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September/28/2011- Comments and forex-analytics from FBS

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September/28/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Sep 28, 2011 4:34 pm

Mizuho: demand for yen remains high

Japanese yen is strengthening versus the greenback on investors’ demand for safe haven.

Later in the day the market expects some discouraging data – orders for US durable goods are seen declined by 0.4% in August from July level. The figures are released at 12:30 p.m. GMT.

In addition, there are talks that Japanese exporters are repatriating their overseas earnings before the end of the third quarter and the fiscal half-year end that comes on Friday.

Analysts at Mizuho note that the markets are still dominated by uncertainty caused by the euro zone’s debt problems and concerns about the world’s economic slowdown. In their view, yen will continue being quite attractive for investors.

Strategists at Citibank note that the US dollar still has downside potential. The specialists claim that today USD/JPY will remain trading between 76.30 and 77.30.

The pair has been staying between 76 and 78 yen since the Bank of Japan’s intervention at the beginning of August.

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UBS, RBS: forecasts and comments on EUR/USD

The single currency keeps crawling up versus the greenback from the 8-month minimum at $1.3362 hit on Monday.

Technical analysts at UBS believe that the current upward correction can bring euro higher, but then it will resume its slump. The specialists kept 1-month target for EUR/USD at $1.30 and the 3-month estimate – at $1.20. As for the coming political decisions, the bank is rather optimistic saying that Greece will likely get the sixth tranche of the bailout and that the odds are that Germany will ratify the changes to the EFSF tomorrow.

At the same time, the Royal Bank of Scotland cut EUR forecasts yesterday to $1.33 by the end of 2011 and $1.41 by the end of 2012. RBS underlined that there are strong chances that the ECB will lower the borrowing costs amid the rising risk of the region’s falling into recession the next year.

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Re: September/28/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Sep 28, 2011 4:43 pm

Commerzbank: comments on EUR/USD

The single currency went up versus the greenback from the 8-month minimum at $1.3362.

Technical analysts at Commerzbank note that euro has reached the level of 23.6% Fibonacci retracement of the decline from August at $1.3640. In their view, EUR/USD upward correction is over at this point.

It’s necessary to say, however, that the specialists don’t rule out the possibility of the pair’s advance to $1.3723 (23.6% retracement of the move down from May) and to $1.3815. According to the bank, resistance for the European currency is found at $1.3936 (September 15 maximum).

If euro resumes moving down, it will drop to $1.3428/1.3360 and then to $1.2870 (2011 minimum). The bank’s long-term target for EUR/USD remains at $1.20.

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Goldman Sachs: euro and the situation in Italy

Economists at Goldman Sachs claim that unstable political situation in Italy threatens the positive outlook for the single currency.

In their view, in the worst case continued reluctance of the Italian authorities to fight the national economy’s structural weaknesses and the worsening public relations may keep affecting the market’s attitude to Italian bonds.

Never the less, the analysts are hopeful. The bank believes that Italy will take a more pro-active approach to the structural reforms. According to Goldman, this will help bring the debt levels down into sustainable territory even if Italian economic growth continues to slow. .

The bank sees euro at $1.40 in 3 months, $1.45 in 6 months and $1.50 in a year. The strategists warn, however, that any signs that the worst-case scenario begins to come true will affect the forecasts.

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Re: September/28/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Sep 28, 2011 4:47 pm

Commerzbank: bullish outlook for USD/CAD

Last week the greenback surged versus its Canadian counterpart from the levels in the 0.9800 zone to 1-year maximum at 1.0385 reached on September 26. Then USD/CAD faced resistance of October 2010 high and eased down to $1.0220.

Technical analysts at Commerzbank claim that support for the pair is found at 1.0140/09 (August, May and June 2010 minimums) and 1.0058/00. In their view, US dollar will recoil up from these levels and resume growth.

According to the bank, US currency will manage to strengthen to the 200-week MA at 1.0581.

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