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October/03/2011- Comments and forex-analytics from FBS

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October/03/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 03, 2011 4:36 pm

Wells Fargo: bearish EUR/USD forecast

Analysts at Wells Fargo are bearish on the single currency in the medium term. In their view, the pair EUR/USD will drop to $1.3200 by the end of this year and may slide to $1.2500 by the end of 2012.

The specialists believe that the weak economic outlook will hamper the results achieved due to the policymakers’ actions. In addition, the ECB’s approach has changed from the hawkish mode to the more dovish one. The central bank is likely to cut rates or conduct liquidity easing measures during the next few months.

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Deutsche Bank: EUR/USD is poised to decline

Analysts at Deutsche Bank point out that the European currency has fallen versus the greenback from the May maximums in the $1.4940 area to the levels below $1.3400.

In their view, euro’s decline is going to continue: the specialists expect EUR/USD to keep weakening during the next 12 months.

According to the bank, the pair will fall to $1.3000 in 3 months, then slide to $1.2700 by the end of the first quarter of 2012 and then reach $1.2500 in 12 months time.

The strategists think that euro’s dynamics will depend on the actions the euro zone’s policymakers will make to stem the crisis. Here it’s necessary to take the account the monetization risks and the downgrade risk of the member nations and the European Financial Stability Fund (EFSF) itself.

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Re: October/03/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 03, 2011 4:41 pm

Deutsche Bank: USD/JPY forecast

nalysts at Deutsche Bank claim that USD/JPY will test in the short term the levels below 75 yen.

The specialists expect the greenback to trade sideways versus Japanese yen in the 78.00 area during the first half of 2012. According to the bank, the global economic slowdown will keep encouraging high demand for yen. Japanese monetary authorities will likely limit themselves by the verbal interventions as long as the exchange rate moves slowly.

Later the pair will strengthen to 84.00 in the third quarter of 2012 and to 90.00 by end of the next year.

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Euro: this week’s events and analysts’ comments

The single currency remains near the 8-month minimum versus the greenback at $1.3313 hit earlier today and close to the 10-year minimum against Japanese yen at 101.92 hit on September 26.

The market is concerned about the possibility of Greece’s default and the health of the euro zone's banking sector.

Coming events

The focus this week will be on the monetary policy and growth. The European Central Bank meets on Thursday, October 6. Some investors are looking forward to a 25-basis-point rate cut even despite high September inflation data. The ECB President Jean-Claude Trichet speaks on Tuesday, October 4, at 1:00 pm GMT.

It’s also necessary to note that today begins 2-day meeting of the European finance ministers. The Ecofin is expected to put pressure on Greece to implement agreed structural reforms and to discuss the ways of increasing the European Financial Stability Facility’s (EFSF) financial firepower.

The decision about granting Greece the sixth tranche of the bailout – 8 billion-euro ($11 billion) – is postponed to the middle of October as the nation tries to reduce its huge budget shortfall.

Bearish forecasts

UBS: EUR/USD shorts will increase.

ING: euro will fall to $1.30/1.31.

Commerzbank: the pair will slide down to $1.2860 (2010 minimum) and $1.2000. Key resistance in the short term is seen at $1.3937 (September 15 maximum).

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Re: October/03/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 03, 2011 4:43 pm

Ichimoku. Weekly forecast. GBP/USD

Weekly GBP/USD

The prices remain within the Ichimoku Cloud. All lines of the indicator stay horizontal (1, 2, 4), so sterling is likely to consolidate within Kumo.

The Turning line (1) and the Standard line (2) as well as the upper border of the Ichimoku Cloud act as resistance for GBP/USD.

The Cloud has recently switched to the bearish mode. However, the negative Kumo is still very thin – the bears haven’t gained much power yet.

As a result, the bulls may be able to strengthen their positions. It’s quite possible that the pound will manage to rebound from Senkou Span B (3).

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Daily GBP/USD

On the daily pound managed last week to overcome resistance provided by Tenkan-sen (1) and consolidate above it. Never the less, at the beginning of this week the pair once again tested the levels below the Turning line (1).

The descending Ichimoku Cloud (3, 4) keeps widening that means that the bears are dominating at the market. The Standard line (2) also acts as resistance.

The previous minimums hit on September 22 and 23 play the role of support. At the moment all the lines of the indicator are directed horizontally (1, 2, 3, 4) that means that pound will likely remain within the current range moving sideways.

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Re: October/03/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 03, 2011 4:48 pm

Ichimoku. Weekly forecast. USD/JPY

Weekly USD/JPY

On the weekly chart the pair keeps trading between 76 and 78 yen as it has been doing since the beginning of August. High demand for yen is combined with risk of BoJ interventions.

At the same time, it’s necessary to note that the Turning line went sharply down (1), while the Standard line also began deviating down (2). The bearish Ichimoku Cloud has also widened a bit (3, 4).

Tenkan-sen (1) and Kijun-sen (2) still hold the strong “dead cross” in place (5) providing resistance for the prices.

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Daily USD/JPY

On the daily USD/JPY chart the prices were moving gradually up during the last several days – the greenback has overcome the Turning line (1) and got support from it and even ested the Standard line (2).

Tenkan-sen (1) and Kijun-sen (2) still hold in place the strong “dead cross” (5) formed below Kumo.

As a result, all the signals mean that it would be very hard for the bulls to keep moving up – the pair still finds itself under pressure provided by the bearish Ichimoku Cloud (3, 4).

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Re: October/03/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 03, 2011 4:53 pm

BMO Capital: trading recommendations ahead of NFP

US September Non-Farm Payrolls data is released on Friday, October 7, at 12:30 pm GMT. The figures will be watched more than ever after US jobs growth stagnated in August.

Analysts at Bank of America Merrill Lynch expect to see the figure of 75,000, but warn that the risk is to the downside.

Strategists at BMO Capital say that if the market expects NFP to be somewhere close to 50,000 and the indicator posts 70,000, one should sell USD/CAD. If the published NFP figure finds itself between 70,000 and 30,000, it would be better to refrain from actions. If the figure comes below under 30,000, the specialists recommend buying the greenback versus Swedish krona.

According to BMO, the first scenario is the most likely. As a result, the specialists advise investors to sell US dollar versus its Canadian counterpart at 1.0400 stopping just above 1.0470 and targeting 1.0155.

At the same time, economists at J.P. Morgan point out that investors need to be cautious with trade like this watching other data released on Friday – Canadian nonfarm payrolls and Ivey PMI survey.

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