former congestion and 50% level). The USDJPY is little changed from yesterday. Near term structure has evolved to the point that the rally into 8221 may compose wave B within the A-B-C corrective decline from 8283. I remain of the mind that the 4th wave of one less degree at 8088-8158 will produce the next low. 8113/16, which the 4th wave terminus (triangle) and 11/15 JS Thrust close, is of specific interest. The AUDJPY is the weakest of the Yen crosses today, although losses are minimal. Risk remains to the downside in the near term as long as the Sunday night high is in place. Levels of interest as eventual support are 8485 and 8414. EURJPY – 240 Minute Read More Nov 29, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 29, 2012 Author Share Posted November 29, 2012 OctaFX.Com - FOREX Technical Analysis: British Pound Slips in Early Week Trading A EURJPY short was taken last night at 10640 (released via Twitter @JamieSaettele). 10642 is the 61.8% of the decline from 10712 at 10640. Price has extended slightly beyond this level but the stop is above the 11/26 high. Once (if) the market turns lower again, objectives are 10458 and 10375 (former is former resistance and 38.2% of rally from 10031 and latter is middle of former congestion and 50% level). The USDJPY is little changed from yesterday. Near term structure has evolved to the point that the rally into 8221 may compose wave B within the A-B-C corrective decline from 8283. I remain of the mind that the 4th wave of one less degree at 8088-8158 will produce the next low. 8113/16, which the 4th wave terminus (triangle) and 11/15 JS Thrust close, is of specific interest. The AUDJPY is the weakest of the Yen crosses today, although losses are minimal. Risk remains to the downside in the near term as long as the Sunday night high is in place. Levels of interest as eventual support are 8485 and 8414. EURJPY – 240 Minute Read More Nov 29, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 30, 2012 Author Share Posted November 30, 2012 OctaFX.Com - Eurozone unemployment rises further to a record 11.7 percent in October amid recession Eurozone unemployment rises further to a record 11.7 percent in October amid recession BRUSSELS (AP) -- Eurozone unemployment rises further to a record 11.7 percent in October amid recession. Nov 30, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 1, 2012 Author Share Posted December 1, 2012 OctaFx - Forex Analysis: New Zealand Dollar To Threaten Range As RBNZ Softens Dovish Tone The New Zealand dollar pared the rebound from earlier this month after tagging a fresh high of 0.8266, but the recent weakness in the higher-yielding is likely to be short-lived as the Reserve Bank of New Zealand (RBNZ) preserves a neutral policy stance. Indeed, the economic data on tap for the following week may push the kiwi higher ahead of the interest rate decision as we’re expecting to see a small improvement in the terms of trade along with a marked increase in building activity, and a slew of positive developments may lead the NZDUSD to threaten the November high (0.8307) as it dampens speculation for a rate cut. According to a Bloomberg News survey, all of the 16 economists polled see the RBNZ keeping the benchmark interest rate at 2.50%, and central bank Governor Graeme Wheeler may continue to tame expectations for additional monetary support amid the expansion in private sector credit. Although the central bank head continues to highlight the ongoing slack within the real economy, the rebuilding efforts from the Christchurch earthquake may start to fan fears of an asset bubble amid record-low borrowing costs, and Governor Wheeler may signal a need to raise the cash rate in 2013 amid rising home prices. As the slowdown in global growth hampers the near-term outlook for the export-driven economy, the RBNZ remains poised to carry its wait-and-see approach into the following year, but we will be keeping a close eye on the policy statement as Mr. Wheeler warns of impending risks to the region. In turn, the fresh batch of central bank rhetoric may encourage a bullish forecast for the New Zealand dollar, and we may see the kiwi outperform against its major counterparts over the coming months amid the shift in the policy outlook. As the 10, 20, 50, and 100 day moving averages continue to converge with one another, the formation suggests that the NZDUSD may continue to face range-bound prices over the near-term, but a less dovish statement from the RBNZ may trigger a move above 0.8300 – the 23.6% Fibonacci retracement from 2010 low to the 2001 high – as market participants curb bets for lower borrowing costs. Dec 1, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 2, 2012 Author Share Posted December 2, 2012 OctaFX.Com - Analysis: Greek deal puts euro zone in slow recovery room PARIS (Reuters) - The euro zone is in the recovery room now the danger of a Greek default has been averted for a couple of years, but it is not yet safe from a Japanese-style "lost decade". The currency area's escape route hinges more on the pace of expansion in the United States and China, lifting the world economy, than on the policy mix in Europe, which will continue to favour austerity over growth in 2013. At best, Ireland and Portugal could emerge slimmed down from their bailout programmes and regain capital market access by the end of the year, demonstrating that adherence to a tough fiscal adjustment plan can work. But question marks hang over both. And Greece, like miracles, will take a little longer. And another debt writedown. Gloomy forecasts from the OECD and private economists suggest the 17-nation euro currency area may stay in recession all next year, swelling the armies of unemployed and pushing efforts to reduce public deficits and debt mountains off track. Political risks abound; possible social revolt against austerity policies in Greece, Spain or Portugal; a messy, inconclusive election outcome in Italy; and perhaps labor unrest against more modest structural reforms being mooted in France. Monday's EU-IMF agreement to keep Greece afloat inside the euro zone, by reducing its debt now and hinting at official debt relief to come later, has removed the biggest risk of a financial shock that could re-ignite market panic and send the euro back into the emergency ward. Market relief over the Greek deal, coupled with European Central Bank promises to do what it takes to preserve the euro, helped Italy sell its last 10-year bonds of 2012 on Thursday at the lowest yield for nearly two years. French Finance Minister Pierre Moscovici called it "a turning point for the euro zone because it helps recreate stability and confidence. Greece's fate will no longer be a daily issue". European Internal Market Commissioner Michel Barnier, using a soccer metaphor, said the peak of the debt crisis was over and "we are now at the start of the second half". Some analysts are less convinced. Mujtaba Rahman of Eurasia Group said the Greek fix "keeps the show on the road, but is no game changer". GERMAN DELAY The campaign for Germany's general election in September means that bolder steps towards writing off debt or sharing liabilities will have to wait until at least the end of next year. Public opposition to a "transfer union" in the euro zone's biggest economy and main paymaster remains high. Yet no Eurosceptical party has emerged to capitalize on that mood, and the next Berlin government, whether a "grand coalition" of centre-right and centre-left, which seems the most likely, or another permutation, may be more open to such solutions. The European Commission set out ambitious proposals for closer economic, fiscal and banking union last week, including a common euro zone fund to reward structural reforms, but most big changes will be on hold until after the German vote. In the meantime, modest progress is likely on creating a single European banking supervisor, the first step towards a euro zone banking union, but without a joint deposit guarantee to deter capital flight and bank runs. IMF Managing Director Christine Lagarde says swift implementation of a banking union with powers to supervise all banks in the euro area is now the top priority. Germany will continue to press for stricter European control over budgets in euro zone states, but that will involve trade-offs with greater mutualisation of risk and treaty changes that might only come after the 2014 European Parliament elections. Many EU officials and analysts expect that Spain, which has so far avoided a sovereign bailout, will have to request euro zone assistance early in the new year, when it needs to raise at least 230 billion euros ($300 billion) on capital markets. That would trigger European Central Bank buying of its bonds, which might reassure investors and further reduce borrowing costs for Madrid and Italy initially. But it would raise hackles in Germany, given the Bundesbank's continued opposition, prompting market speculation about the ECB's will and ability to sustain bond purchases. Markus Huber, senior trader at ETXCapital, reckons that even though economic reforms and ECB reassurance have cut Italy's borrowing costs, an indecisive outcome of a general election due in April could send yields soaring again. Rome is also at risk of contagion if Spanish Prime Minister Mariano Rajoy continues to dither and delay a euro zone credit line for Madrid, he said. FRANCE RISK? A more remote but much-talked-about risk is the possibility that financial markets could turn against France if President Francois Hollande's labor market and welfare financing reforms disappoint or meet militant street resistance. France's borrowing costs are hovering close to historic lows despite its loss of the coveted AAA credit rating from Moody's this month after Standard & Poor's downgraded Paris in January. Fitch Ratings, the only credit watchdog still to have France on AAA, said last week it could lower that grade if the country fails to meets its deficit reduction targets and its economy performs worse than forecast. Yet many investors believe France, with a deep, liquid debt market, enjoys an implicit German guarantee and so buy French bonds as a proxy for the strong northern euro zone states that have less debt to issue. French economist Jacques Delpla, co-author of a proposal for a limited issuance of common euro zone bonds, argues that euro states' debt will become more attractive in the next few years as other major economies try to inflate away their problems. "The whole of the world except Europe is going to inflate away its debt - the United States, Britain, Japan," he told a conference of the European Council on Foreign Relations. "Only euro zone debt will remain strong blue debt because the great German legacy is that we won't inflate. So part of our debt is going to default, and the rest will become the crown jewels of world debt." In economic terms, the euro zone's adjustment should advance further next year, with German wages rising above inflation while "internal devaluations" in peripheral euro zone countries make their exports more competitive and narrow current account imbalances. ECB President Mario Draghi, who expects most of the euro zone to start recovering in the second half of 2013, cautioned on Friday that the crisis was far from over and governments must consolidate their budgets and reduce current account imbalances. Optimists such as the Lisbon Council, a Brussels-based pro-market think-tank, and Berenberg Bank say the euro zone is turning into a more balanced and potentially more dynamic economy thanks to market pressure and constant demand for structural reforms. But the longer and deeper the recession in Spain, Italy and Portugal, the greater the risk of them being sucked into a vicious circle of falling revenues outpacing spending cuts which in turn depress demand and output, causing lower revenues. At the gloomy end of the scale, economists from Citi said last week they expected continued recession in the euro area in 2013 and 2014 and prolonged weakness thereafter — with ongoing financial strains and, over the next few years, a Greek exit and a series of sovereign debt restructurings. The euro's survival may no longer be in much doubt after the ECB stepped in and the Germans decided to keep Greece inside the currency area, but the euro zone faces at best a slow grind back up the hill. Dec 2, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 5, 2012 Author Share Posted December 5, 2012 OctaFX.Com - Eurozone retail sales slump in October Eurozone retail sales in unexpectedly big slump in October as investors await ECB meeting LONDON (AP) -- Retail sales across the 17 European Union countries that use the euro slumped far more than anticipated in October, largely due to a huge drop in Germany, in a development that will put more pressure on the European Central Bank to cut borrowing rates soon. Euro stat, the EU's statistics office, said Wednesday that euro-zone retail sales fell 1.2 percent in October from the previous month, double September's decline and substantially more than the 0.2 percent drop expected in the markets The figures provide further evidence that households across the euro-zone remain gloomy over the economy and are reluctant to spend more than they have to — non-food sales were particularly weak during October. The euro-zone is back in recession, officially defined as two straight quarters of falling output, and unemployment is up at a record high of 11.7 percent with 18.7 million people out of work. "The prospects for consumer spending in the euro-zone look troubling in the near term at least given very low consumer confidence, high and rising unemployment, generally muted wage growth and tightening fiscal policy in many countries," said Howard Archer, chief European economist at IHS Global Insight. While five of the countries at the epicenter of Europe's debt crisis — Greece, Cyprus, Spain, Portugal and Italy — are in recession, other economies, such as powerhouse Germany, are also now seeing demand wane. German retail sales fell a staggering monthly 2.8 percent, according to Eurostat. Wednesday's figures come a day before the ECB meets to decide on whether to cut its main interest rate from the record low of 0.75 percent. Most economists think the ECB will wait before backing another cut, though the dire economic indicators recently have created some uncertainty over its decision. The euro fell on the latest figures, trading 0.1 percent lower on the day at $1.3093. As well as announcing its latest interest rate decision, the ECB is also due to unveil its latest quarterly economic projections. They're not expected to show a recovery in the euro-zone economy before the second half of next year at the earliest as many governments continue to enact spending cuts and tax increases to lower debt. A separate survey reinforced market expectations that the recession in the eurozone has continued into the fourth quarter. Though the monthly purchasing managers' index — a broad gauge of business activity — from financial information company Markit was revised up to 46.5 in November from the previous estimate of 45.8, the survey still points to recession — any reading below 50 points to a contraction in activity. Dec 5, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 5, 2012 Author Share Posted December 5, 2012 OctaFX.Com - Forex News: Euro Fails to Hold 1.31 As Spanish Bond Auction Misses Target Despite the failure to reach a final agreement on a joint banking supervisor in yesterday’s meeting of European finance ministers, the Euro still climbed higher in yesterday’s session and rose above 1.3100 in the first part of today’s trading. Risk sentiment seems to be higher as the move was mimicked by other risk-correlated currencies, and European equities opened higher in today’s trading. Part of the optimism may come from Asian markets, where the Shanghai Composite index climbed nearly 3% in today’s trading, following an announcement that economic policies will be kept stable in China. There were only a few economic releases in today’s European session. The 10th straight decline in Euro-zone composite output was not as bad as initially estimated, and the rise in UK services activity disappointed expectations. The bigger decline came when sales of Spanish 3, 7, and 10-year bonds disappointed a maximum target of 4.5 billion Euros by only raising 4.25 billion in the auction. Then, Euro-zone retail sales were reported to have declined 1.2% in October, the disappointing number kept EURUSD below 1.3100. The Euro is currently trading at about 1.3085 against the US Dollar in forex markets. Resistance could be provided by a 2-month high at 1.3139, and support could be provided at 1.3026, by the 76.4% retracement of the drop from October’s high to November’s low. Tomorrow could see a lot of movement in Euro trading. The ECB will announce the interest rate at 12:45 GMT, expectations are for the rate to be left at 0.75%. Also, an updated estimate of the Euro-zone GDP for Q3 will be released, the previous estimate saw a 0.1% decline. EURUSD Daily: December 5, 2012 Dec 5, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 6, 2012 Author Share Posted December 6, 2012 OctaFx -ECB cuts growth outlook for eurozone, holds rates European Central Bank cuts growth outlook for eurozone, leaves interest rates unchanged FRANKFURT, Germany (AP) -- The European Central Bank underlined the gloomy prospects for the economy of the 17 European Union countries that use the euro, cutting its forecast for growth next year to minus 0.3 percent from plus 0.5 percent. Even so, the bank left rates unchanged at its meeting Thursday, and ECB head Mario Draghi gave little sign the bank was willing to add more stimulus. He said the bank had already done much to lower borrowing costs in heavily indebted countries that are struggling to grow. The bank's 22-member governing council kept the refinancing rate unchanged at 0.75 percent. The rate determines what private-sector banks are charged for borrowing from the ECB, and through that what rate the banks set for their businesses and consumer clients. Draghi said current rates were "very accomodative" — meaning they are low enough to encourage growth. He also said that the ECB had already effectively lowered some interest rates with its plan announced in September to buy the bonds of indebted countries. That plan — which would drive down borrowing costs for indebted governments that ask for help — had already led to drop of as much as 2 or 2 ½ percentage points in some countries borrowing costs, just on anticipation by bond investors. "That is much more than you can achieve by a cut in the policy rate," Draghi said. The eurozone's economy is in recession, having shrunk 0.1 percent in the third quarter after a 0.2 percent fall in the previous three months. A recession is often defined as two quarters of negative growth in a row. It is expected to contract again in the last three months of the year. Draghi said the slump would continue into next year, with a gradual recovery later in 2013. The bank's minus 0.3 percent outlook is the midpoint of the forecast rate of between minus 0.9 percent and plus 0.3 percent. Growth is being held back across the eurozone as governments slash spending and raise taxes to try to reduce levels of debt piled up from overspending in the case of Greece or real estate bubbles and banking crises in Spain and Ireland. Greece, Portugal, Ireland and tiny Cyprus have already needed bailouts, while Italy and Spain, the eurozone's third- and fourth-largest economies, teetered on the edge of needing help this summer. A rate reduction in theory could stimulate the eurozone's economy by making it easier to borrow, spend and invest. But rates are already low, and borrowing remains weak. There are only a few early signs that previous rate cuts and stimulus measures are finally trickling through to the wider economy. Draghi said that there had been a "wide discussion" on interest rates but that "in the end the consensus was to leave rates unchanged." Use of the term "consensus" suggests the council was not unanimous, but many analysts think the ECB could leave rates alone well into next year and might be done cutting. Some analysts think the bank may now consider it has done enough to help the economy after a year of drastic measures. The most important was an offer in September to buy unlimited amounts of bonds issued by of Europe's heavily indebted countries. It also made €1 trillion ($1.3 trillion) in cheap, long-term loans to stabilize shaky banks last December and February, and cut rates a quarter point in July. The bond purchase plan announced in September has helped stabilize the eurozone debt crisis. The purchases would aim to drive down bond interest rates, which would lower borrowing costs for indebted countries such as Spain and Italy and make it easier for them to manage their debt loads. Although no bonds have been bought, the mere possibility has influenced the bond market. The interest yield on Spanish 10-year bonds is down to around 5.4 percent now, from 7.6 percent in July. Italy's costs to borrow for 10 years are now down to 4.4 percent, down from over 7 percent at the start of the year and close to the country's average for the past decade, But while governments are breathing easier, that hasn't restarted growth. The ECB has tried to make sure that its crisis efforts are making it through to the eurozone's wider economy — but it is taking time to be felt and fear and reluctance remain. While some business confidence indicators are beginning to rise and the supply of money in the economy is increasing, consumer spending sagged 1.2 percent in October. Dec 6, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 7, 2012 Author Share Posted December 7, 2012 OctaFX.Com - FOREX Technical Analysis: NZD/USD Slams into Short Term Channel and Reverses Chart Prepared by Jamie Saettele, CMT FOREXAnalysis: “Bigger picture, the NZDUSD appears quite bullish as the decline from 8355 is in 3 waves (corrective) and the rally from 8052 is in 5 waves. The question at this point is whether the decline from 8267 is complete or simply part of a larger correction that ends below 8170 and closer to the estimated 8125/35 support.” The NZDUSD has headed straight up since 8170. Given the reaction at channel resistance today, there is the possibility that the advance from 8052 composes wave B of a triangle or flat that began on 9/28. That scenario is not viewed as probable as long as price is above 8170 however. A Fibonacci confluence and August 2011 high intersects with a channel at the end of December. FOREXTrading Strategy: Weakness into 8240 would be worthy of bullish consideration against 8170. Dec 7, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 8, 2012 Author Share Posted December 8, 2012 OctaFX.Com -Forex Analysis: British Pound Outlook Supported By BoE Policy- 1.6200 Remains Key The British Pound continued to retrace the decline from back in September as the Bank of England (BoE) maintained its current policy stance in December, and the short-term rebound in the GBPUSD may gather pace over the remainder of the year as the central bank appears to be slowly moving away from its easing cycle. Beyond the headline reading for U.K. Jobless Claims, which is expected to increase another 7.0K in November, we’re expecting to see average weekly earnings including bonuses increased for the third month in October, and another uptick in wage growth may become a growing concern for the Monetary Policy Committee (MPC) as inflation is expected to hold above the 2% target over the next two-years. Indeed, the BoE kept the benchmark interest rate at 0.50% and maintains its asset purchase program at GBP 375B, and we may see the central bank adopt a more hawkish tone for monetary policy as the U.K. emerges from the double-dip recession. Former MPC dove Adam Posen argued that the central bank is ‘going to be on hold indefinitely’ as the central bank turns its attention to the stickiness in inflation, and the BoE may shift gears in the following year as it aims to preserve price stability. Although the deepening recession in the Euro Zone – the U.K.’s largest trading partner – casts a weakened outlook for growth, we’ve seem consumer price growth hold above target since November 2009, and the committee may look to address the threat for inflation in an effort to preserve its credibility. As a BoE survey shows inflation expectations for the next 12-months increasing an annualized 3.5% following the 3.2% expansion in August, heightening price pressures in the U.K. should continue to prop up the British Pound as it pushes the BoE to scale back its willingness to expand its balance sheet further. As the relative strength index on the GBPUSD struggles to maintain the upward trend carried over from the previous month, the pound-dollar may continue to consolidate ahead of the BoE Minutes due out on December 19, and the exchange rate may continue to bounce between 1.6000-1.6100 as market participants weigh the outlook for monetary policy. Nevertheless, as the shift in the policy outlook fosters a bullish forecast for the British Pound, the rebound from 1.5822 may continue to gather pace over the near-term, but we would need a more meaningful move above 1.6200 – the 23.6% Fibonacci retracement from the 2009 low to high – to see the pair breakout of the downward trend carried over from 2011. Dec 8, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 8, 2012 Author Share Posted December 8, 2012 OctaFX.Com -Forex Analysis: Euro Jolted by ECB Rate Cut Rumors – Data Offers Little Clarity The Euro was one of the worst performing currencies this week, losing -0.46% to the US Dollar and -1.93% to the top New Zealand Dollar, as an interesting mix of data and commentary from central bankers and politicians allowed for an odd week of trading, with weakness in equity market and European peripheral bonds (rising yields), while strength in high beta currencies such as the Australian and New Zealand Dollars. The Euro was looking strong in the early part of the week, rising back above 1.3100 against the US Dollar as progress on the US fiscal cliff/slope soothed near-term investors’ anxiety. But by mid-week, the Euro’s fortunes were very much changed. With an inconclusive docket for the coming week, with a decision on Greece’s aid tranche on Thursday, with Spain beginning to flirt with a bailout request, and with the European Central Bank’s policy meeting results all likely to influence the 17-nation single currency, we must maintain a “neutral” bias on the Euro. To review: Spain has officially requested bailout funds for its banking sector. There were also rumors that Spain would seek a full sovereign bailout if the ECB would be willing to keep its longer-term yields within 2% of Germany’s. Obviously, this would not happen; ECB President Mario Draghi said on Thursday that the market has to find its own “natural” rates within reason; this in and of itself is a direct refutation of the Spanish request. This means that not only is the ECB on hold (no further rate cuts), but nothing else will be done until Spain takes the ECB’s conditions; the tail will not wag the dog. The region could use looser monetary conditions, with Germany starting to see weaker growth; yet any additional measures will likely result in higher inflation in the core countries as well as sovereign moral hazard. We don’t see a rate change at present time, even though Bloomberg News reported that most ECB policymakers favored a 25-bps rate cut on Thursday. Additionally, the European Union will deliver its final decision on the Greek aid tranche this Thursday, at which we expect a full dispersion to take place, or a planned release of funds in the future. Primarily, it is highly unlikely German Chancellor Angela Merkel allows Greece to leave the Euro-zone and allow a failure on her record (the beginning of the break-up of the Euro-zone) ahead of elections in just a few months. It would be very surprising if Greece does not receive the aid. The data picture the coming week is neutral to bullish for the Euro, which could help some of these other negative pressures present. On Monday, the December Euro-zone Sentix Investor Confidence reading is expected to have increased to -16.9 from -18.8. On Tuesday, the German ZEW Survey will show improvement in both the Current Situation and Economic Sentiment readings, which should ease 4Q’12 concerns about German growth. The Euro-zone Consumer Price Index this Friday draws our attention. Inflation is expected at -0.2% m/m in November, down from the +0.2% m/m reading in October. The yearly figure is expected at +2.2% from +2.5% y/y previously. These figures suggest aggregate demand in the Euro-zone is falling, a view shared by the ECB on Thursday. If deflation takes hold, a rate cut becomes a very real possibility in 1Q’ or 2Q’12. There are many different factors weighing on the Euro right now; while they’re mostly negative, positive outcomes remain possible. Accordingly, with data poised to offset concerns over Spain and the ECB over the coming week, we must give the Euro a “neutral” rating going forward; when risk-appetite is prevalent, the Euro could trail the winners; and when risk-aversion is prevalent, the Euro could lead the decliners Dec 8, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 10, 2012 Author Share Posted December 10, 2012 OctaFx - Greece received 26.5 billion euros in buyback bids by end-Friday BRUSSELS (Reuters) - Greece received a total of 26.5 billion euros ($34.3 billion) in offers for its debt buyback at the close of business on December 7, a senior euro zone official told Reuters on Monday. The official said the price was 33.4 percent. Greece has extended its offer to buy back debt until Tuesday, seeking more bids from bondholders after falling just short of a target to retire bonds worth 30 billion euros at a cost of just 10 billion euros. The buyback is designed to provide for about half of a 40-billion euro debt relief package for Athens agreed last month by the European Union and International Monetary Fund. The offer had been due to end on Friday. The Greek debt agency extended the offer to 7 a.m. EDT on Tuesday. "We are confident that there is still scope for additional tenders by domestic and international investors to ensure a successful debt buyback," European Commission spokesman Simon O'Connor told a regular briefing in Brussels. Euro zone finance ministers will meet on Thursday in Brussels to review the buyback operation and formally release the next disbursement of loans to Greece under its second international rescue program. Dec 10, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 10, 2012 Author Share Posted December 10, 2012 OctaFx - Greece extends buyback offer to reach 30 billion-euro target ATHENS/BRUSSELS (Reuters) - Greece extended its offer to buy back debt until Tuesday, seeking more bids from bondholders after falling short of a target to retire bonds worth 30 billion euros at a cost of just 10 billion euros. The buyback is designed to provide for about half of a 40-billion euro debt relief package for Athens agreed last month by the European Union and International Monetary Fund. Its success is crucial to ensuring Greece's debt is put back on sustainable footing and - more immediately - to unlocking badly-needed aid for the country. Despite the initial lack of investor interest, the scheme is expected to ultimately hit its targets since Greek banks - whose own fate depends on a successful buyback - are expected to stump up the shortfall. A total of 26.5 billion euros was tendered at an average price of 33.4 percent of face value when the offer expired on Friday, a senior euro zone official told Reuters. That would mean Greece would still have 1.15 billion euros left over from the 10 billion euros it was allotted to spend to retire outstanding debt. Assuming the same average price, it could buy an extra 3.5 billion euros worth of bonds. Greece's debt agency extended the offer to 7 a.m. EDT on Tuesday following Friday's deadline. "The aim is to reach the 30 billion euro target on the face value of debt to be bought back," said a government official, who declined to be named, adding the aim was to use all of the 10 billion euros given by lenders for the buyback. Euro zone finance ministers will meet on Thursday in Brussels to review the buyback operation and formally release the next disbursement of loans to Greece under its second international rescue program. "We are confident that there is still scope for additional tenders by domestic and international investors to ensure a successful debt buyback," European Commission spokesman Simon O'Connor told a regular briefing in Brussels. "EASILY COVERED" A senior Greek banker who spoke on condition of anonymity said Athens aimed to use the additional day to get another 3 to 4 billion euros worth of bonds offered for exchange. "This will be easily covered by Greek banks, if foreign bondholders do not offer more," the banker told Reuters. Greek banks and insurers had tendered about 10 billion euros of bonds out of their total holdings of about 17 billion euros, the banker said. Nearly 63 billion euros of Greek debt held by private investors was eligible for the buyback. Shortly before the previous Friday deadline expired, Greek banks got board approvals to offer as much as 100 percent of their bondholdings to make the buyback work. Athens had offered better-than-expected terms for the buyback to entice investors, with price ranges at a premium over market prices. But Greek lenders had been reluctant to sell back to the government all of their bondholdings, trying to limit the future profits and interest income on their bonds they will forego. However, they are expected to step up now to ensure a successful buyback since they depend on the bailout funds that Athens stands to receive once it is completed. A big chunk of the 34.4 billion euros of aid due will be used to recapitalize them. Athens badly needs the aid to revive its ailing economy, which is on track for a sixth year of recession due to austerity measures including spending cuts and tax hikes. The EU and the IMF have been withholding rescue payments to Greece for six months because it had failed on pledges to shore up its finances, privatize and make its economy more competitive. Greece and its international lenders had shied away from setting a binding target for the buyback, apart from saying that Athens would spend a maximum of 10 billion euros on it. Under the scheme, Greece was expected to spend that amount to repurchase 30 billion euros of debt, shaving it by a net 20 billion euros. That would help slash Greece's debt to 124 percent of GDP by 2020, ensuring that the IMF stays on board in the country's rescue. Greece set December 18 as the settlement date for offers on the 20 series of outstanding bonds it is buying back. Athens' debt agency chief urged investors to tender their holdings, warning a similar deal may not come again. "Future measures may not involve an opportunity to exit investments ... at the levels offered for this buyback," PDMA Chief Stelios Papadopoulos said in a statement. Dec 10, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted December 11, 2012 Author Share Posted December 11, 2012 OctaFx.com - Forex Analysis: Euro May Look Past Disappointing German ZEW Data The Euro is likely to look past what could be a disappointing outcome on Germany’s ZEW investor confidence gauge before this week’s EU leaders’ summit. Talking Points German ZEW May Surprise Lower But Euro Follow-Through Unlikely US Dollar May Rise as S&P 500 Futures Point to Risk-Averse Mood December’s German ZEW Survey of investor confidence is in focus on the European economic calendar. Forecasts suggest the forward-looking Expectations index will continue to moderate, showing sentiment remains net negative but by a smaller margin. The gauge has closely tracked Italian bond yields, suggesting the evolution of the Eurozone debt crisis is the key trend-setter. Rates on the benchmark Italian 10-year debt have edged higher this month, pointing to a pickup in funding stress and warning the ZEW reading may fall short of expectations. While this may put near-term downward pressure on the Euro, follow-through is likely to prove limited. Indeed, yields themselves are a far timelier indicator of investors’ confidence in Eurozone crisis containment efforts than the ZEW reading. Furthermore, traders are unlikely to commit to a firm directional bias until the outcome of this week’s EU Leaders’ summit. On the sentiment front, S&P 500 futures are pointing lower, arguing for a risk-off mood heading into European trading hours and hinting the safety-linked US Dollar may have scope to advance against most of its top counterparts. Trading was muted in the overnight session, with the major currencies locked in narrow consolidation ranges. Dec 11, 2012 OctaFX.Com News Updates Quote Link to comment Share on other sites More sharing options...
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