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Comments and forex-analytics from FBS


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#521 ryuroden

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Posted 15 February 2012 - 12:33 PM

Commerzbank: EUR/CAD technical comments


Analysts at Commerzbank are bearish on the single currency versus Canadian dollar. The specialists note that EUR/CAD didn’t manage to overcome resistance provided by the 55-day MA at $1.3258 and is resuming decline.

According to the bank, support levels are situated at $1.3000 (psychological level), $1.2876 (2012 minimum), $1.2777 (2011 minimum), $1.2765 (the 1985-2012 uptrend line) and $1.2613. Resistance levels are situated at $1.3253 (January maximum), $1.3258 (55-day MA) and $1.3398 (September minimum).


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#522 ryuroden

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Posted 15 February 2012 - 12:50 PM

Analysts on USD/JPY prospects


Analysts at BNP Paribas believe that one shouldn’t hurry to turn bullish on USD/JPY. The specialists underline that though the Bank of Japan decided to keep expanding its balance sheet and set a 1% inflation target, it will not be guiding policy any differently. The economists remind that asset purchases didn’t manage to reverse yen’s uptrend either in the past 3 years or during the prior QE in 2002-2004. According to the bank, USD/JPY will trade in 73 yen area in first quarter, 71 in the second one and then decline to 70 in the final 3 months of the year.

Never the less, analysts at Barclays Capital note that the BOJ is trying to "catch up to its counterparts, and this adds to the downward pressure on yen already prevailing from Japan’s ongoing external balance deterioration and the risk of a sovereign downgrade toward fiscal year-end (March 31)”. With Japanese interest rates also “lower for longer” Japanese investors will look abroad for better returns stepping up monetary outflows from Japan. In addition, US dollar will be helped by American economic recovery. In their view, USD/JPY will rise to 79.00, 81.00 and 83.00 yen in 3, 6 and 12 months.

By the way, specialists at Societe Generale point out that the move of Japanese central bank doesn’t look that large compared with ECB’s actions: the BOJ will increase bond purchases by a further 10 trillion yen this year, which could increase the size of their balance sheet by 2% of GDP, while the ECB's December LTRO added nearly 5% GDP to the central bank's balance sheet (remember that there will be another 3-year LTRO February 29). The specialists say that though the fast that USD/JPY rose above 200-day MA is rather promising, the pair still has to overcome the critical 80 yen level.

Economists at CitiFX believe that yen’s depreciation will be short-lived. In their view, it will be difficult for USD/JPY to start sustainable rally until US Treasury yields as a whole start to press higher.


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#523 ryuroden

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Posted 15 February 2012 - 02:56 PM

HSBC about the forex market prospects


While many experts expect the single currency to keep falling versus the greenback, analysts at HSBC think that EUR/USD will rise to $1.3700 by the end of the second quarter.

The specialists don’t think the market has arrived at any kind of final verdict on Greece. There is disappointment that there wasn’t anything firmer in terms of ring-fencing Greece, but progress has been made and there is political commitment on the outcome. In that environment, people should still buy the euro, claims the bank. In the short term, euro will push higher and some of the doubts will fade away.

HSBC also believe that the Swiss National Bank (SNB) will defend the floor for EUR/CHF which was set at 1.20 in September 2011 without raising it in the near future. As for USD/CHF, it will remain stable at around 0.90 over the next 3 months.

The specialists are bullish on emerging market currencies, even though many are dependent on global growth indicators, and are driven by unpredictable risk appetite.
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#524 ryuroden

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Posted 16 February 2012 - 08:40 AM

Euro’s pressed by Greek uncertainty


The single currency fell to 3-month minimum versus the greenback.

Tomorrow German’s Chancellor Angela Merkel meets Italian Prime Minister Mario Monti. The leaders will hold a joint press conference afterwards.
On Monday, February 20, euro zone’s finance ministers will gather to discuss a second bailout package for Greece. Initially the meeting was scheduled to take place yesterday, but then was postponed. Luxembourg Prime Minister Jean-Claude Junker assured the markets that “all the necessary decisions” on the issue will be taken at February 20 meeting.

The markets worried that a delay in Greek aid will increase borrowing costs for the region. The situation remains rather uncertain. According to Reuters, several EU sources said on Wednesday the euro zone is examining ways of holding back parts or even the entire bailout program until after Greek elections in April while still ensuring it avoids a disorderly default. The risk sentiment was also affected by Moody’s announcement that the ratings of several banks including UBS, Credit Suisse and Deutsche Bank are put on review to the downside.

In the current circumstances watch Spain’s and France’s debt auctions later today. France will offer 8.5 billion euro in 2-, 3- and 5-year bonds, while Spain plans to sell 4 billion euro in securities maturing in January and July 2015 and in October 2019.

Analysts at Nomura believe that by the end of the month EUR/USD will hit $1.2500. In their view, the market has lost confidence and investors won’t have much incentive to buy euro.

The pair fell today below 38.2% Fibonacci retracement of its rally this year at $1.3056 and 55-day MA at $1.3050. Support for euro is now found in the $1.2970 area (50% retracement of the same rally, daily Ichimoku charts' Kijun-sen line and also the Cloud’s bottom).

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#525 ryuroden

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Posted 16 February 2012 - 12:20 PM

ANZ: scenarios for EUR/JPY


Analysts at ANZ underline that the level of divergence in both monthly and weekly indicators suggests that if the current rebound can be maintained, EUR/JPY may also have formed a base.

In their view, the outlook for the pair will become bullish if it overcomes resistance in the 105.50/107.00 area. In such case euro will get chance to repeat the 2009 rally and to climb through 112.00 towards 125.00 and possibly to 133.50.

At the same time, the specialists claim that one can’t rule out the possibility that the single currency may survive a gradual decline to 2000 minimum versus Japanese yen at 88.95 yen. The potential rally of EUR/JPY will be undermined below 100.00 yen.


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#526 ryuroden

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Posted 16 February 2012 - 12:26 PM

Spanish and French auction results


Spain managed to sell the planned volume (4.074 billion euro out of the 3-4 billion euro target) of bonds with lower yields and better cover ratio. Here are the details:

- 3-year bonds: 2.268 billion euro, yield 3.332% (vs. 2.861%), cover 2.2 (vs. 1.6);
- January 2015 papers: 733 million euro, yield 2.966 (vs. 4.984%) %, cover 4.4 (vs. 2.4);
- October 2019 papers: 1.073 billion euro, yield 4.832% (vs. 5.352%), cover 3.3 (vs. 2.1).

France was able to sell 8.45 billion euro out of a targeted 7-8.5 billion euro. Here are the details:
- 5-year bonds: 5.025 billion euro, yield 1.93%, cover 1.99;
- July 2014: 2.090 billion euro, yield 0.89% (vs. 1.05%), cover 2.361 (vs. 2.12);
- January 2015: 1.335 billion euro, yield 1.09%, cover 3.303.

The actions may be regarded as successful enough. Never the less, euro didn’t get much help and keeps trading in minus for the fifth day in a row.


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#527 ryuroden

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Posted 16 February 2012 - 12:30 PM

Commerzbank: USD/CAD technicals


Technical analysts at Commerzbank note that the greenback keeps trading around the 200-day MA versus its Canadian counterpart.

According to the bank, resistance for US currency lies at 1.0049/73 (December minimum and January 3 minimum) and at 1.0149/46 (55-day MA and the 3-month downtrend). The outlook for the pair will become positive only above the latter. Commerzbank says US dollar won’t likely get that high this week.

The specialists think that the pair USD/CAD may slide to October minimum at 0.9892. In their view, this level will contain further declines as only an unexpected drop and 2 daily closes below the October low would point towards further range trading with a bearish bias and the possibility of such outcome isn’t high.


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#528 ryuroden

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Posted 16 February 2012 - 01:47 PM

USD/JPY: will the recovery continue?


The greenback keeps rising versus Japanese yen. On Tuesday USD/JPY broke above the 200-day MA spurring the bullish sentiment.

Today the pair set 3-month maximum at 78.88 yen. The cross is still trading below the post-intervention spike at 79.52 set at October 31 and November 1 maximum at 78.97.

However, some analysts keep warning investors that it may be premature to turn bullish on US dollar. The specialists remind that in the past few years USD/JPY broke above the 200-day MA many times, but this signals turned out to be false and there was no bullish reversal afterwards.

In addition, as the possibility that the Federal Reserve will decide to launch another round of quantitative easing seems strong enough, it would be hard for traders to sell yen. Expectations of QE3 will keep US short-term note yields (in particular, 2-year Treasury yields) low. USD/JPY is strongly correlated (90%) with yield spread between Japanese and US 2-year debt, so in such conditions US dollar will remain under pressure.


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#529 ryuroden

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Posted 17 February 2012 - 12:32 PM

Western Union about NZD/USD


New Zealandís dollar got a lift today versus its US counterpart as the Reserve Bank of New Zealandís governor Alan Bollard claimed that the nationís growth numbers are currently understated due to conservative statistical interpretations and the particular nature of the economy. According to Bollard, if Australian conventions are applied New Zealandís GDP could be 10% higher.

Analysts at Western Union claim that NZD/USD is helped by more positive sentiment towards Greece: ďAll it takes is another bit of speculation that the Greeks have found more places to slash their budget, and while there is nothing concrete they have said that it (the second bailout) is likely to be green lit on Monday Ė which is all the market apparently needsĒ.

The specialists expect kiwi to trade at the current levels or edge higher to 0.8400. In their view, support for NZD is situated at 0.8320 (February 15 and 9 minimums), while resistance is found at 0.8420 (February 15 maximum).


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#530 ryuroden

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Posted 17 February 2012 - 12:37 PM

BofA: euro may renew 2-month minimum


Analysts at Bank of America claim that the single currency may fall to more than 2-year minimum versus the greenback.

The specialists note that if euro doesn’t manage to hold at the current levels and resume decline closing the day below $1.3026, this would mean another wave of the downtrend within which EUR/USD has been trading since May 2011. In such case the pair will move down to $1.2644/$1.2510.

Euro’s moving average convergence/divergence, or MACD, was at 0.0036, below the signal line of 0.0045. A reading below the signal line indicates the euro may decline.


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#531 ryuroden

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Posted 17 February 2012 - 02:46 PM

Commerzbank: comments on GBP/USD


Analysts at Commerzbank claim that British pound may rise higher versus the greenback testing 200-day MA at $1.5919.

The specialists note, however, that sterling’s advance will be limited, if not by this level, then by the next resistance at $1.5967 and $1.6016 (55-week MA).

According to the bank, support for the pair GBP/USD lies at $1.5603/1.5580 (55-day MA and 50% Fibonacci retracement).


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#532 ryuroden

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Posted 21 February 2012 - 08:41 AM

Euro strengthened on Greek bailout news


The single currency went up versus the greenback erasing earlier decline and reached 3-month maximum against Japanese yen as the euro-zone finance ministers agreed on a second bailout package for Greece saving the nation from default in March. The package includes a 53.5% write-down for Greek bondholders – it’s a bigger trade-off from the nation’s private creditors than initially expected. Debt-swap bonds will have a coupon of 2% in 2014, 3% in 2015-2020 and 4.3% after that. ECB President Mario Draghi expressed his approval of the deal.

Euro shorts are covered now. The pair EUR/USD opened around $1.3250 and started sliding lower as the press conference was constantly delayed. The market players were pretty sure that there would be an agreement and there were enough longs on an intraday basis and these longs kept getting squeezed out, the longer the decision was delayed. After the announcement euro made 70-pip spike up. Currently the pair came close to the opening levels as stop-losses were all done.

Analysts at Credit Suisse claim that euro will likely be capped as although “short-covering is supporting the euro, this much was within expectations”. In addition, EUR/USD will get under pressure due to improving US economy. The specialists think that the pair will trade in range between $1.3150 and $1.3350 for the rest of the global day and between $1.3050 and $1.3350 during the coming week.


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#533 ryuroden

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Posted 21 February 2012 - 10:52 AM

UBS: dollar’s long-term advance against euro will go on


Analysts at UBS claimed that the single currency will continue declining versus the greenback in the longer term from the record maximum at $1.6038 reached in July 2008.

The specialists think that US dollar will break its negative relationship with oil prices as the United States become more independent of foreign energy supply due to the development of shale-gas deposits and an increase in domestic oil production.


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#534 ryuroden

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Posted 21 February 2012 - 11:54 AM

More comments about euro’s outlook


ING: the Greek deal might have bought a couple of months' worth of stability to the euro-zone sovereign-debt markets. The pair EUR/USD may go up to test 2012 maximum at $1.3320 and rise to $1.3430/50.

Barclays Capital: the risk of Greece’s disorderly default reduced for at least a few quarters. Never the less, there still are the implementation risks. In addition, there are near-term risks associated with early elections and rise of political opposition.

Commerzbank: the skepticism about the euro is justified even after euro area’s finance ministers agreed to provide Greece with the second bailout. That isn’t positive for euro. The large majority of market players are finding it hard to believe that Greece will get through to 2020 without a further default.

BNP Paribas: Greek agreement won't support euro much. Many traders would like to sell euro on the rallies. All the same, if the agreement really does remove the risk of a Greek default markets will be looking to fund riskier bets with a suitable currency such as euro. As a result, the European currency is doomed to remain under pressure.


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#535 ryuroden

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Posted 21 February 2012 - 01:20 PM

Deutsche Bank, UBS: forecasts for USD/JPY


Analysts at Deutsche Bank think that the greenback may resume its decline versus Japanese yen. In their view, the effects of the latest round of easing conducted by the Bank of Japan will fade. Last week the Bank of Japan added 10 trillion to it's now 65 trillion yen quantitative easing program leaving the benchmark interest rate at the record low of 0.1%.

The specialists claim that USD/JPY may decline from the current maximums in the above 79.50 back to 75 yen area. According to the bank, Japan’s external investment position is large and growing, so its current-account balance will support yen’s strength for some time. Currency effects from Japan's shifting trade dynamics are being overplayed and the country will probably return to a trade surplus this year. The only way to prevent such outcome is additional stimulus from Japan’s monetary authorities.

Analysts at UBS, however, don’t share the view of Deutsche Bank. The specialists reduced their 1- and 3-month forecasts for Japanese yen from 77 yen per dollar to 80 and 85 yen per dollar. As the reason for the downward revision the specialists cited easing conducted by the BOJ.


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#536 ryuroden

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Posted 22 February 2012 - 09:29 AM

BoE minutes coming: watch the pound


Today the market’s looking forward to the release of the Bank of England’s February meeting minutes (9:30 a.m. GMT). The minutes will unveil how the central bank’s 9-member Monetary Policy Committee votes on the expansion of asset purchase program by 50 billion pounds ($79 billion) to 325 billion pounds this month.

The consensus forecast is that the decision was unanimous. The experts, however, don’t rule out the possibility of 1-2 dissenting votes from the hawks against more QE.

The BoE decided to conduct additional quantitative easing in order to help weak UK economy: Britain’s revived Q4 GDP figures which are released on Friday will likely confirm that the nation’s economy contracted by 0.2% in the final 3 months of 2012 (q/q).
BoE Deputy Governor Charlie Bean claimed that despite the news that Greece will get the second bailout, serious risks remain and the debt crisis won’t be over. Such situation will hurt Britain hitting its exports and finance and affecting its consumer and business confidence. The official was also worried about the fate of other peripheral European economies.

On the one hand, it’s necessary to note that some positive consumption and housing data have been released so far, so the BoE may improve its fundamental outlook for the UK economy. In this case pound will be poised to strengthen. On the other hand, cautious tone may signal that the door is open to expand the central bank’s asset purchase program beyond 325 billion pounds – such outcome would increase bearish pressure on sterling.

Since the beginning of the year the pair GBP/USD consolidated between $1.5680 and $1.5930. Analysts at Lloyds say that sterling won’t be able to rise above $1.6000 versus the greenback in the near term. Specialists at Commerzbank think that the pair may test 200-day MA and then slide back to $1.5645.


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#537 ryuroden

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Posted 22 February 2012 - 01:45 PM

Nomura: USD/JPY forecast revised up


Analysts at Nomura revised up their forecast for USD/JPY from 75 to 79 yen by the end of the first quarter of 2012. The forecasts for the end of Q2 and the year-end were left unchanged at 80 and 81 yen consequently.

The specialists claim that odds that the greenback will resume its decline decreased due to the Bank of Japan’s additional quantitative easing, better US macroeconomic data and easing tensions in the euro area.

Nomura draws investors’ attention to the fact that Japanese central bank decided to increase investment in the government bonds with maturity of 1-2 years. This would cap the possibility of 2-year yield growth. As a result, the yield differential between 2-year US and Japanese securities will increase encouraging USD/JPY. In addition, internal capital flows also point at yen’s gradual depreciation.

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#538 ryuroden

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Posted 24 February 2012 - 10:10 AM

Barclays Capital expects USD/JPY to consolidate


Analysts at Barclays Capital claim that the greenback will consolidate between 78.50 and 80.50 yen ahead of the US February jobs report which is released on March 9.

The specialists think that after the pair USD/JPY has made such an impressive progress this month rising from 76 to 80.50 yen it currently lacks strong indicators for further advance, so the market will likely stand still ahead of the labor market data. According to the bank, the risk of the Federal Reserve announcing another round of quantitative easing is low.


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#539 ryuroden

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Posted 27 February 2012 - 12:28 PM

USD/JPY again renewed maximums


The greenback made a spike higher today spiking to almost 4-month maximum at 81.67 yen due to improved US economic data and the increased possibility that the crisis in the euro area will be contained. After reaching the new high dollar backed down correcting after a rapid advance.

Analysts at Ueda Harlow claim that investors aren’t afraid to sell yen anymore as they believe that the worst case scenario for global economy will be avoided. The G-20 is making efforts to solve the debt crisis, note the specialists.

Strategists at UBS think that the pair USD/JPY is now trending upwards. In their view, the Bank of Japan has finally shown its determination to use aggressive approach combating yen’s appreciation.

Analysts at Westpac claim that US currency is currently overbought and will return to 79 yen and then resume growth. According to the bank, USD/JPY will meet resistance at 82 yen. If the pair breaks above this level, it will be able to rise to 85.60 yen.


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#540 ryuroden

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Posted 27 February 2012 - 12:57 PM

Commerzbank: comments on USD/CHF


Technical analysts at Commerzbank believe that the greenback may fall versus Swiss franc to 0.8788/71 (78.6% Fibonacci retracement and 200-day MA).

According to the bank, key support for USD/CHF is situated at 0.8568 (October minimum).

The specialists are bearish on US currency as it dropped below 0.8960 (61.8% Fibonacci retracement of the pair’s advance from October to January). In their view, the short-term outlook remains bearish as long as US dollar trades below resistance in the 0.9066/88 area.

In the medium term Commerzbank expects USD/CHF to return to the levels around 0.9595 (January maximum).


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