FBS.com - Daily/Weekly Analysis / Market News

[internationallove]

 

FBS Daily/Weekly Analysis

 

Dear members we will provide you the latest economy reviews. Please, follow our Analytics and market news and you will be informed about Forex actualities. Hope, our reviews will help you to increase the efficiency of your trading.

 

 

 

Analytical support is one of our strongest advantages. FBS has a large in-house analytical department, gathering top level professionals in market research. Our analysts provide round-the-clock analytical support, with over 120 total market news, comments, opinions, predictions and many more. Our analysts also provide comments for several business broadcasting companies and TV shows.

[internationallove]

Market analysis "Mizuho: pound’s consolidating below $1.58" (2010-12-08)

 

 

Technical analysts at Mizuho Corporate Bank note that the British pound made yesterday a small «spike high» at 1.5820 on the daily chart and the rate got below the bottom of the rising daily Ichimoku Cloud. In their view, today the pair GBP/USD will be consolidating below 1.5800. The specialists note that sterling may be supported by the 9-day MA.

 

 

Chart. Daily GBP/USD

[internationallove]

Market analysis "Rabobank: EUR/USD and USD/CAD forecast" (2010-12-08)

 

 

Analysts at Rabobank note that proposed extension of tax cuts in the USA may be stimulating the greenback’s rate now, but will set a base for US dollar’s decline in 2011. Assuming that global economic growth will keep accelerating next year and the market’s risk sentiment continues to improve, it’s quite likely that US currency will suffer from the negative implications of its twin deficits.

 

So, if the euro zone countries will manage to move towards the restoration of fiscal stability it will support the single currency. The specialists believe that in 2011 the pair EUR/USD may rise to 1.50.

 

In addition, Rabobank recommends selling USD/CAD on rallies. The pair may retest its November minimum at 0.9975 if the crude price returns upwards to $90 a barrel. In favor of such outcome there are such factors as speculation that OPEC will maintain its quotas at this week's meeting in Ecuador, the IEA's upward revision to US energy demand and strong oil demand from China.

 

 

Chart. Daily EUR/USD

 

 

Chart. Daily USD/CAD

[internationallove]

Market analysis "Commerzbank: EUR/CHF risks declining to 1.2886" (2010-12-08)

 

 

Technical analysts at Commerzbank note that the single currency risks getting down to the support level at 1.2886 trading versus Swiss franc. The specialists expect that this level will manage to hold the bear’s attack. Otherwise, euro’s slump to the record minimum at 1.2765 hit on September 8 will become quite likely.

 

 

Chart. Daily EUR/CHF

[internationallove]

Market analysis Nomura: in 2011 pound will gain versus US dollar, euro and yen

 

 

Analysts at Nomura Holdings Inc. advise investors to bet that in 2011 the British pound will gain versus the greenback, the single currency and Japanese yen.

 

The specialists note that it’s becoming less and less likely that the Bank of England will follow the example of US Federal Reserve conducting the second round of quantitative easing. In addition, UK currency is going to be supported by the credible fiscal consolidation plans and reduced political risks from a stronger-than-expected coalition government. As a result, sterling that has lost 20% to US dollar since 2007 is at last going to rebound.

 

Nomura strategists purchased pound against a basket that consists of equal shares of euro, dollar and yen. A basket is needed to eliminate the otherwise negative USD correlation with EUR/GBP.

 

According to the analysts, sterling will trade at $1.63 in the first quarter of 2011 (previous forecast was at $1.67) and advance to $1.73 by the end of the next year. Euro’s expected to fall from $1.35 in the first quarter to $1.32 and then recover again to $1.35 by December 2012. During the forecast period Japanese currency will trade at 80 yen per dollar and then decline to 85 yen per dollar.

 

 

Chart. Daily GBP/USD

[internationallove]

Market analysis "BNP Paribas: Aussie’s growth will be limited" (2010-12-09)

 

 

Australian dollar surged versus its US counterpart on the encouraging labor market data. The pair AUD/USD went up from 0.9790 before jobs report rising above 0.9860. The country’s unemployment fell from October’s level of 5.4% to 5.2% in November and the payrolls increased during the past month by 54,600 while the analysts were looking forward only to 19,100 advance.

 

Never the less, analysts at BNP Paribas note that Aussie’s gains may be still rather limited due to several reasons. The main negative factor for Australia’s currency will be the withdrawal of liquidity from China that’s trying to fight rising inflation, whether it's this weekend or next weekend. The specialists underline that any change of China’s monetary policy will affect AUD/USD as China is Australia's largest trading partner. According to BNP Paribas, the pair will face strong resistance at 1.0003.

 

 

Chart. H4 AUD/USD

[internationallove]

Market analysis "UBS: SNB won’t raise rates" (2010-12-09)

 

 

Currency strategists at UBS AG expect that the Swiss National Bank (SNB) will leave its benchmark interest rate at the current low 0.25% level on its December 16 meeting.

 

According to UBS, the SNB won’t be able to ignore the concerns about the economic and fiscal state of some euro zone countries that makes investors increase demand for franc as a refuge currency. The specialists note that Switzerland’s inflation rate is close to its historic minimums while the national currency keeps appreciating both versus euro and on a trade-weighted basis.

 

As a result, UBS believes that the time for monetary tightening hasn’t come yet and that rates won’t be lifted until June 2011.

 

 

Chart. Daily EUR/CHF

[internationallove]

Market analysis "Mizuho: euro will rise to $1.3400/50" (2010-12-09)

 

 

Technical analysts at Mizuho Corporate Bank expect the European currency to gain today versus the greenback. The specialists claim that a small “doji” candle formed yesterday at the 9-day MA at 1.3211 will make the pair EUR/USD return upwards to bottom of the Ichimoku Cloud in the 1.3400/50 area.

 

According to Mizuho, it’s necessary to buy euro at 1.3300 stopping below 1.3180.

 

Chart. Daily EUR/USD

[internationallove]

Market analysis "UBS: exchange rate volatility will rise in 2011" (2010-12-09)

 

 

Analysts at UBS AG believe that foreign-exchange rates will behave the next year in a very volatile manner. In their view, this will happen as the pace of the economic growth in the emerging markets and in the developed ones diverges, while the central banks use monetary stimulus measures to spur recoveries and the euro area keeps struggling to fight serious debt crisis. There is also high risk of policy-maker error in relation to interest rates, quantitative easing and fiscal tightening, notes UBS.

 

The specialists expect that annual exchange-rate price swings on some major currencies may double. In particular, the single currency’s trading range may widen from $1.1877-$1.4579 this year to $1.1-$1.5 in 2011. The greenback’s rate may travel from 70 to 100 yen, while in 2010 it traded between 80.22 and 94.99 yen.

 

As a result, UBS thinks that companies need to increase hedges against greater exchange rates fluctuation.

 

 

Chart. Daily EUR/USD

[internationallove]

Market analysis "ING Bank: Bank of England won’t raise rates" (2010-12-09)

 

Analysts at ING Bank claim that although the recent British macroeconomic data turned out to be rather positive, the possibility that the Bank of England will raise interest rates in 2011 seems to be thin as the negative risks for the country’s economy haven’t been eliminated yet. Never the less, as the prospects of the second round of the quantitative easing are fading away, pound will manage to gain some support.

 

The specialists believe that BOE Monetary policy committee (MPC) will split into 3 groups with Sentance and Posen loyal to their opposing positions (first calling for the interest rate hike and the second – for the QE), while the most policymakers keep seeing the risks of both reducing growth and rising inflation. The BOE MPC December rate decision will be released at 12:00 GMT.

[internationallove]

Market analysis "Barclays Capital: pound may rise to $1.5910" (2010-12-09)

 

Strategists at Barclays Capital note that pound’s advance versus the greenback from November minimum at 1.5484 is continuing and that sterling may strengthen to the top of the daily Ichimoku Cloud at 1.5910.

 

If the British currency closes the day above this level, it will be possible to conclude, according to Barclays, that the current move is more than just a bounce within the downtrend and pond may climb to 1.6125-85.

 

Yesterday's spike low at 1.5665 is currently acting as support for the rate, claim the specialists.

 

 

Chart. H4 GBP/USD

[internationallove]

Market analysis Deutsche Bank: necessary EBC steps counter the debt crisis - 9/12/10

 

Analysts at Deutsche Bank AG believe that the European Central Bank has to join efforts with the euro zone’s commercial banks in order to combat the region’s debt crisis.

 

According to them, the ECB could encourage lenders to buy bonds of indebted nations – Spain, Italy, Portugal and Ireland. This may be achieved if the central bank limits collateral for 1-year central bank loans against a pledge of investment-grade sovereign papers rated less than AAA. As a result, banks won’t need to give more collateral in case the value of the risky bonds drops, so the lenders will become more eager to hold these debt securities.

 

The specialists note that the yields on the periphery debt seem to be quite attractive for investors. All that’s necessary is to grant the marker players more freedom.

 

Deutsche Bank’s offer would reduce pressure on the ECB that has purchased since May the bonds of suffering European economies by 69 billion euro. In addition, governments will be able to cut their budget deficits, while the plan won’t let them relax too much as the collateral would re-enter the market after a year.

 

The strategists note that the plan will be really effective if European governments, in their turn, will conduct long-term measures such as strengthening the rules for fiscal discipline in the euro-area and the ECB indicates it will raise in 2011 its benchmark interest rate from the record minimum of 1% if the euro area’s economy manages to hold such move.

[internationallove]

Market analysis "UBS: USD/JPY trade volume restored" (2010-12-10)

 

Analysts at UBS AG claim that Japanese monetary authorities will have to confront the “full force” of the market if they decide to conduct another currency intervention to stop yen’s appreciation versus the greenback.

 

According to the specialists, after Japan intervened in the foreign-exchange market on September 15 trading volumes of the pair USD/JPY have significantly declined as hedge funds and other investors became very cautious and left the market. Now, as 10-year Treasury yields began rising in November and reached a 6-month high this week 2-way flows in dollar-yen returned to the pre-intervention level.

 

UBS believes that if US yields fall back, even temporarily, and Japan is forced to intervene again to prevent dollar from falling, the country’s Ministry of Finance will have to act against the full force of the bearish market.

 

 

Chart. H4 USD/JPY

[internationallove]

Market analysis "Mizuho: US dollar is declining to 83.40 yen" (2010-12-10)

 

Technical analysts at Mizuho Corporate Bank note that US dollar is fluctuating under the recent maximums at 84.30 and 84.39 trading versus Japanese yen. In their view, the greenback’s likely to hold today below these levels.

 

If the pair USD/JPY closes the day under its 9-day MA at 83.37, it will test on the downside the top of the daily Ichimoku Cloud and then decline to the 26-day MA at 82.48 forming a potential small “double top” in the 84.31/84.41 area.

 

According to Mizuho, it’s necessary to sell at 83.65 adding to 84.00 and stop above 84.50. Yen may fall to 83.40/83.00 and possibly to 82.35.

 

 

Chart. H4 USD/JPY

[internationallove]

Market analysis "UBS: bearish view on EUR/CHF" (2010-12-10)

 

 

Technical analysts at UBS AG keep betting on euro’s decline versus the Swiss franc. According to them, the pair EUR/CHF may find support at 1.2933, while its growth will be limited by the resistance at 1.3229.

 

If the single currency breaks below the mentioned support, it will be poised to drop to 1.2766. The pair EUR/CHF is currently trading in the 1.2990 area.

 

 

Chart. H1 EUR/CHF

[internationallove]

Market analysis "Commerzbank: pound won’t rise above $1.5823/90" (2010-12-10)

 

Technical analysts at Commerzbank expect that pound’s advance versus US dollar will be capped by the resistance in the 1.5823/90 area representing the resistance line and the 38.2% Fibonacci retracement of November’s decline. The specialists note that if the pair GBP/USD fails at its current trading levels it will be pulled back down to 1.5650 or even lower.

 

If sterling loses its strength and goes down, it will likely close below the double Fibonacci support at 1.5510/05 (38.2% retracement of growth from May to November) to the 1.5296/1.5363 zone of September minimum and 200-day MA.

 

 

Chart. H4 GBP/USD

[internationallove]

Market analysis "Rabobank: buy Aussie and loonie on the dips" (2010-12-10)

 

 

Currency strategists at Rabobank claim that any decline in commodity currencies due to the potential increase in China’s interest rates during the next few days should be regarded as an opportunity to buy them.

 

The specialists draw investors’ attention to the fact that Chinese monetary authorities have undertaken a lot of monetary easing at the end of 2008, so the tightening measures that they are to conduct now will be considered by the market as a kind of policy normalization. One more factor in favor of commodity currencies is connected, as a matter of fact, with high commodity prices.

 

As a result, the bank notes that any retreats of Australian and Canadian dollars will be likely reversed.

 

 

Chart. Daily AUD/USD

[internationallove]

"Ichimoku. Weekly forecast. GBP/USD" (2010-12-13)

 

 

Weekly GBP/USD

 

The situation on the GBP/USD market began improving – the bulls made the prices rise above the Ichimoku Cloud. Kijun-sen (4) and Chinkou Span that passes through the area of maximal deviation from the price chart also began growing.

 

Upward character of the Cloud is still in place. It’s necessary to note that Senkou Span A (1) has also started moving up.

 

As a result, sterling may break up through the Turning line (3) this week.

 

 

Chart. Weekly GBP/USD

 

Daily GBP/USD

 

On the daily chart the prices were climbing alongside the bottom of the Ichimoku Cloud. On Friday the pair GBP/USD closed inside Kumo above Senkou Span B.

 

The market seems to have strength for further rebound as the Senkou-Span A (1) and Kijun-sen (3) also went up.

 

As a result, in the near tome it’s possible to expect that the British currency will test resistance formed by Kijun-sen (4). If it fails to hold the bullish pressure, then the rate will advance to the upper border of the Cloud.

 

 

Chart. Daily GBP/USD

[internationallove]

"Ichimoku. Weekly forecast. USD/JPY" (2010-12-13)

 

 

 

Weekly USD/JPY

 

Weekly Tenkan-sen (3) supported the prices that after bouncing off returned to the recent maximums in the 84.00 area. However, the bulls didn’t manage to close the week above these levels.

 

Despite the general downtrend, USD/JPY market may keep rebounding to the horizontal Standard line (4). About this warns the Chinkou Span that is now found in the area of maximal deviation from the price chart.

 

 

Chart. Weekly USD/JPY

 

Daily USD/JPY

On the daily chart the prices bounced off from horizontal Kijun-sen (4) and broke through to the positive zone above the Ichimoku Cloud. Moreover, the bulls also managed to consolidate above the Turning line (3) that was as well acting as a resistance.

 

Never the less, all line s of the Indicator remain horizontal, but already at the beginning of the next week they may begin growing. In this case the prices may break through the resistance at 84.40 and climb to 83.50.

 

 

Chart. Daily USD/JPY

[internationallove]

"Ichimoku. Weekly forecast. USD/CHF" (2010-12-13)

 

 

Weekly USD/CHF

 

The pair USD/CHF is still inside weekly Tenkan-Kijun channel, but near its lower border – Tenkan-sen (3).

 

The major outlook seems to be the same – the bears keep being very strong and don’t let upward correction develop in the full force.

 

Never the less, Chinkou Span being in the area of the maximal deviation lets us assume that the correction isn’t over yet. If there isn’t going to be any growth then the market will move sideways during the next few weeks.

 

 

Chart. Weekly USD/CHF

 

Daily USD/CHF

On the daily chart, as it was expected, at the beginning of the week the bulls tried to rebound the prices bouncing from the bottom of the Cloud. However, the positive sentiment was able to hold only during 2 days. After breaking up through the Standard line (4) the prices stopped at the Turning line (3) that reversed the rate to the downtrend making greenback close on Friday below Kijun-sen (4).

 

As a result, the trade became sideways as all lines of the Indicator show (1, 2, 3 and 4). Consolidation of below Kijun-sen (4) will lead to the further activity of the bears.

 

 

Chart. Daily USD/CHF

[internationallove]

"Commonwealth: Aussie may fall to $0.97" (2010-12-13)

 

 

Currency strategists at Commonwealth Bank of Australia note that Australian dollar is trading versus its US counterpart range-bound between 0.9810 and 0.9896. The specialists note, however, that by the end of the week the pair AUD/USD may get under pressure.

 

According to the bank, there aren’t many investors willing to take risk ahead of the 2-day Fed meeting starting Tuesday. The analysts believe that US monetary authorities will try to look more optimistic after the beige book and try to understate weak payrolls number. As a result, American yields may get a little higher and push up USD against all crosses.

 

Commonwealth expects Aussie to approach 0.9700 by the end of the week.

 

 

Chart. H1 AUD/USD

[internationallove]

"Commerzbank: euro will stay under pressure this week" (2010-12-13)

 

 

Analysts at Commerzbank believe that the single currency will remain under pressure ahead of the EU summit schedule on Thursday. In their view, investors will be looking forward to the details of the permanent crisis management mechanisms to replace the transitional EFSF and EFSM programs.

 

uropeanFinancial Stability Mechanism or EFSM is endowed with 60 billion euro and the European Financial Stability Facility or EFSF has borrowing capacity of 690 billion euro.

 

At least the German Finance Minister is expecting a decision on the form of the mechanism, which would remove a lot of the uncertainty in the market.

 

 

Chart. H4 EUR/USD

[internationallove]

"CUBS: EUR/CHF ahead of SNB meeting" (2010-12-13)

 

 

Currency strategists at UBS AG claim that although the fundamentals point at the potential decline of the single currency versus Swiss franc, the market players won’t want to have short positions by the Swiss National Bank (SNB) meeting that will take place on Thursday.

 

The specialists note that Switzerland’s economy is showing very encouraging results, the SNB could tighten its monetary policy. Never the less, headline and core CPI is near zero, so the rate hike currently seems very unlikely.

 

 

Chart. H4 EUR/CHF

[internationallove]

"Mizuho advises to buy pound versus US dollar" (2010-12-13)

 

Technical analysts at Mizuho Corporate Bank note that British pound is clinging to the bottom of the daily Ichimoku Cloud. The specialists also point that the 9-day MA is limiting the recent minimums, while the Chinkou Span is getting a small lift from November Cloud.

 

According to Mizuho, if the pair GBP/USD closes the day above the 26-day MA in the 1.5850 area, momentum will become bullish.

 

The bank recommends buying pounds on the decline to 1.5700 and stopping below 1.5650. Sterling’s expected to advance to 1.5975/1.6000.

 

 

Chart. Daily GBP/USD

[internationallove]

"DBS Bank: China’s in favor of euro’s strengthening" (2010-12-14)

 

Strategists at DBS Bank expect that euro and the pair USD/CNY will strengthen. In their view, this will happen as China’s diversifying its foreign exchange reserves from the greenbacks in favor of the single currency.

 

The specialists note that Chinese authorities regard US economic and fiscal problems more serious than the European ones. China approves of euro area’s decision to aim at the long-term stability of euro, even though the austerity measures will certainly harm the region’s growth in the short term.

 

Stronger euro will make yuan rise helping China to fight rising inflation. In addition, DBS believes that the market prefers China to raise the reserve requirement ratio instead of lifting up the interest rates as it reassures investors that China’s economic growth pace is high enough.