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November/02/2011- Comments and forex-analytics from FBS

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November/02/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Nov 02, 2011 4:24 pm

Westpac, HSBC on the outlook for kiwi

New Zealand’s dollar weakened this week versus its US counterpart as investors’ risk sentiment was affected by the news about the referendum in Greece.

Currency strategists at Westpac believe that NZD/USD will keep declining during the next few weeks moving down to the levels in the $0.7000 area. In their view, support for the pair is situated at $0.7910, while resistance stays at $0.8050.

Analysts at HSBC, however, think that there won’t be any clear trend for kiwi until the FOMC and ECB meetings and US payrolls this week. It’s necessary to note that the specialists don’t expect the Fed to trigger the QE3 as there should be a deflationary environment for that.

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J.P.Morgan: Euro versus Japanese Yen and US dollar

Analysts at J.P. Morgan claim that in the situation of uncertainty caused by the announcement of the Greek referendum one should sell the single currency versus Japanese yen at 107.00 stopping at 109.25 and targeting 102.00. According to the economists, the unilateral intervention in Japan won’t be effective.

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Re: November/02/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Nov 02, 2011 4:25 pm

Commerzbank: technical comments on EUR/USD

Concerns about Greece’s future made euro test the levels below October minimums in the $1.3655/52 zone hitting the $1.3600 area yesterday.

Technical analysts at Commerzbank expect EUR/USD to through consolidation during the coming sessions. Resistance levels at $1.3855 and $1.3930 are going to limit euro’s advance today. Support is found at $1.3610 and $1.3550.

Then the pair will resume its down move. The specialists think that the European currency will slide to $1.3381/60 (late September minimums) and then to $1.3145 (October 4 minimum).

The bank advises investors to avoid trading the pair until the fate of the latest bailout package becomes clear.

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Agenda for the euro area in November

– Wednesday, Nov. 2: French President Nicolas Sarkozy and German Chancellor Angela Merkel meet with Greek, IMF and EU officials in Cannes. Portuguese T-bill auction. Euro-zone manufacturing PMI data.

– Thursday, Nov. 3: ECB policy meeting. Mario Draghi’s first press conference as ECB President. Spanish and French bond auctions.

– Thursday, Nov. 3 – Friday, Nov. 4: G-20 leaders meet in Cannes.

– Friday, Nov. 4: Greek government confidence vote. Euro-zone services PMI data.

– Monday, Nov. 7: Eurogroup finance ministers meet.

– Tuesday, Nov. 8: EU finance ministers meet. Greek T-bill auction.

– Thursday, Nov. 10: Italian T-bill auction.

– Friday, Nov. 11: 2.0 billion euro of Greek T-bills mature.

– Monday, Nov. 14: Italian bond auction.

– Tuesday, Nov. 15: Greek T-bill auction.

– Wednesday, Nov. 16: Portuguese T-bill auction.

– Thursday, Nov. 17: Spanish and French bond auctions.

– Friday, Nov. 18: 1.3 billion euro of Greek T-bills mature.

– Sunday, Nov. 20: Spain holds general election.

– Thursday, Nov. 24: General strike in Portugal.

– Friday, Nov. 25: Italian T-bill/bond auction.

– Tuesday, Nov. 29: Italian bond auction. Final Portuguese budget vote.
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Re: November/02/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Nov 02, 2011 4:27 pm

Morgan Stanley: euro and political factors

Analysts at Morgan Stanley look into political factors which will determine dynamics of the single currency versus the greenback.

Today German Chancellor Angela Merkel and French President Nicolas Sarkozy meet with the Greek government and the IMF officials ahead of 2-day G20 summit beginning tomorrow, but the specialists think that euro’s advance on this news won’t last long.

The strategists urge traders to pay attention to the confidence vote in Greek government that is taking place on Friday. In their view, the most bearish outcome for euro would be if the Prime Minister George Papandreou wins as that will lead to the referendum with potentially negative results. If Greek say “no” to the bailout package, Greece will be doomed to announce default.

If Papandreou loses, the government will fall and the new elections will be very likely. In such case the new budget reform measures and potentially delay the next round of bailout funds from the EU will be delayed. This scenario, however, would be more positive for euro as this way there will be no referendum.

Anyway, the medium term outlook for euro, according to Morgan Stanley, is negative.

According to the bank, EUR/USD has broken through the major support levels and is now poised down to $1.3365 and $1.3145 (October 4 minimum). Morgan Stanley expects the pair to end 2011 at $1.30 and then drop to $1.25 in the first quarter of the next year.

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CIBC: 12-month forecast for EUR/USD

Analysts at CIBC World Markets expect the single currency to trade between $1.3400 and $1.3800 during the next 12 months.

According to the specialists, in December EUR/USD will consolidate in the $1.3800 area. Then it will fall to $1.3400 in March next year and rebound to $1.3500 in June and to 1.3600 in September to return back to $1.3800 in December 2012.

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