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November/04/2011- Comments and forex-analytics from FBS

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November/04/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Nov 04, 2011 4:39 pm

Greece: the referendum story

Everything about the euro area and Greece in particular seems to change with great speed. At the beginning of the week the markets were shaken by Greek Prime Minister George Papandreou’s unexpected announcement of the referendum on the bailout package.

The EU policymakers’ reaction was abrupt as they froze credit payments to Greece and raised the question of the nation’s membership in the monetary union. Then Greek opposition expressed readiness to compromise, Papandreou backed away with the referendum idea and investors’ concerns ease. The head of Greek government has no intention to step down. Now Greek authorities discuss the prospects if setting up a transitional government with the participation of the opposition to make sure Greece will get aid payment.

The analysts in Deutsche Bank caught the point claiming that trading EUR/USD has become so volatile that it has become too risky to open significant positions for longer than 5 minutes.

The pair EUR/USD rose from 3-week minimum in the $1.3600 area to the levels above $1.3800. Strategists at Westpac say that the single currency has no strength for the sustainable rally but there is some relief as the threat of referendum that would very likely bring “no”-result has been removed.

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UBS: technical levels for the major pairs

EUR/USD: the major support is found at $1.3567. If the single currency breaks below this level it will fall to $1.3406. Resistance is situated at $1.3871 and then at $1.4003.

GBP/USD: resistance lies at $1.6097. If the pair overcomes this level it will be poised up to $1.6167. Support is at $1.5825.

USD/JPY: resistance is seen at 78.42 and 78.98 yen and support – at 77.43 and 76.94 yen.

USD/CHF: support is situated at 0.8718 and 0.8568 (October 27 minimum). Resistance is found at 0.8960.

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Re: November/04/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Nov 04, 2011 4:42 pm

Commerzbank: comments on GBP/USD

ritish pound consolidated versus the greenback at the levels around $1.6000.

Technical analysts at Commerzbank believe that as long as GBP/USD stays below the 200-day MA at $1.6140, the outlook for the pair will be negative.

The bearish pressure would ease only if British currency overcomes 61.8% Fibonacci retracement at $1.6185. In such case pound will be poised up to 78.6% retracement of the decline from May at $1.6430.

The specialists, however, think that sterling is more likely to break support at $1.5875 (55-day MA).

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NAB: market awaits NFP data

he market’s looking forward to get another confirmation of the coming QE3: many traders expect that US jobs growth slowed in October, while the unemployment rate remained high at 9.1%. Economists surveyed by Bloomberg project Non-Farm Payrolls to increase last month by 95K after adding 103K in September.

Analysts at National Australia Bank claim that even if the NFP reading beats economists’ forecasts but the unemployment rate stays unchanged, traders will see this as a reason for additional monetary stimulus and this will weight on the greenback.

Analysts at Bank of Tokyo-Mitsubishi UFJ point out that for unemployment to decline by half a percentage point over a year US employers have to hire about 150K workers a month. According to the labor statistics, by the beginning of October American economy had recovered about 2.09 million of the 8.75 million jobs lost as a result of the 18-month recession that ended in June 2009.

The NFP figures and the jobless rate are released today at 12:30 GMT.
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Re: November/04/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Nov 04, 2011 4:44 pm

RBS: sell euro versus Canadian dollar

Currency strategists at Royal Bank of Scotland see the trading opportunity on the current European mess.

The specialists note that the euro zone’s economic outlook is very dim, while the prospects of Canadian economy seem to be much more favorable. According to RBS, it would be beneficial to sell the single currency versus Canadian dollar in the longer term.

The analysts underline that trading EUR/CAD is a better idea then EUR/USD as the latter is strongly correlated with the S&P500 index that tends to jump on positive news from Europe, so this type of trade doesn’t suit here.

As a result, the bank’s recommendation is to open shorts on EUR/CAD in the $1.3925 area stopping above $1.4380 and targeting the levels just below $1.2800.

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