EUR/USD
The bounce off support at 1.4325 brings the focus onto the 1.4540/50 resistance area. The push into fresh three-week highs above 1.4449 recovery strengthens the 1.4325 higher low, and a bear channel resistance line at 1.4550 this week is within striking distance, protecting 1.4606. Only a setback below 1.4429 would concern EUR bulls and expose the 1.4325 higher low.
GBP/USD
The push above 1.6094 creates scope for further gains to the June 22 lower high at 1.6262. This week's lows at 1.5911 have become a potential near-term bear failure, meaning the origin of that bear wave at 1.6262 will become the focus of attention, having neutralised the GBP bear trend for now. Only a reversal below 1.5960 would bring the focus back onto the 1.5911 lows.
USD/JPY
Upgrades the setback off 81.27 to expose projected support at 80.20. The push below 80.55 has left Tuesday's high at 81.27 stranded, and a break below 80.20 would leave 81.27 as a potential bull failure high, exposing the June 22 higher low at 80.01. Keeping 80.20 intact would prompt a recovery back to the 80.66 area, but only above there would stabilise the falling USD.
AUD/USD
The push above 1.0717 puts AUD bulls in control, and paves the way for more gains to the important June 3 lower high at 1.0776. A push above 1.0776 is required to confirm Monday's 1.0391 low as a bear failure, and create room another wave of AUD bull pressure towards the May 11 reaction high at 1.0890. Congestion between 1.0606 and 1.0645 will look to cushion corrective weakness, but downside risk is limited.
FOREX FOCUS
Greece's austerity vote will soon look like nothing more than a minor distraction. With debt financing costs still rising and the European Central Bank likely to continue raising interest rates next week, the risk of a payment default by Greece or another peripheral euro-zone country will continue to increase. Pitched battles on the streets of Athens and the narrowest of votes in the Greek parliament may have grabbed headlines in recent days as the country struggles to convince the world that it is serious about repaying its debts. However, the scale of the debt problem engulfing the euro zone continues to grow, with the international investor community still voting with its feet. More and more are walking away or demanding either higher returns or more costly insurance premiums for holding euro-zone debt. While the market's focus has been on Greece, with that country's own yield spreads and credit default swaps narrowing on hopes that Greek members of parliament would see sense, the spreads and prices of other peripherals such as Portugal and Ireland have continued to widen. And there is little reason why that widening should stop. For a start there is little assurance that plans to roll over Greek debt are going to be successful. On paper, proposals for a voluntary negotiation of the terms and maturities, like those of the so-called Brady bonds for Latin American debtors in the 1980s, may look promising. But in practice the whole exercise looks doomed with many, including the ECB's executive board member Juergen Stark, warning this would still be a de facto default by Greece. And a de facto default by Greece means one thing: credit rating agencies, as at least one has promised already, will start downgrading peripheral euro-zone debtors in general.
EUROPE
In European trading hours Thursday, the dollar fell against the yen, weighed down by a stronger euro and partially on selling by Japanese exporters for the end-of-the-month closing of books, dealers said. The euro was stronger against the dollar, up at $1.4484. However, although the situation in Greece and prospects of an imminent rate hike by the ECB helped the euro, Germany's jobless data caused the single currency to pare gains.
ASIA
The euro rose above $1.4500 to a three-week high in Asia Thursday after the Greek parliament's passage Wednesday of new austerity measures appeared to make a near-term default unlikely. Buying by overseas investors led the common currency higher, with stop-loss buying orders around $1.4450 accelerating the gains. The euro touched $1.4519, its highest since June 10. Expectations for the European Central Bank to raise interest rates at a meeting next Thursday are also helping the euro, dealers said. Assuming Greece passes legislation later in the global day to implement the austerity bills, the euro could trend higher in the coming sessions, they said. Dai Sato, a senior vice president of the foreign exchange division of Mizuho Corporate Bank, said the euro could climb as high as $1.4700 in the near term. The possibility that Greece will avoid default soon is "making people optimistic in the near term, although people are pessimistic (about the Greek situation) over the longer term," Sato said. Gains in Chinese and other regional share markets also buoyed sentiment toward risk-sensitive currencies such as the euro, dealers said. Other gainers included the New Zealand dollar, which marked a fresh post-float high against the dollar at $0.8313.
WORLD
Investors bid up the euro Wednesday in New York after Greek lawmakers ignored violent protests in the streets and passed an austerity bill that kept alive a second round of bailout funding from European authorities. The euro traded above $1.4400 to two-week highs versus the dollar as that vote reduced the chances of an imminent Greece debt default. The focus now shifts to a vote Thursday to put the measures in motion and to a Sunday meeting of euro-zone finance ministers to plan the second bailout. But investors seemed to be encouraged by European officials' signals on this meeting as well. Greece's approval of new austerity measures is an important step for the country and for the stability of the euro as a whole, German Chancellor Angela Merkel said in Berlin. "We may see a little bit more of this rally" with the euro following the first Greece vote, said Scott Ainsbury, who helps manage about $8.5 billion in currency at New York-based hedge fund FX Concepts. The vote at least seemed to cap the Greece problem for now. But he cautioned against extrapolating too much from Wednesday's common currency move.
Kamis, 30 Juni 2011
Rabu, 29 Juni 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
The recovery off 1.4102 is approaching key resistance levels at 1.4413 and 1.4442. However, the structure of the bull wave from 1.4102 suggests there is scope for more gains towards the 1.4471 area. Tuesday's higher low at 1.4237 needs to hold in order to keep the near-term tone bullish for EUR, and only below there would turn the situation negative, exposing 1.4168.
GBP/USD
The corrective rally has room to extend to the 1.6079 area. Keeping support at 1.5911 intact still leaves the 1.5901 downside target unmet, and therefore at risk of becoming a significant bear failure. However, only a sustained break above projected resistance at 1.6094 would concern GBP bears at this stage. The wider bear threat still weighs, and a push below 1.5954 would expose the 1.5911 lows, exposing 1.5859.
USD/JPY
The push higher is targeting key resistance at 81.48. A 1.618 Fibonacci extension target lies just below there, at 81.40, and a fresh wave of USD bull pressure will be required to force a break higher towards 81.77. There is scope for downside consolidation back to the 80.66 area, but only below 80.66 would undermine the bullish USD outlook, which is protected by 80.93.
AUD/USD
The strong recovery off 1.0391 is looking to extend to the 1.0592/1.0603 resistance area. The push above 1.0551 opens the 1.618 Fibonacci extension target at 1.0592, which lies close the June 24 lower high at 1.0603, and these levels combined should create an upside boundary for the near-term. A fresh wave of AUD bull pressure is required to force a break through 1.603, strengthening the 1.0391 low and opening lower highs at 1.0653 and 1.0717. Corrective weakness will attract support while above 1.0478, and only below there would suggest a return to the 1.0391 low is on the cards.
FOREX FOCUS
AUD/JPY is extending the strong recovery off 84.06 and is within striking distance of the June 15 peak at 86.40. In conjunction with the significant recovery in AUD/USD, an across-board basing process appears to underway for AUD. A push above 86.40 would leave Monday's 84.06 low as a bear failure, and attract further gains towards the June 1 lower reaction high at 87.62. Pivotal support for the short-term lies in the 85.00 area, which is protected by 85.55. AUD/JPY is at 86.05.
EUROPE
A cautiously optimistic tone prevailed in European trading hours Wednesday as the euro modestly strengthened ahead of Greece's parliamentary vote on crucial austerity measures. The 17-country currency edged above $1.44 against the dollar, but still lost a little ground against the Swedish krona due to nagging concerns related to the vote on a EUR28 billion ($40 billion) program of spending cuts and tax increases that Greece has promised its international creditors. "Today is Greece or bust," said Richard Cochinos, a foreign exchange strategist at Bank of America Merrill Lynch. To a large extent, market participants expect parliament to be able to pass the crucial austerity package shortly after 1100 GMT. If the package is rejected, the negative reaction could be quite violent, market participants say. "There is a bit of asymmetry going into the outcome with upside potential for the euro relatively small and the downside large," said Daragh Maher, deputy head of global foreign exchange strategy at Credit Agricole in London. Even if Greece's vote is passed as expected, the risks will not totally be removed.
ASIA
The euro was steady against the dollar Wednesday in Asia as investors awaited the outcome of a key Greek vote on austerity package due later in the day. Greece's parliament is expected to start voting around 1100 GMT on a EUR28 billion ($40 billion) program of spending cuts and tax increases the country has promised to its international creditors. Gains in most Asian stock markets also helped maintain market risk-sentiment, providing some support for the higher-yielding euro, dealers said. Japan's Nikkei Stock Average rose 1.1% while South Korea's Kospi Composite gained 1.3%. The market has largely factored in passage of the crucial austerity package by the parliament, dealers said. For that reason, if the package is rejected, market risk-sentiment will likely deteriorate sharply, prompting investors to sell off the euro and move into the safety of the greenback, dealers said. If the austerity package passes, the euro will likely remain rangebound versus the dollar, with investor focus shifting to another phase of the Greek rescue program, dealers said.
WORLD
The euro rose Tuesday in New York on investors' growing hopes that Greece would pass austerity measures and avoid defaulting on its debt, while German banks agreed to consider rolling over some Greek government bonds. Despite rioting in Athens, Greece's parliament is expected to vote for crucial austerity measures Wednesday. Approval is needed for any future assistance for the country. Another supportive factor for the euro was German banks agreeing in principle to consider rolling over about $10 billion in Greek government debt, provided there are assurances that the terms of the deal won't be seen by ratings agencies as putting Greece into default. Optimism on Greece boosted the commodity-linked and growth-sensitive Australian dollar, which soared by nearly 1% versus the U.S. dollar. The U.S. dollar in turn rose against the yen, surging to a four-week high after Treasury yields hit session highs following poor demand for safe-haven five-year Treasury notes at auction. "The short version of it is that those who needed to hedge a Greek risk have long done it and some are looking to put some risk back which ever way they do it," said Sebastien Galy, currency strategist at Societe Generale in London
The recovery off 1.4102 is approaching key resistance levels at 1.4413 and 1.4442. However, the structure of the bull wave from 1.4102 suggests there is scope for more gains towards the 1.4471 area. Tuesday's higher low at 1.4237 needs to hold in order to keep the near-term tone bullish for EUR, and only below there would turn the situation negative, exposing 1.4168.
GBP/USD
The corrective rally has room to extend to the 1.6079 area. Keeping support at 1.5911 intact still leaves the 1.5901 downside target unmet, and therefore at risk of becoming a significant bear failure. However, only a sustained break above projected resistance at 1.6094 would concern GBP bears at this stage. The wider bear threat still weighs, and a push below 1.5954 would expose the 1.5911 lows, exposing 1.5859.
USD/JPY
The push higher is targeting key resistance at 81.48. A 1.618 Fibonacci extension target lies just below there, at 81.40, and a fresh wave of USD bull pressure will be required to force a break higher towards 81.77. There is scope for downside consolidation back to the 80.66 area, but only below 80.66 would undermine the bullish USD outlook, which is protected by 80.93.
AUD/USD
The strong recovery off 1.0391 is looking to extend to the 1.0592/1.0603 resistance area. The push above 1.0551 opens the 1.618 Fibonacci extension target at 1.0592, which lies close the June 24 lower high at 1.0603, and these levels combined should create an upside boundary for the near-term. A fresh wave of AUD bull pressure is required to force a break through 1.603, strengthening the 1.0391 low and opening lower highs at 1.0653 and 1.0717. Corrective weakness will attract support while above 1.0478, and only below there would suggest a return to the 1.0391 low is on the cards.
FOREX FOCUS
AUD/JPY is extending the strong recovery off 84.06 and is within striking distance of the June 15 peak at 86.40. In conjunction with the significant recovery in AUD/USD, an across-board basing process appears to underway for AUD. A push above 86.40 would leave Monday's 84.06 low as a bear failure, and attract further gains towards the June 1 lower reaction high at 87.62. Pivotal support for the short-term lies in the 85.00 area, which is protected by 85.55. AUD/JPY is at 86.05.
EUROPE
A cautiously optimistic tone prevailed in European trading hours Wednesday as the euro modestly strengthened ahead of Greece's parliamentary vote on crucial austerity measures. The 17-country currency edged above $1.44 against the dollar, but still lost a little ground against the Swedish krona due to nagging concerns related to the vote on a EUR28 billion ($40 billion) program of spending cuts and tax increases that Greece has promised its international creditors. "Today is Greece or bust," said Richard Cochinos, a foreign exchange strategist at Bank of America Merrill Lynch. To a large extent, market participants expect parliament to be able to pass the crucial austerity package shortly after 1100 GMT. If the package is rejected, the negative reaction could be quite violent, market participants say. "There is a bit of asymmetry going into the outcome with upside potential for the euro relatively small and the downside large," said Daragh Maher, deputy head of global foreign exchange strategy at Credit Agricole in London. Even if Greece's vote is passed as expected, the risks will not totally be removed.
ASIA
The euro was steady against the dollar Wednesday in Asia as investors awaited the outcome of a key Greek vote on austerity package due later in the day. Greece's parliament is expected to start voting around 1100 GMT on a EUR28 billion ($40 billion) program of spending cuts and tax increases the country has promised to its international creditors. Gains in most Asian stock markets also helped maintain market risk-sentiment, providing some support for the higher-yielding euro, dealers said. Japan's Nikkei Stock Average rose 1.1% while South Korea's Kospi Composite gained 1.3%. The market has largely factored in passage of the crucial austerity package by the parliament, dealers said. For that reason, if the package is rejected, market risk-sentiment will likely deteriorate sharply, prompting investors to sell off the euro and move into the safety of the greenback, dealers said. If the austerity package passes, the euro will likely remain rangebound versus the dollar, with investor focus shifting to another phase of the Greek rescue program, dealers said.
WORLD
The euro rose Tuesday in New York on investors' growing hopes that Greece would pass austerity measures and avoid defaulting on its debt, while German banks agreed to consider rolling over some Greek government bonds. Despite rioting in Athens, Greece's parliament is expected to vote for crucial austerity measures Wednesday. Approval is needed for any future assistance for the country. Another supportive factor for the euro was German banks agreeing in principle to consider rolling over about $10 billion in Greek government debt, provided there are assurances that the terms of the deal won't be seen by ratings agencies as putting Greece into default. Optimism on Greece boosted the commodity-linked and growth-sensitive Australian dollar, which soared by nearly 1% versus the U.S. dollar. The U.S. dollar in turn rose against the yen, surging to a four-week high after Treasury yields hit session highs following poor demand for safe-haven five-year Treasury notes at auction. "The short version of it is that those who needed to hedge a Greek risk have long done it and some are looking to put some risk back which ever way they do it," said Sebastien Galy, currency strategist at Societe Generale in London
Selasa, 28 Juni 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
The recovery off 1.4102 is showing signs of fatigue on the approach to key resistance at 1.4360/85. This resistance area protects both the June 22 reaction high at 1.4442, and the projected resistance line of a bear pennant continuation pattern at 1.4413. A push below 1.4250 would attract fresh EUR bear pressure back to the intraday higher low at 1.4168.
GBP/USD
The downside target at 1.5901 is still within striking distance, despite Monday's corrective rally. There is scope for more downside as GBP bears target the downwave equality target at 1.5859 as a minimum objective, and concerted weakness would pave the way for 1.5752 and 1.5675. Regaining ground above 1.6011 would provide temporary respite, but corrective upside risk is limited to 1.6094.
USD/JPY
The focus remains on the June 15 reaction high at 81.08, as USD bulls regain control of the short term. The probe above 80.80 keeps the 13-day uptrend line intact, and a break above 81.08 would pave the way for the 1.618 Fibonacci extension target at 81.40. Significant resistance lies at 81.48. Support at 80.60 has become pivotal for the short term, but only a sustained break below 80.48 would concern USD bulls.
AUD/USD
A decisive push below 1.0441 is underway, which exposes a support cluster between 1.0325 and 1.0250. Two 1.618 Fibonacci extension targets lie just above former range highs at 1.0250, where this bear wave is likely to find a significant long-term base. Regaining ground above 1.0539 is required to lift the tone.
FOREX FOCUS
The path of true love is never smooth, as the yen is about to find out. For many months, the Japanese currency has worked its charms, wheedling its way into the heart of the international investment community even as Japan itself suffered from a devastating earthquake and tsunami. Through all the ups and downs, the market's affection remained strong with investors preferring the yen against many other major currencies in times of global uncertainty. Signs are, however, that this is all falling apart even though the Japanese economy itself is staging a much more robust recovery from the earthquake than expected. The shift in affections is evident in the yen's performance against the Swiss franc, that other great safe haven love that investors tend to turn to. In recent months, the franc has risen steadily against the yen, showing that the Japanese currency is steadily losing its ranking in the safe haven stakes. It all appears to be part of a larger shift in affections as the market adjusts to the latest concerns about the global recovery and inflationary pressures. The timing for the yen might be ironic, given that new retail sales indicate that consumption has rebounded sharply and should soon return to pre-earthquake levels once supply constraints have eased. Industrial production figures and the latest Bank of Japan Tankan survey this week will also contribute to the view that the worst for the Japanese economy is over. However, this good news on the recovery isn't expected to translate into higher rate expectations, given the ongoing fiscal and political problems facing Japan. The currency strategy team at Commerzbank put it this way: "The yen cannot expect any support on the interest front, as the central bank cannot afford a vicious circle of rising interest rates leading to the increased probability of defaults and thus higher interest rates. As a result it will keep interest rates low and eventually that will have an effect on the yen."
EUROPE
Greece continued to hold currency markets in thrall in European trade Tuesday, as overnight buying interest in the euro faded, while the pound sagged as weak economic data rubbished the case for higher interest rates. With Greece on a 48-hour general strike, ahead of Wednesday's parliamentary vote on the strict budgetary measures upon which a crucial bailout depends, the single currency gave back some of its overnight gains as attention switched to the eleventh-hour struggle to stave off a Greek default. The euro was pretty much stuck in the $1.42s against the dollar while making some headway against the beleaguered pound for reasons more to do with the sombre outlook for the U.K. economy. The Swiss franc, the star turn of the past few weeks, continued to have another good outing. Over in Greece, embattled Prime Minister George Papandreou wants lawmakers to approve plans to cut spending by EUR28.6 billion by 2015. At the same time, Greek central bank governor Giorgos Provopoulos has waded into the debate, saying that taxpayers are at their limits. The battle lines are drawn but You-Na Park, strategist at Commerzbank, said she expects Papandreou to win through. "It will pass through. Doesn't look like there is any other way and that may spark a relief rally for the euro," she said, but added that any gains aren't likely to be big. After all the medium-term outlook for Greece won't be resolved and the amount of private sector participation is still undecided.
ASIA
The euro held steady against the dollar and the yen in Asia Tuesday as growing optimism that Greece will approve a package of austerity measures Wednesday prodded traders to refrain from making fresh bets. Earlier in the day, short covering that triggered stop-loss purchases above 1.4300 sent the single currency as high as $1.4330. But the gains were eroded later due to the absence of fresh news related to the Greek debt crisis. Positive news regarding Greece overnight and a rebound in the stock market are making it tough to sell the euro against the dollar," said Kuniyuki Hirai, manager at the foreign exchange trading department of Bank of Tokyo-Mitsubishi UFJ. European governments said Monday they want private creditors to roll over as much as EUR30 billion of Greek government bonds that come due by 2014. The proposal drafted by French banks and insurers calls for half of the proceeds from maturing Greek bonds to be reinvested in 30-year Greek bonds. Furthering the credibility of that plan, the European Central Bank said it is receptive to the French proposal on Greece, if it is voluntary. Traders in Tokyo said that with the situation turning for the better, all eyes are now on Wednesday's parliamentary vote on a EUR28 billion package of austerity measures in Greece.
WORLD
Investors' optimism about the prospect of a broad plan with European Union guarantees to roll over Greek debt that could involve private creditors and diminish the chance of default helped boost the euro Monday in New York. European governments have said they want private creditors to roll over as much as EUR30 billion worth of Greek government bonds that come due by 2014. The proposal drafted by French banks and insurers calls for half of the proceeds from maturing Greek bonds to be reinvested in 30-year Greek bonds. Furthering the credibility of that plan, the European Central Bank said it is receptive to the French proposal on Greece, if it is voluntary. Hopes that an austerity plan could pass in the Greek Parliament later this week also gave the currency support. "There is optimism on Greece" at the start of this new week, said Kathy Lien, director of currency research at GFT Forex in New York. There is a broad sense that most parties in the euro zone, and inside Greece itself, know what is at stake and won't let Greece fail. "Euro bears were covering today on optimism that [the likely passage of the austerity plan] is going to be positive for the euro," said Phil Streible, senior market strategist at Lind-Waldock in Chicago. The thinking now is that the euro could next head to $1.4300-$1.4325, he predicted. But the euro will then be susceptible as that good news wanes and more troubles present themselves, said Streible. To that end, "I was selling $1.48 August calls today and putting in orders for $1.40 September puts," for the euro, he said.
The recovery off 1.4102 is showing signs of fatigue on the approach to key resistance at 1.4360/85. This resistance area protects both the June 22 reaction high at 1.4442, and the projected resistance line of a bear pennant continuation pattern at 1.4413. A push below 1.4250 would attract fresh EUR bear pressure back to the intraday higher low at 1.4168.
GBP/USD
The downside target at 1.5901 is still within striking distance, despite Monday's corrective rally. There is scope for more downside as GBP bears target the downwave equality target at 1.5859 as a minimum objective, and concerted weakness would pave the way for 1.5752 and 1.5675. Regaining ground above 1.6011 would provide temporary respite, but corrective upside risk is limited to 1.6094.
USD/JPY
The focus remains on the June 15 reaction high at 81.08, as USD bulls regain control of the short term. The probe above 80.80 keeps the 13-day uptrend line intact, and a break above 81.08 would pave the way for the 1.618 Fibonacci extension target at 81.40. Significant resistance lies at 81.48. Support at 80.60 has become pivotal for the short term, but only a sustained break below 80.48 would concern USD bulls.
AUD/USD
A decisive push below 1.0441 is underway, which exposes a support cluster between 1.0325 and 1.0250. Two 1.618 Fibonacci extension targets lie just above former range highs at 1.0250, where this bear wave is likely to find a significant long-term base. Regaining ground above 1.0539 is required to lift the tone.
FOREX FOCUS
The path of true love is never smooth, as the yen is about to find out. For many months, the Japanese currency has worked its charms, wheedling its way into the heart of the international investment community even as Japan itself suffered from a devastating earthquake and tsunami. Through all the ups and downs, the market's affection remained strong with investors preferring the yen against many other major currencies in times of global uncertainty. Signs are, however, that this is all falling apart even though the Japanese economy itself is staging a much more robust recovery from the earthquake than expected. The shift in affections is evident in the yen's performance against the Swiss franc, that other great safe haven love that investors tend to turn to. In recent months, the franc has risen steadily against the yen, showing that the Japanese currency is steadily losing its ranking in the safe haven stakes. It all appears to be part of a larger shift in affections as the market adjusts to the latest concerns about the global recovery and inflationary pressures. The timing for the yen might be ironic, given that new retail sales indicate that consumption has rebounded sharply and should soon return to pre-earthquake levels once supply constraints have eased. Industrial production figures and the latest Bank of Japan Tankan survey this week will also contribute to the view that the worst for the Japanese economy is over. However, this good news on the recovery isn't expected to translate into higher rate expectations, given the ongoing fiscal and political problems facing Japan. The currency strategy team at Commerzbank put it this way: "The yen cannot expect any support on the interest front, as the central bank cannot afford a vicious circle of rising interest rates leading to the increased probability of defaults and thus higher interest rates. As a result it will keep interest rates low and eventually that will have an effect on the yen."
EUROPE
Greece continued to hold currency markets in thrall in European trade Tuesday, as overnight buying interest in the euro faded, while the pound sagged as weak economic data rubbished the case for higher interest rates. With Greece on a 48-hour general strike, ahead of Wednesday's parliamentary vote on the strict budgetary measures upon which a crucial bailout depends, the single currency gave back some of its overnight gains as attention switched to the eleventh-hour struggle to stave off a Greek default. The euro was pretty much stuck in the $1.42s against the dollar while making some headway against the beleaguered pound for reasons more to do with the sombre outlook for the U.K. economy. The Swiss franc, the star turn of the past few weeks, continued to have another good outing. Over in Greece, embattled Prime Minister George Papandreou wants lawmakers to approve plans to cut spending by EUR28.6 billion by 2015. At the same time, Greek central bank governor Giorgos Provopoulos has waded into the debate, saying that taxpayers are at their limits. The battle lines are drawn but You-Na Park, strategist at Commerzbank, said she expects Papandreou to win through. "It will pass through. Doesn't look like there is any other way and that may spark a relief rally for the euro," she said, but added that any gains aren't likely to be big. After all the medium-term outlook for Greece won't be resolved and the amount of private sector participation is still undecided.
ASIA
The euro held steady against the dollar and the yen in Asia Tuesday as growing optimism that Greece will approve a package of austerity measures Wednesday prodded traders to refrain from making fresh bets. Earlier in the day, short covering that triggered stop-loss purchases above 1.4300 sent the single currency as high as $1.4330. But the gains were eroded later due to the absence of fresh news related to the Greek debt crisis. Positive news regarding Greece overnight and a rebound in the stock market are making it tough to sell the euro against the dollar," said Kuniyuki Hirai, manager at the foreign exchange trading department of Bank of Tokyo-Mitsubishi UFJ. European governments said Monday they want private creditors to roll over as much as EUR30 billion of Greek government bonds that come due by 2014. The proposal drafted by French banks and insurers calls for half of the proceeds from maturing Greek bonds to be reinvested in 30-year Greek bonds. Furthering the credibility of that plan, the European Central Bank said it is receptive to the French proposal on Greece, if it is voluntary. Traders in Tokyo said that with the situation turning for the better, all eyes are now on Wednesday's parliamentary vote on a EUR28 billion package of austerity measures in Greece.
WORLD
Investors' optimism about the prospect of a broad plan with European Union guarantees to roll over Greek debt that could involve private creditors and diminish the chance of default helped boost the euro Monday in New York. European governments have said they want private creditors to roll over as much as EUR30 billion worth of Greek government bonds that come due by 2014. The proposal drafted by French banks and insurers calls for half of the proceeds from maturing Greek bonds to be reinvested in 30-year Greek bonds. Furthering the credibility of that plan, the European Central Bank said it is receptive to the French proposal on Greece, if it is voluntary. Hopes that an austerity plan could pass in the Greek Parliament later this week also gave the currency support. "There is optimism on Greece" at the start of this new week, said Kathy Lien, director of currency research at GFT Forex in New York. There is a broad sense that most parties in the euro zone, and inside Greece itself, know what is at stake and won't let Greece fail. "Euro bears were covering today on optimism that [the likely passage of the austerity plan] is going to be positive for the euro," said Phil Streible, senior market strategist at Lind-Waldock in Chicago. The thinking now is that the euro could next head to $1.4300-$1.4325, he predicted. But the euro will then be susceptible as that good news wanes and more troubles present themselves, said Streible. To that end, "I was selling $1.48 August calls today and putting in orders for $1.40 September puts," for the euro, he said.
Senin, 27 Juni 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
The June 16 reaction low at 1.4073 is likely to face renewed pressure. EUR bear momentum is on the increase, and a break below 1.4073 is expected, exposing 1.4055 and 1.3989 initially. However, a push below 1.4073 would also create longer-term scope for 1.3850 and 1.3818 this week. Only a recovery above 1.4224 would question the bearish EUR outlook, which is protected by 1.4185.
GBP/USD
The downside target at 1.5901 is within striking distance, but there is more scope to the downside. GBP bears are targeting the downwave equality target at 1.5859 as a minimum objective, and concerted weakness would pave the way for 1.5752 and 1.5675. Regaining ground above 1.6044 would provide temporary respite, but corrective upside risk is limited.
USD/JPY
The focus is on the June 15 reaction high at 81.08, as USD bulls regain control of the short term. The probe above 80.80 keeps the twelve-day uptrend line intact, and a break above 81.08 would pave the way for the 1.618 Fibonacci extension target at 81.40. Significant resistance lies at 81.48. Support at 80.50 will look to cushion corrective weakness, and only below 80.29 would prompt a return to Friday's low at 80.13.
AUD/USD
A decisive push below 1.0441 is underway, which exposes a support cluster between 1.0325 and 1.0250. Two 1.618 Fibonacci extension targets lie just above former range highs at 1.0250, where this bear wave is likely to find a significant long-term base. Regaining ground above 1.0506 is required to provide respite, but only above 1.0603 would lift the tone.
FOREX FOCUS
Even euro speculators are starting to lose their nerve. For some time now, speculative positions in the single currency have remained fairly strong, suggesting that there was still some confidence in the euro project. However, new data from the International Monetary Market in Chicago shows that in the week to last Tuesday, there was a sharp run down in exposure to about 16% of open interest from as much as 40% in early 2011. Of course, there are still some brave souls hanging in there but they may well have fled since that survey nearly a week ago as market tensions over a Greek bail out continue to rise. The next test for euro supporters will be the vote this Wednesday by Greek parliamentarians on a 5-year austerity program. At the moment, the government is expected to secure a victory even though it has such a small 5-member majority that could be reduced even further by dissention. The terms of the package have attracted wide criticism, including claims by the country's own central bank governor that spending isn't being cut enough and tax evasion remains too high. This suggests that even if Prime Minister George Papandreou does win, popular backing for the measures will be weak and their implementation will become a problem. In the meantime, all the other problems will come to the fore. For a start, there is the negotiations over a restructuring of private sector bonds. French bank proposals to roll over as much as 70% of their holdings may have attracted some positive market comment over the weekend but it remains to be seen if the eventual roll over can be achieved without triggering a so-called 'credit event' call from the debt rating agencies. In other words, the rating agencies will call the roll over what it is--a default--and the subsequent downgrade of ratings will create further financial havoc. The importance of those ratings was evident late last week when Moody's pointed out just how vulnerable Italian banks are to a cut in Italy's debt rating. Bank shares plummeted, stories of deposit withdrawals abounded and Italy found that its yield spreads were being pushed to new record highs as investors demanded even more of a return. Later this week, euro supporters could also get a nasty reminder that economics isn't playing on their side either when the latest flash estimate for euro zone inflation is released Thursday.
EUROPE
The euro enjoyed a modest rebound in European morning trade Monday as hopes grew of a deal to rollover Greek government debt, ahead of a crucial Greek austerity vote, but investor confidence remains distinctly fragile. In Asian hours, heightened risk aversion boosted the dollar across the board and pushed the European currency to a fresh all-time low against the Swiss franc of CHF1.1808. Insuring European sovereign debt against default also became more expensive, with the iTraxx SovX Western Europe credit default swaps index hitting a new record high and Italy pulling off a successful two-year bond auction, but at a higher cost. Currency traders nonetheless welcomed weekend news that French banks have proposed a plan to reinvest half of the proceeds from maturing Greek government bonds into buying 30-year bonds issued by the embattled country. The German Finance Ministry later said private sector suggestions were welcomed. The positive attitude to private sector participation in a Greek credit event, a particularly thorny issue that has slowed down progress toward a new bailout package for Greece, helped lift the single currency to a session high against the dollar of $1.4219, despite lingering skepticism. "The market is taking comfort from the news coming from banks, but risk indicators are still giving out negative signals and we would view any rebound in the euro as a selling opportunity," said Ian Stannard, a currency strategist at Morgan Stanley in London. A pivotal factor just around the corner is Greece's budget vote, scheduled for Wednesday morning. While a positive outcome would support the currency in the short-term, currency analysts cautioned that the debt saga remains far from resolved. "Even if the Greek vote passes, we'll probably only get three months of stability followed by renewed problems as it becomes clear that the country is failing to meet its commitments," said Geoffrey Yu, director of FX strategy, at UBS AG in London.
ASIA
The dollar broadly strengthened against major currencies in Asia on Monday as jitters over this week's parliamentary votes in Greece on a EUR28 billion package of austerity measures heightened traders' risk aversion, prompting them to buy the greenback. Falling stock and commodity prices, coupled with global growth concerns, also added to uncertainty in the currency market, leading traders to trim their holdings of riskier currencies such as the euro, the U.K. pound, and the Australian dollar. The greenback also gained against its safe-haven rivals such as the yen and the Swiss franc. "It was rare to" see such a big move during Asian trading hours on Monday, said Makoto Noji, senior currency strategist at SMBC Nikko Securities. Uncertainty over this week's Greek votes and falls in global share prices "prompted short-covering for the dollar, while the euro is besieged by various negative factors," he added. At 0500 GMT, the euro was at $1.4123 from $1.4192 late Friday in New York, according to figures from EBS. It earlier tumbled to as low as $1.4102. The U.K. pound stood at $1.5922, after falling to a near five-month low of $1.5913, from $1.5967. The dollar was at CHF0.8374 from CHF0.8328. "A risk-averse mood has extended from last week, with an eye on falling stock and commodity prices and Greece's debt problems," said Yoshio Yoshida, a trader at Mizuho Trust and Banking Co. "Those factors have worked in favor of dollar buying, although trading could be a wild ride this week," he added.
WORLD
Euro-zone debt worries reached Italy on Friday as contagion fears pushed the euro to an all-time low against the Swiss franc. The common currency fell as low as CHF1.1844 against the safe-haven franc over fears the Greek sovereign crisis was gaining a greater foothold outside the country's borders and in the region's banking system. Trading in Italian bank shares was suspended due to high volatility in Milan after ratings agency Moody's Investors Service said it was considering downgrading the creditworthiness of a group of the country's banks. Italy's sovereign 10-year yield spread over German bunds reacted by climbing to 213 basis points--the widest since the birth of the euro in January 1999. "There are concerns over contagion since Italy's economy is very weak and also over the lack of transparency in the banking sector," Peter Rosenstreich, associate director and chief market analyst with Switzerland's Swissquote Bank SA, said. "Without a total and credible solution to the Greek and [European Union] sovereign debt crisis, all EU nations are susceptible to sudden exodus of confidence and capital."
The June 16 reaction low at 1.4073 is likely to face renewed pressure. EUR bear momentum is on the increase, and a break below 1.4073 is expected, exposing 1.4055 and 1.3989 initially. However, a push below 1.4073 would also create longer-term scope for 1.3850 and 1.3818 this week. Only a recovery above 1.4224 would question the bearish EUR outlook, which is protected by 1.4185.
GBP/USD
The downside target at 1.5901 is within striking distance, but there is more scope to the downside. GBP bears are targeting the downwave equality target at 1.5859 as a minimum objective, and concerted weakness would pave the way for 1.5752 and 1.5675. Regaining ground above 1.6044 would provide temporary respite, but corrective upside risk is limited.
USD/JPY
The focus is on the June 15 reaction high at 81.08, as USD bulls regain control of the short term. The probe above 80.80 keeps the twelve-day uptrend line intact, and a break above 81.08 would pave the way for the 1.618 Fibonacci extension target at 81.40. Significant resistance lies at 81.48. Support at 80.50 will look to cushion corrective weakness, and only below 80.29 would prompt a return to Friday's low at 80.13.
AUD/USD
A decisive push below 1.0441 is underway, which exposes a support cluster between 1.0325 and 1.0250. Two 1.618 Fibonacci extension targets lie just above former range highs at 1.0250, where this bear wave is likely to find a significant long-term base. Regaining ground above 1.0506 is required to provide respite, but only above 1.0603 would lift the tone.
FOREX FOCUS
Even euro speculators are starting to lose their nerve. For some time now, speculative positions in the single currency have remained fairly strong, suggesting that there was still some confidence in the euro project. However, new data from the International Monetary Market in Chicago shows that in the week to last Tuesday, there was a sharp run down in exposure to about 16% of open interest from as much as 40% in early 2011. Of course, there are still some brave souls hanging in there but they may well have fled since that survey nearly a week ago as market tensions over a Greek bail out continue to rise. The next test for euro supporters will be the vote this Wednesday by Greek parliamentarians on a 5-year austerity program. At the moment, the government is expected to secure a victory even though it has such a small 5-member majority that could be reduced even further by dissention. The terms of the package have attracted wide criticism, including claims by the country's own central bank governor that spending isn't being cut enough and tax evasion remains too high. This suggests that even if Prime Minister George Papandreou does win, popular backing for the measures will be weak and their implementation will become a problem. In the meantime, all the other problems will come to the fore. For a start, there is the negotiations over a restructuring of private sector bonds. French bank proposals to roll over as much as 70% of their holdings may have attracted some positive market comment over the weekend but it remains to be seen if the eventual roll over can be achieved without triggering a so-called 'credit event' call from the debt rating agencies. In other words, the rating agencies will call the roll over what it is--a default--and the subsequent downgrade of ratings will create further financial havoc. The importance of those ratings was evident late last week when Moody's pointed out just how vulnerable Italian banks are to a cut in Italy's debt rating. Bank shares plummeted, stories of deposit withdrawals abounded and Italy found that its yield spreads were being pushed to new record highs as investors demanded even more of a return. Later this week, euro supporters could also get a nasty reminder that economics isn't playing on their side either when the latest flash estimate for euro zone inflation is released Thursday.
EUROPE
The euro enjoyed a modest rebound in European morning trade Monday as hopes grew of a deal to rollover Greek government debt, ahead of a crucial Greek austerity vote, but investor confidence remains distinctly fragile. In Asian hours, heightened risk aversion boosted the dollar across the board and pushed the European currency to a fresh all-time low against the Swiss franc of CHF1.1808. Insuring European sovereign debt against default also became more expensive, with the iTraxx SovX Western Europe credit default swaps index hitting a new record high and Italy pulling off a successful two-year bond auction, but at a higher cost. Currency traders nonetheless welcomed weekend news that French banks have proposed a plan to reinvest half of the proceeds from maturing Greek government bonds into buying 30-year bonds issued by the embattled country. The German Finance Ministry later said private sector suggestions were welcomed. The positive attitude to private sector participation in a Greek credit event, a particularly thorny issue that has slowed down progress toward a new bailout package for Greece, helped lift the single currency to a session high against the dollar of $1.4219, despite lingering skepticism. "The market is taking comfort from the news coming from banks, but risk indicators are still giving out negative signals and we would view any rebound in the euro as a selling opportunity," said Ian Stannard, a currency strategist at Morgan Stanley in London. A pivotal factor just around the corner is Greece's budget vote, scheduled for Wednesday morning. While a positive outcome would support the currency in the short-term, currency analysts cautioned that the debt saga remains far from resolved. "Even if the Greek vote passes, we'll probably only get three months of stability followed by renewed problems as it becomes clear that the country is failing to meet its commitments," said Geoffrey Yu, director of FX strategy, at UBS AG in London.
ASIA
The dollar broadly strengthened against major currencies in Asia on Monday as jitters over this week's parliamentary votes in Greece on a EUR28 billion package of austerity measures heightened traders' risk aversion, prompting them to buy the greenback. Falling stock and commodity prices, coupled with global growth concerns, also added to uncertainty in the currency market, leading traders to trim their holdings of riskier currencies such as the euro, the U.K. pound, and the Australian dollar. The greenback also gained against its safe-haven rivals such as the yen and the Swiss franc. "It was rare to" see such a big move during Asian trading hours on Monday, said Makoto Noji, senior currency strategist at SMBC Nikko Securities. Uncertainty over this week's Greek votes and falls in global share prices "prompted short-covering for the dollar, while the euro is besieged by various negative factors," he added. At 0500 GMT, the euro was at $1.4123 from $1.4192 late Friday in New York, according to figures from EBS. It earlier tumbled to as low as $1.4102. The U.K. pound stood at $1.5922, after falling to a near five-month low of $1.5913, from $1.5967. The dollar was at CHF0.8374 from CHF0.8328. "A risk-averse mood has extended from last week, with an eye on falling stock and commodity prices and Greece's debt problems," said Yoshio Yoshida, a trader at Mizuho Trust and Banking Co. "Those factors have worked in favor of dollar buying, although trading could be a wild ride this week," he added.
WORLD
Euro-zone debt worries reached Italy on Friday as contagion fears pushed the euro to an all-time low against the Swiss franc. The common currency fell as low as CHF1.1844 against the safe-haven franc over fears the Greek sovereign crisis was gaining a greater foothold outside the country's borders and in the region's banking system. Trading in Italian bank shares was suspended due to high volatility in Milan after ratings agency Moody's Investors Service said it was considering downgrading the creditworthiness of a group of the country's banks. Italy's sovereign 10-year yield spread over German bunds reacted by climbing to 213 basis points--the widest since the birth of the euro in January 1999. "There are concerns over contagion since Italy's economy is very weak and also over the lack of transparency in the banking sector," Peter Rosenstreich, associate director and chief market analyst with Switzerland's Swissquote Bank SA, said. "Without a total and credible solution to the Greek and [European Union] sovereign debt crisis, all EU nations are susceptible to sudden exodus of confidence and capital."
Jumat, 24 Juni 2011
FXPRO INTRADAY SNAPSHOT
EUR/USD
The corrective recovery off 1.4125 is tackling resistance at 1.4285. However, with layers of resistance looming at 1.4330 and 1.4360, scope for corrective gains are limited. Wednesday's bull failure high at 1.4442 continues to dominate the daily chart and Thursday's low at 1.4125 remains vulnerable, which will become the focus on a break below 1.4195.
GBP/USD
Corrects higher off 1.5939, but with upside risk limited to 1.6122, the main threat remains to the downside. Renewed GBP bear pressure is expected on 1.5939, and there is scope for an extension lower towards targets at 1.5901 and 1.5859. Resistance at 1.6066 and 1.6100 protect the 1.6122 barrier.
USD/JPY
Thursday's cap at 80.80 keeps the action within a short-term bear pennant continuation pattern. Bear pressure is building on support at 80.34, and a push below there would bring Wednesday's 80.01 low back into the picture. Loss of 80.34 would also leave the 80.80 high as a near-term bull failure. Regaining ground above 80.64 is required to suggest a return to the 80.80 high is on the cards, protecting the important June 15 reaction high at 81.08.
AUD/USD
Stages a recovery off 1.0455, and a push above resistance at 1.0552 is expected. The pace of the three-week downtrend is slowing, and a break above 1.0552 would open the important 1.0630/51 projected resistance area. However, AUD bulls need to force a break through 1.0651 in order to gain control. A push below 1.0478 is required to re-expose the 1.0455 low, threatening a downtrend extension to 1.0441 and towards 1.0325.
FOREX FOCUS
Inflation is concentrating minds from Washington to Beijing. But that doesn't mean global risk sentiment will improve. On the contrary, recent comments from China, as well as the International Energy Agency's highly unusual decision to release crude oil stocks, both smack of a certain amount of desperation. Let's look at China first. Premier Wen Jiabao's claim that inflation has been vanquished will certainly come as a surprise to all those who, both inside and outside the country, have been looking for tighter monetary policy as well as further gains in the yuan itself. However, Wen's comments may reflect a greater reality about the state of the Chinese economy and the rapidly growing fears that the housing market is about to implode. Up until now, fighting inflation may have been the primary priority, especially given the damage that higher prices pose to the government's popularity. But, if recent economic data, including the latest manufacturing activity numbers this week, continue to point to a slowdown, Beijing's priorities might be changing. By claiming an inflation victory, Wen will reduce expectations of tighter policy and take some of the pressure off the housing market. This could make the headline of a well-timed piece of research by Societe Generale: "Chinese Construction Bubble: Preparing For A Potential Burst", look even more prescient. For financial markets, it is the coincidence of Wen's remarks with the IEA's announcement that have proved particularly unsettling. Although the prospects for the U.S. as well as the global economy are not looking as good as they once were, there is a growing fear that the recent rise in energy prices has gone too far and that inflation has become too entrenched.
EUROPE
The dollar rallied against other currencies in late Friday-morning trade in Europe on Italian bank credit concerns, reversing earlier losses after robust German business confidence gave investors renewed hope that a slowdown in the global economy would pass after weak data this week. The abrupt reversal in currency trader sentiment came after trading in leading Italian bank stocks was suspended after these fell sharply. The development followed a warning from Moody's Investors Service late Thursday that it may cut the credit ratings of 16 Italian banks. It also added to wider euro-zone debt concerns in the wake of 11th-hour efforts to stave off a default in Greece, even as hopes grew that the euro zone would muddle through following overnight news that Greece had reached an agreement with the International Monetary Fund and the European Union on a five-year austerity program. "There are still substantial uncertainties because the new Greek packages come with additional conditionality, including another EUR5 billion in extra fiscal cuts which will be difficult to get through parliament," said Hans Redeker, head of global currency strategy at Morgan Stanley.
ASIA
The euro rose against the dollar in Asia Friday as multinational efforts to tame crude prices and inflationary pressure prompted investors to think that central banks may refrain from policy tightening for now. The International Energy Agency said Thursday its 28 members including the U.S. have agreed to release 60 million barrels of oil from strategic reserves to boost supplies ahead of the peak summer driving season. As a result of Libyan conflict earlier this year, crude output has declined and pushed up oil prices. That added to already-high inflationary pressure in emerging countries such as China and Brazil, making investors speculate that authorities may tighten monetary policy at a faster pace to curb prices even at the expense of cooler share markets. The IEA announcement instantly sent oil prices down to a four-month low and eased the speculation, contributing to gains in Asian share markets. Japan's Nikkei Stock Average was up 0.8% and China's Shanghai Composite Index was 1.8% higher as of 0450 GMT. The euro often becomes strong when share markets are upbeat due to a high yields that euro-denominated assets have. That was indeed the case in Asia. "We may see the euro briefly touching $1.43," said Hideki Amikura, a senior dealer at Nomura Trust and Banking. Still, Amikura and other Tokyo dealers say the euro's upside potential is limited because Greece's debt problems are not over yet and a slowdown in the European economy has been seen recently.
WORLD
The euro had been beaten down so much by global growth and Greece debt concerns Thursday in New York that news of a widely expected accord helped significantly pare its losses. Greece's agreement with the International Monetary Fund and the European Union on a five-year austerity program isn't a long-term solution to Greece's credit woes. The program also still has to survive in Greece's parliament. The austerity agreement was necessary so that Greece's parliament would have something to vote on. But the news was enough to lift the euro to $1.4264 from an intraday low of $1.4125. "It's a (factor) of how jumpy the market is. In order to vote on an austerity package, you have to have" an actual austerity proposal, said David Watt, senior currency strategist at RBC Capital Markets in Toronto. "Anything that might look like a bit of news, the market will react to it. The market is skittish and that doesn't always help." That said, support for an austerity plan is vital to a second bailout package for the laid-low country, and is integral to euro-zone officials' desire to avoid a complicated and messy debt restructuring. But this doesn't mean the problems are over for the once high-flying euro, said analysts, especially if global growth shows continued signs of slowing
The corrective recovery off 1.4125 is tackling resistance at 1.4285. However, with layers of resistance looming at 1.4330 and 1.4360, scope for corrective gains are limited. Wednesday's bull failure high at 1.4442 continues to dominate the daily chart and Thursday's low at 1.4125 remains vulnerable, which will become the focus on a break below 1.4195.
GBP/USD
Corrects higher off 1.5939, but with upside risk limited to 1.6122, the main threat remains to the downside. Renewed GBP bear pressure is expected on 1.5939, and there is scope for an extension lower towards targets at 1.5901 and 1.5859. Resistance at 1.6066 and 1.6100 protect the 1.6122 barrier.
USD/JPY
Thursday's cap at 80.80 keeps the action within a short-term bear pennant continuation pattern. Bear pressure is building on support at 80.34, and a push below there would bring Wednesday's 80.01 low back into the picture. Loss of 80.34 would also leave the 80.80 high as a near-term bull failure. Regaining ground above 80.64 is required to suggest a return to the 80.80 high is on the cards, protecting the important June 15 reaction high at 81.08.
AUD/USD
Stages a recovery off 1.0455, and a push above resistance at 1.0552 is expected. The pace of the three-week downtrend is slowing, and a break above 1.0552 would open the important 1.0630/51 projected resistance area. However, AUD bulls need to force a break through 1.0651 in order to gain control. A push below 1.0478 is required to re-expose the 1.0455 low, threatening a downtrend extension to 1.0441 and towards 1.0325.
FOREX FOCUS
Inflation is concentrating minds from Washington to Beijing. But that doesn't mean global risk sentiment will improve. On the contrary, recent comments from China, as well as the International Energy Agency's highly unusual decision to release crude oil stocks, both smack of a certain amount of desperation. Let's look at China first. Premier Wen Jiabao's claim that inflation has been vanquished will certainly come as a surprise to all those who, both inside and outside the country, have been looking for tighter monetary policy as well as further gains in the yuan itself. However, Wen's comments may reflect a greater reality about the state of the Chinese economy and the rapidly growing fears that the housing market is about to implode. Up until now, fighting inflation may have been the primary priority, especially given the damage that higher prices pose to the government's popularity. But, if recent economic data, including the latest manufacturing activity numbers this week, continue to point to a slowdown, Beijing's priorities might be changing. By claiming an inflation victory, Wen will reduce expectations of tighter policy and take some of the pressure off the housing market. This could make the headline of a well-timed piece of research by Societe Generale: "Chinese Construction Bubble: Preparing For A Potential Burst", look even more prescient. For financial markets, it is the coincidence of Wen's remarks with the IEA's announcement that have proved particularly unsettling. Although the prospects for the U.S. as well as the global economy are not looking as good as they once were, there is a growing fear that the recent rise in energy prices has gone too far and that inflation has become too entrenched.
EUROPE
The dollar rallied against other currencies in late Friday-morning trade in Europe on Italian bank credit concerns, reversing earlier losses after robust German business confidence gave investors renewed hope that a slowdown in the global economy would pass after weak data this week. The abrupt reversal in currency trader sentiment came after trading in leading Italian bank stocks was suspended after these fell sharply. The development followed a warning from Moody's Investors Service late Thursday that it may cut the credit ratings of 16 Italian banks. It also added to wider euro-zone debt concerns in the wake of 11th-hour efforts to stave off a default in Greece, even as hopes grew that the euro zone would muddle through following overnight news that Greece had reached an agreement with the International Monetary Fund and the European Union on a five-year austerity program. "There are still substantial uncertainties because the new Greek packages come with additional conditionality, including another EUR5 billion in extra fiscal cuts which will be difficult to get through parliament," said Hans Redeker, head of global currency strategy at Morgan Stanley.
ASIA
The euro rose against the dollar in Asia Friday as multinational efforts to tame crude prices and inflationary pressure prompted investors to think that central banks may refrain from policy tightening for now. The International Energy Agency said Thursday its 28 members including the U.S. have agreed to release 60 million barrels of oil from strategic reserves to boost supplies ahead of the peak summer driving season. As a result of Libyan conflict earlier this year, crude output has declined and pushed up oil prices. That added to already-high inflationary pressure in emerging countries such as China and Brazil, making investors speculate that authorities may tighten monetary policy at a faster pace to curb prices even at the expense of cooler share markets. The IEA announcement instantly sent oil prices down to a four-month low and eased the speculation, contributing to gains in Asian share markets. Japan's Nikkei Stock Average was up 0.8% and China's Shanghai Composite Index was 1.8% higher as of 0450 GMT. The euro often becomes strong when share markets are upbeat due to a high yields that euro-denominated assets have. That was indeed the case in Asia. "We may see the euro briefly touching $1.43," said Hideki Amikura, a senior dealer at Nomura Trust and Banking. Still, Amikura and other Tokyo dealers say the euro's upside potential is limited because Greece's debt problems are not over yet and a slowdown in the European economy has been seen recently.
WORLD
The euro had been beaten down so much by global growth and Greece debt concerns Thursday in New York that news of a widely expected accord helped significantly pare its losses. Greece's agreement with the International Monetary Fund and the European Union on a five-year austerity program isn't a long-term solution to Greece's credit woes. The program also still has to survive in Greece's parliament. The austerity agreement was necessary so that Greece's parliament would have something to vote on. But the news was enough to lift the euro to $1.4264 from an intraday low of $1.4125. "It's a (factor) of how jumpy the market is. In order to vote on an austerity package, you have to have" an actual austerity proposal, said David Watt, senior currency strategist at RBC Capital Markets in Toronto. "Anything that might look like a bit of news, the market will react to it. The market is skittish and that doesn't always help." That said, support for an austerity plan is vital to a second bailout package for the laid-low country, and is integral to euro-zone officials' desire to avoid a complicated and messy debt restructuring. But this doesn't mean the problems are over for the once high-flying euro, said analysts, especially if global growth shows continued signs of slowing
Kamis, 23 Juni 2011
FXPRO INTRADAY SNAPSHOT
EUR/USD
The setback off 1.4442 is significant, and likely to extend down to 1.4191. The 1.4442 high has already become a potential near-term bull failure, and a push below 1.4283 would pave the way for more weakness to the intraday lower high at 1.4191. Confirmation of a bull failure will have to wait until the 1.4191 low is broken. There is scope for a recovery to the 1.4365/50 area, but only above 1.4405 would suggest a return to 1.4442 is possible.
GBP/USD
The 1.6000 level is under threat for the first time since April, following Wednesday's wide-ranging bearish outside day. A break below support at 1.5997 is expected to expose the Mar. 28 higher low at 1.5937, and meeting downside targets at 1.5901 and 1.5859 is the immediate threat. Corrective gains are limited to 1.6201, which is protected by 1.6150.
USD/JPY
The setback off Thursday's Asian session high at 80.65 will look to establish a new range floor above 80.33. Wednesday's late strength keeps the psychologically-important 80.00 level intact, and while support at 80.33 holds, the range high at 80.65 will come under fresh USD bull pressure. The important June 15 high at 81.08 lies above 80.65.
AUD/USD
Resistance at 1.0653 has put the June 16 low at 1.0478 back under threat. The short-term downtrend is still intact, if somewhat indecisive, and a push below 1.0513 would expose 1.0478 and the May 25 reaction low at 1.0441. A recovery above 1.0625 is required to question the bearish AUD outlook, opening 1.0653.
FOREX FOCUS
Counting on a dollar rally just now could be expensive. Yes, a recovery in the U.S. currency is more than likely underway. But, with the U.S. Federal Reserve downgrading its forecast for the U.S. economy and with the risks of a U.S. default remaining high, few investors will want to start placing bets just yet. The immediate concerns over the dollar stem from the FOMC meeting this week and Fed Chairman Ben Bernanke's confirmation that U.S. growth is going through a "soft patch." As he had hinted previously, Bernanke suggested that market liquidity would be preserved but, with inflation pressures on the rise, the central bank has no intention of replacing its QE2 measures with a QE3 when they run out at the end of June. The dollar may have taken a little comfort from this but U.S. Treasury yields suggest that there is little market expectation for an early move to tighten monetary policy. Yields on 10-year Treasurys, which traded up at 3.01% right after the FOMC meeting and Bernanke's press conference, have since fallen back to about 2.96%, nearly as low as the 2.95% level seen just before the meeting started. Some market watchers have suggested that the dollar's post-FOMC bounce may well have had more to do with position-covering rather than any new lease of dollar support. This isn't surprising, not only because the dollar will remain of limited attraction with yields remaining under 3% but because Congressional wrangling over a new U.S. debt ceiling still leaves the country open to default. If a solution isn't reached by August 2, when 'extraordinary measures' for funding the U.S. deficit run out, the U.S. Treasury will essentially have no more money and the U.S. government won't have the authority to raise any more either.
EUROPE
A steady stream of bad news slammed the euro, and other currencies seen as risky bets in European trading hours. The dollar, yen and Swiss franc were among the chief beneficiaries in European currency trading Thursday as weak data in China and Europe added to nagging economic fears, hopes for further U.S. credit easing were dashed, and the unresolved Greek debt crisis rumbled on. "There are negative signals coming from all regions. Everywhere you turn, there's negative news," said Ian Stannard, a currencies analyst at Morgan Stanley in London. The pound hit record lows against the Swiss franc and New Zealand dollar, and fell below $1.60 against the dollar for the first time in almost three months as traders continued to put back their expectations for a U.K. interest rate rise. Meanwhile, the euro slipped below $1.425 against the buck due to concerns related to Greek efforts to tweak key austerity measures ahead of an all-important parliamentary vote next week. Although Federal Reserve Chairman Ben Bernanke late Wednesday did not completely rule out further bond purchases once the current round ends later this month, he indicated it was unlikely, spurring overnight demand for the buck that continued during the European morning session.
ASIA
The dollar slightly strengthened against major currencies in Asia Thursday as short-covering continued to kick in after U.S. Federal Reserve Chairman Ben Bernanke on Wednesday quashed speculation of any further credit easing. The greenback got a boost as traders who had gone short were forced to unwind their positions due to the dollar's upward momentum from the start of the session. But the dollar's rally fizzled out by midday after the completion of short-covering amid a lack of follow-through buyers. Some market participants had speculated that the Fed might signal a further credit easing since the U.S. economy has been faltering," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Bank. "But the fact is it didn't. And the outcome induced short-covering," she added. While Bernanke didn't entirely rule out another round of bond purchases, he made it pretty clear such a move is unlikely. Bernanke also said there is no longer a risk of deflation. "Low risks of deflation effectively rule out further aggressive monetary stimulus," said David Rodriguez, quantitative strategist at DailyFX Research Desk, adding that "the dollar may continue to recover as the Fed wraps up its controversial purchases of U.S. government debt at the end of June."
WORLD
Federal Reserve Chairman Ben Bernanke Wednesday quashed speculation about another round of stimulative bond purchases, boosting the dollar. Speaking after the Federal Open Market Committee's policy statement was released, Bernanke did not say outright that further easing would never occur, but he made it pretty clear that such a move is highly unlikely. The current Treasurys purchase program -- known as QE2 and winding down at the end of this month -- sought to stimulate the U.S. economy by flooding the markets with dollars, a move that also diluted the dollar's value. The market took Bernanke's comments as a sign of "deep reluctance to go down the road of QE3," said Paresh Upadhyaya, director of G10 FX Strategy at Bank of America-Merrill Lynch in New York. Such a signal was dollar positive, Upadhyaya added. The euro gave up modest gains and the dollar strengthened to its session high against the yen during the news conference, the second such occasion Bernanke has taken questions from the media following a Fed policy meeting. The dollar had been trading in a narrow range against the euro heading into the news conference as the Fed's statement released before Bernanke spoke was little changed from its last statement. The Fed continues to expect economic growth will pick up later in the year, but that the Fed funds rate will remain at current historic lows indefinitely.
The setback off 1.4442 is significant, and likely to extend down to 1.4191. The 1.4442 high has already become a potential near-term bull failure, and a push below 1.4283 would pave the way for more weakness to the intraday lower high at 1.4191. Confirmation of a bull failure will have to wait until the 1.4191 low is broken. There is scope for a recovery to the 1.4365/50 area, but only above 1.4405 would suggest a return to 1.4442 is possible.
GBP/USD
The 1.6000 level is under threat for the first time since April, following Wednesday's wide-ranging bearish outside day. A break below support at 1.5997 is expected to expose the Mar. 28 higher low at 1.5937, and meeting downside targets at 1.5901 and 1.5859 is the immediate threat. Corrective gains are limited to 1.6201, which is protected by 1.6150.
USD/JPY
The setback off Thursday's Asian session high at 80.65 will look to establish a new range floor above 80.33. Wednesday's late strength keeps the psychologically-important 80.00 level intact, and while support at 80.33 holds, the range high at 80.65 will come under fresh USD bull pressure. The important June 15 high at 81.08 lies above 80.65.
AUD/USD
Resistance at 1.0653 has put the June 16 low at 1.0478 back under threat. The short-term downtrend is still intact, if somewhat indecisive, and a push below 1.0513 would expose 1.0478 and the May 25 reaction low at 1.0441. A recovery above 1.0625 is required to question the bearish AUD outlook, opening 1.0653.
FOREX FOCUS
Counting on a dollar rally just now could be expensive. Yes, a recovery in the U.S. currency is more than likely underway. But, with the U.S. Federal Reserve downgrading its forecast for the U.S. economy and with the risks of a U.S. default remaining high, few investors will want to start placing bets just yet. The immediate concerns over the dollar stem from the FOMC meeting this week and Fed Chairman Ben Bernanke's confirmation that U.S. growth is going through a "soft patch." As he had hinted previously, Bernanke suggested that market liquidity would be preserved but, with inflation pressures on the rise, the central bank has no intention of replacing its QE2 measures with a QE3 when they run out at the end of June. The dollar may have taken a little comfort from this but U.S. Treasury yields suggest that there is little market expectation for an early move to tighten monetary policy. Yields on 10-year Treasurys, which traded up at 3.01% right after the FOMC meeting and Bernanke's press conference, have since fallen back to about 2.96%, nearly as low as the 2.95% level seen just before the meeting started. Some market watchers have suggested that the dollar's post-FOMC bounce may well have had more to do with position-covering rather than any new lease of dollar support. This isn't surprising, not only because the dollar will remain of limited attraction with yields remaining under 3% but because Congressional wrangling over a new U.S. debt ceiling still leaves the country open to default. If a solution isn't reached by August 2, when 'extraordinary measures' for funding the U.S. deficit run out, the U.S. Treasury will essentially have no more money and the U.S. government won't have the authority to raise any more either.
EUROPE
A steady stream of bad news slammed the euro, and other currencies seen as risky bets in European trading hours. The dollar, yen and Swiss franc were among the chief beneficiaries in European currency trading Thursday as weak data in China and Europe added to nagging economic fears, hopes for further U.S. credit easing were dashed, and the unresolved Greek debt crisis rumbled on. "There are negative signals coming from all regions. Everywhere you turn, there's negative news," said Ian Stannard, a currencies analyst at Morgan Stanley in London. The pound hit record lows against the Swiss franc and New Zealand dollar, and fell below $1.60 against the dollar for the first time in almost three months as traders continued to put back their expectations for a U.K. interest rate rise. Meanwhile, the euro slipped below $1.425 against the buck due to concerns related to Greek efforts to tweak key austerity measures ahead of an all-important parliamentary vote next week. Although Federal Reserve Chairman Ben Bernanke late Wednesday did not completely rule out further bond purchases once the current round ends later this month, he indicated it was unlikely, spurring overnight demand for the buck that continued during the European morning session.
ASIA
The dollar slightly strengthened against major currencies in Asia Thursday as short-covering continued to kick in after U.S. Federal Reserve Chairman Ben Bernanke on Wednesday quashed speculation of any further credit easing. The greenback got a boost as traders who had gone short were forced to unwind their positions due to the dollar's upward momentum from the start of the session. But the dollar's rally fizzled out by midday after the completion of short-covering amid a lack of follow-through buyers. Some market participants had speculated that the Fed might signal a further credit easing since the U.S. economy has been faltering," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Bank. "But the fact is it didn't. And the outcome induced short-covering," she added. While Bernanke didn't entirely rule out another round of bond purchases, he made it pretty clear such a move is unlikely. Bernanke also said there is no longer a risk of deflation. "Low risks of deflation effectively rule out further aggressive monetary stimulus," said David Rodriguez, quantitative strategist at DailyFX Research Desk, adding that "the dollar may continue to recover as the Fed wraps up its controversial purchases of U.S. government debt at the end of June."
WORLD
Federal Reserve Chairman Ben Bernanke Wednesday quashed speculation about another round of stimulative bond purchases, boosting the dollar. Speaking after the Federal Open Market Committee's policy statement was released, Bernanke did not say outright that further easing would never occur, but he made it pretty clear that such a move is highly unlikely. The current Treasurys purchase program -- known as QE2 and winding down at the end of this month -- sought to stimulate the U.S. economy by flooding the markets with dollars, a move that also diluted the dollar's value. The market took Bernanke's comments as a sign of "deep reluctance to go down the road of QE3," said Paresh Upadhyaya, director of G10 FX Strategy at Bank of America-Merrill Lynch in New York. Such a signal was dollar positive, Upadhyaya added. The euro gave up modest gains and the dollar strengthened to its session high against the yen during the news conference, the second such occasion Bernanke has taken questions from the media following a Fed policy meeting. The dollar had been trading in a narrow range against the euro heading into the news conference as the Fed's statement released before Bernanke spoke was little changed from its last statement. The Fed continues to expect economic growth will pick up later in the year, but that the Fed funds rate will remain at current historic lows indefinitely.
Rabu, 22 Juni 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
Weakness towards 1.4287 is the immediate threat, following the setback off Wednesday's Asian session high at 1.4435. However, while projected support at 1.4287 holds, the short-term recovery off 1.4073 remains on track for the 1.4457 target. EUR bulls need to meet the 1.4457 target in order to validate the recovery off 1.4073. Loss of 1.4287 would undermine the positive EUR outlook, exposing Monday's low at 1.4191.
GBP/USD
Consolidates within a relatively tight 1.6167/1.6254 range, as the recovery off 1.6079 pauses for breath. At this stage, an upside resolution is the more likely, opening 1.6301 and threatening more gains to 1.6340 and 1.6440. A sustained break below 1.6167 would put GBP bears in control of the near-term, exposing Monday's low at 1.6109.
USD/JPY
Action has become rangebound between 80.01 and Monday's high at 80.37. However, last week's bear hammer candle puts USD bears in control, and while significant backup resistance lies at 80.48, the main threat is for a return to the lower end of the range. A downside resolution below 80.01 is be favored at this stage, exposing the June 8 reaction low at 79.69, and enhancing the longer-term threat for weakness to the 78.54 area. A recovery above 80.37 would provide temporary respite, but only a sustained break above short-term pivotal resistance at 80.48 would lift the tone, opening 80.67.
AUD/USD
Resistance at 1.0621 is expected to face renewed pressure, as the recovery off 1.0478 has room to extend. A push above 1.0621 would strengthen the 1.0478 low, and prompt further gains to the June 14 high at 1.0717. Only a reversal below 1.0532 would put AUD bears in control, exposing the 1.0478 low.
Forex Focus
Sterling hawks should be a dead, not a dying, breed. It is amazing how long the hawks have lasted as the U.K. has gone through the worst recession in decades and the global economy has continued to suffer convulsions from the global financial crisis. Even now, there are still two hawks on the Bank of England's monetary policy committee voting for higher interest rates. But, like those investors who have been buying the pound on a yield basis, these members are now looking very isolated as U.K. economic growth proves even more feeble than anticipated and U.K. price pressures have shown little sign of taking root. If anything, more evidence of this feeble recovery is likely to come. A pick-up in growth still looks many months away and the recent reversal in commodity prices will continue to extract some of the inflationary pressures many hawks had been worried about. The latest Bank of England minutes went a long way to argue just this point, noting that even the hawks recognized that "the growth outlook during the month had been weak." But, it is the issue of inflation that has really been dividing the hawks from the doves, with the former arguing that with the current 4.5% inflation expected to rise to 5% in the next month or two, price pressures will become entrenched. In other words, the central bank will have fallen behind the policy curve and the country would be left with the damaging legacy of long-term inflation. However, the minutes make it clear that there is little evidence of this. Inflation is not translating into higher wages and as commodity prices subside, the whole price pressure problem should prove transitory. If anything, the bank now suggests that the inflation rate will fall back under the 2% target and stay there. But, even more galling for hawks, has been the talk of more quantitative easing.
Europe
The euro got a fleeting lift Wednesday after embattled Greek prime minister George Papandreou's new cabinet got the required nod, with traders already looking to the next stumbling block in the still-unfolding Greek story while a downbeat pronouncement on the U.K. economy dented sterling. Greek members of parliament must pass stringent measures worth some EUR28 billion before Greece gets a EUR12 billion lifeline from the European Union. Approval must come by June 30 so that Greece is ready for the Eurogroup meeting scheduled for July 3. Much can happen by then. The confidence vote went along party lines as members of Papandreou's Panhellenic Socialist Movement (Pasok) were eager to stave off early elections but they may not be as quick to say 'yes' to the raft of tough measures given widespread public protests in Greece. The euro rose to as high as $1.4435 against the dollar after the parliamentary vote Tuesday, a one-week peak, but has since eased back to a touch under $1.44. While some prophets of doom see widening protests in Greece as a reason to doubt the resolve of Greek lawmakers, there is still a widespread belief in the market that Greece will pull through this battle.
Asia
The euro fell against the dollar and yen in Asia Wednesday as investors bet that European sovereign debt concerns will continue to buffet the common currency, with the Greek government's survival of a confidence vote that should help it avert the immediate worsening of its debt crisis offering only temporary relief. Short-term investors who had bid up the euro Tuesday ahead of the confidence vote in Prime Minister George Papandreou's administration sold the unit after the vote passed early Wednesday in Asia. Investors cashed in quickly on their bets because a longer term fix to Greece's sovereign debt problems remains unclear, dealers said. Dealers said the euro could regain ground later if European share markets follow most Asian bourses higher, and if the U.S. Federal Reserve's policy-making Open Market Committee sounds increasingly dovish at the end of a regular two-day meeting. But the currency likely won't top resistance around $1.4450, they said. It rose only to $1.4435 on a brief surge immediately after the Greek vote.
World
The euro pushed above $1.44 Tuesday in New York on investors' hopes the Greek government could survive intact, helping to contain the country's debt crisis over the near term. The session was fueled by expectations that Prime Minister George Papandreou's new cabinet would survive a confidence vote late in the New York day. "Nothing can be taken for granted in the rarefied atmosphere pervading Greece (riots, mass strikes, etc.), but the omens so far look good," said Willie Williams, director of FX institutional sales at Societe Generale. In addition, with the euro able to close above $1.4390, "[our] technical analysts don't see any key resistance until $1.4590-$1.4600 after that level," another good sign for the increasingly scrutinized common currency, he said. The common currency also was helped by a small sign that indicated Greece's troubles could be contained. Fitch Ratings' co-head of EMEA financial institutions, James Longsdon, said a sovereign default by Greece in isolation might not be a problem for big European banks, although a disorderly, more protracted event could be a different story.
Weakness towards 1.4287 is the immediate threat, following the setback off Wednesday's Asian session high at 1.4435. However, while projected support at 1.4287 holds, the short-term recovery off 1.4073 remains on track for the 1.4457 target. EUR bulls need to meet the 1.4457 target in order to validate the recovery off 1.4073. Loss of 1.4287 would undermine the positive EUR outlook, exposing Monday's low at 1.4191.
GBP/USD
Consolidates within a relatively tight 1.6167/1.6254 range, as the recovery off 1.6079 pauses for breath. At this stage, an upside resolution is the more likely, opening 1.6301 and threatening more gains to 1.6340 and 1.6440. A sustained break below 1.6167 would put GBP bears in control of the near-term, exposing Monday's low at 1.6109.
USD/JPY
Action has become rangebound between 80.01 and Monday's high at 80.37. However, last week's bear hammer candle puts USD bears in control, and while significant backup resistance lies at 80.48, the main threat is for a return to the lower end of the range. A downside resolution below 80.01 is be favored at this stage, exposing the June 8 reaction low at 79.69, and enhancing the longer-term threat for weakness to the 78.54 area. A recovery above 80.37 would provide temporary respite, but only a sustained break above short-term pivotal resistance at 80.48 would lift the tone, opening 80.67.
AUD/USD
Resistance at 1.0621 is expected to face renewed pressure, as the recovery off 1.0478 has room to extend. A push above 1.0621 would strengthen the 1.0478 low, and prompt further gains to the June 14 high at 1.0717. Only a reversal below 1.0532 would put AUD bears in control, exposing the 1.0478 low.
Forex Focus
Sterling hawks should be a dead, not a dying, breed. It is amazing how long the hawks have lasted as the U.K. has gone through the worst recession in decades and the global economy has continued to suffer convulsions from the global financial crisis. Even now, there are still two hawks on the Bank of England's monetary policy committee voting for higher interest rates. But, like those investors who have been buying the pound on a yield basis, these members are now looking very isolated as U.K. economic growth proves even more feeble than anticipated and U.K. price pressures have shown little sign of taking root. If anything, more evidence of this feeble recovery is likely to come. A pick-up in growth still looks many months away and the recent reversal in commodity prices will continue to extract some of the inflationary pressures many hawks had been worried about. The latest Bank of England minutes went a long way to argue just this point, noting that even the hawks recognized that "the growth outlook during the month had been weak." But, it is the issue of inflation that has really been dividing the hawks from the doves, with the former arguing that with the current 4.5% inflation expected to rise to 5% in the next month or two, price pressures will become entrenched. In other words, the central bank will have fallen behind the policy curve and the country would be left with the damaging legacy of long-term inflation. However, the minutes make it clear that there is little evidence of this. Inflation is not translating into higher wages and as commodity prices subside, the whole price pressure problem should prove transitory. If anything, the bank now suggests that the inflation rate will fall back under the 2% target and stay there. But, even more galling for hawks, has been the talk of more quantitative easing.
Europe
The euro got a fleeting lift Wednesday after embattled Greek prime minister George Papandreou's new cabinet got the required nod, with traders already looking to the next stumbling block in the still-unfolding Greek story while a downbeat pronouncement on the U.K. economy dented sterling. Greek members of parliament must pass stringent measures worth some EUR28 billion before Greece gets a EUR12 billion lifeline from the European Union. Approval must come by June 30 so that Greece is ready for the Eurogroup meeting scheduled for July 3. Much can happen by then. The confidence vote went along party lines as members of Papandreou's Panhellenic Socialist Movement (Pasok) were eager to stave off early elections but they may not be as quick to say 'yes' to the raft of tough measures given widespread public protests in Greece. The euro rose to as high as $1.4435 against the dollar after the parliamentary vote Tuesday, a one-week peak, but has since eased back to a touch under $1.44. While some prophets of doom see widening protests in Greece as a reason to doubt the resolve of Greek lawmakers, there is still a widespread belief in the market that Greece will pull through this battle.
Asia
The euro fell against the dollar and yen in Asia Wednesday as investors bet that European sovereign debt concerns will continue to buffet the common currency, with the Greek government's survival of a confidence vote that should help it avert the immediate worsening of its debt crisis offering only temporary relief. Short-term investors who had bid up the euro Tuesday ahead of the confidence vote in Prime Minister George Papandreou's administration sold the unit after the vote passed early Wednesday in Asia. Investors cashed in quickly on their bets because a longer term fix to Greece's sovereign debt problems remains unclear, dealers said. Dealers said the euro could regain ground later if European share markets follow most Asian bourses higher, and if the U.S. Federal Reserve's policy-making Open Market Committee sounds increasingly dovish at the end of a regular two-day meeting. But the currency likely won't top resistance around $1.4450, they said. It rose only to $1.4435 on a brief surge immediately after the Greek vote.
World
The euro pushed above $1.44 Tuesday in New York on investors' hopes the Greek government could survive intact, helping to contain the country's debt crisis over the near term. The session was fueled by expectations that Prime Minister George Papandreou's new cabinet would survive a confidence vote late in the New York day. "Nothing can be taken for granted in the rarefied atmosphere pervading Greece (riots, mass strikes, etc.), but the omens so far look good," said Willie Williams, director of FX institutional sales at Societe Generale. In addition, with the euro able to close above $1.4390, "[our] technical analysts don't see any key resistance until $1.4590-$1.4600 after that level," another good sign for the increasingly scrutinized common currency, he said. The common currency also was helped by a small sign that indicated Greece's troubles could be contained. Fitch Ratings' co-head of EMEA financial institutions, James Longsdon, said a sovereign default by Greece in isolation might not be a problem for big European banks, although a disorderly, more protracted event could be a different story.
Selasa, 21 Juni 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
The recovery off 1.4073 extends, to create room for more gains towards 1.4457. The probe above 1.4339 during Monday's Asian session confirms a higher low at 1.4191, and there is scope above 1.4457 for the June 14 lower high at 1.4498. To put EUR bears back in control, a push below 1.4236 is required, exposing 1.4191 and bringing the June 16 reaction low at 1.4073 back into the picture.
GBP/USD
Corrects higher towards resistance at 1.6260 and the more important 1.6301 level. However, GBP bears dominate the medium-term trend and 1.6301 needs to remain intact in order to keep the wider bear threat valid. A push below 1.6170 would spark further weakness towards 1.6109 and the June 16 reaction low at 1.6079. Only a sustained break above 1.6301 would extend recovery scope to 1.6375 and the June 14 high at 1.6440.
USD/JPY
Action has become rangebound between 80.01 and Monday's high at 80.37. However, last week's bear hammer candle puts USD bears in control, and the sharpness of the setback off 81.08 suggests a downside resolution below 80.01 should be favoured at this stage. A break below 80.01 would expose the June 8 reaction low at 79.69, and enhance the longer-term threat for weakness to the 78.54 area. A recovery above 80.37 would provide temporary respite, but only a sustained break above short-term pivotal resistance at 80.48 would lift the tone, opening 80.67.
AUD/USD
Trades within a three-day bear pennant continuation pattern, and the focus of attention is on the 1.0478/95 lows. A downside break is expected to expose the May 25 reaction low at 1.0441, and scope exists for targets at 1.0378 and 1.0325. A push above 1.0617 is required to negate the bearish AUD outlook, opening 1.0635 and 1.0717.
Forex Focus
Investor optimism that Greece will resolve its debt issues without a default and without destroying the euro may be a fine thing. This is helping to preserve long speculative positions in the currency and keeping the euro buoyant. But, in the long run, the euro could pay a nasty price. Instead of facing a steady orderly decline in the face of a Greek disaster, the single currency is now more likely to experience a rout as investors all rush for the door at once. Over the last few days, the euro has displayed an amazing resilience that has surprised forecasters. Instead of falling on fears of political developments in Greece, the currency has actually risen on the assumption that having won a no confidence vote in parliament, Greek Prime Minister George Papandreou will also get approval for his EUR28 billion austerity plan a week from now. There appears to be little recognition of the political risks that exist between now and then as the country still shows little appetite for further fiscal tightening. So even in Papandreou does get his austerity measure through, and avoids a general election, there is no reassurance that those measures will actually be implemented. And that is just on the Greek side. As we have seen in recent weeks, international policy coordination among the troika of institutions that are helping Greece is becoming more difficult at a time when the bailouts are becoming much harder. Even if the International Monetary Fund does cave in and provides its share of the latest funding requirement without full assurances from the European Union about Greece's ability to meet its debt obligations over the next 12 months, there is now the issue of how to stop credit rating agencies from calling Greece in default if the EU goes ahead with plans to restructure private bond holdings on a 'voluntary' basis. Then, of course, there is the matter of how that 'voluntary' restructuring will be negotiated. Some of that roll over could look a lot less 'voluntary' than the optimists are hoping right now.
Europe
The euro mostly clung onto its overnight gains in European trading Tuesday, overcoming a brief wobble after soft German economic data, as traders looked ahead to a pivotal Greek parliamentary vote, a vital step that will shape the outcome of the country's debt crisis. Greek Prime Minister George Papandreou faces a confidence vote in parliament around 2100 GMT, which, if successful, should pave the way to parliamentary approval of the new austerity measures in a separate vote expected later this month. "This crucial vote is likely to determine not only the fate of the Greek government, but indeed the fate of the Greek bailout package," said BNP Paribas in a note to clients. "Our view is that the government passes this test." The country must approve a new, five-year EUR28 billion austerity program and related privatization plan in order for it to receive a second aid package and the next quarterly disbursement of its existing loan from the European Union and International Monetary Fund. Although the euro was trading in the black against the dollar throughout the session, continued uncertainty meant the currency was paralyzed at the start of London trading hours, before springing back to life after the release of a weaker-than-expected German ZEW economic sentiment indicator.
Asia
The euro rose modestly against the dollar and yen in Asia Tuesday as concerns over Greek debt ebbed slightly, but the common currency remained vulnerable ahead of a vote of confidence for Greek Prime Minister George Papandreou later in the day. While many dealers expect the vote to pass, any signs of fresh political uncertainty would add to concerns about the country's sovereign debt crisis, likely pushing the euro down further. The government must pass new austerity measures, scheduled for a parliamentary vote next Tuesday, in order to receive its next installment of aid from the European Union and International Monetary Fund. "The euro likely won't add that much to its gains over the rest of the day before the Greek vote, as market participants take a wait-and-see approach," said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Morgan Stanley Securities. The euro tripped stop-loss buying orders against the dollar and yen, after comments from Papandreou reported early in Asia that he is seeking the "widest possible consensus" for budget cuts. Dealers said the remarks added to the guarded view that an immediate worsening of the crisis could be avoided, after European leaders expressed confidence Monday that Greece would indeed opt for more austerity measures.
World
The euro was little changed Monday in New York, but investors remain wary as the Greek debt situation remains unsettled. The single currency came under selling pressure after euro-zone finance ministers' meeting in Luxembourg failed to reach a long-term agreement on Greece's funding needs. That turned the spotlight on the Greek government, which is facing a crucial confidence vote on Tuesday and a vote next week on an unpopular austerity plan. Failure to pass that plan could potentially throw the euro zone into chaos. The euro reversed its losses a bit after leaders agreed to increase the European Financial Stability Fund (EFSF) to EUR440 billion, which provides a lifeline to the euro zone's most distressed economies. Underscoring fears that a Greek default or restructuring could have repercussions even outside the euro zone, France initiated two teleconference calls among the Group of Seven nations to discuss the implications of a potential Greek debt default. "You do need to reduce Greece's debt burden, but you also need to avoid having a cascading effect through global financial institutions," said Jerry Webman, chief economist at OppenheimerFunds. European leaders must achieve "a package of things" to revamp Greece's ballooning debt, Webman said. "The objective is to keep the global financial system working, and hold the euro zone together."
The recovery off 1.4073 extends, to create room for more gains towards 1.4457. The probe above 1.4339 during Monday's Asian session confirms a higher low at 1.4191, and there is scope above 1.4457 for the June 14 lower high at 1.4498. To put EUR bears back in control, a push below 1.4236 is required, exposing 1.4191 and bringing the June 16 reaction low at 1.4073 back into the picture.
GBP/USD
Corrects higher towards resistance at 1.6260 and the more important 1.6301 level. However, GBP bears dominate the medium-term trend and 1.6301 needs to remain intact in order to keep the wider bear threat valid. A push below 1.6170 would spark further weakness towards 1.6109 and the June 16 reaction low at 1.6079. Only a sustained break above 1.6301 would extend recovery scope to 1.6375 and the June 14 high at 1.6440.
USD/JPY
Action has become rangebound between 80.01 and Monday's high at 80.37. However, last week's bear hammer candle puts USD bears in control, and the sharpness of the setback off 81.08 suggests a downside resolution below 80.01 should be favoured at this stage. A break below 80.01 would expose the June 8 reaction low at 79.69, and enhance the longer-term threat for weakness to the 78.54 area. A recovery above 80.37 would provide temporary respite, but only a sustained break above short-term pivotal resistance at 80.48 would lift the tone, opening 80.67.
AUD/USD
Trades within a three-day bear pennant continuation pattern, and the focus of attention is on the 1.0478/95 lows. A downside break is expected to expose the May 25 reaction low at 1.0441, and scope exists for targets at 1.0378 and 1.0325. A push above 1.0617 is required to negate the bearish AUD outlook, opening 1.0635 and 1.0717.
Forex Focus
Investor optimism that Greece will resolve its debt issues without a default and without destroying the euro may be a fine thing. This is helping to preserve long speculative positions in the currency and keeping the euro buoyant. But, in the long run, the euro could pay a nasty price. Instead of facing a steady orderly decline in the face of a Greek disaster, the single currency is now more likely to experience a rout as investors all rush for the door at once. Over the last few days, the euro has displayed an amazing resilience that has surprised forecasters. Instead of falling on fears of political developments in Greece, the currency has actually risen on the assumption that having won a no confidence vote in parliament, Greek Prime Minister George Papandreou will also get approval for his EUR28 billion austerity plan a week from now. There appears to be little recognition of the political risks that exist between now and then as the country still shows little appetite for further fiscal tightening. So even in Papandreou does get his austerity measure through, and avoids a general election, there is no reassurance that those measures will actually be implemented. And that is just on the Greek side. As we have seen in recent weeks, international policy coordination among the troika of institutions that are helping Greece is becoming more difficult at a time when the bailouts are becoming much harder. Even if the International Monetary Fund does cave in and provides its share of the latest funding requirement without full assurances from the European Union about Greece's ability to meet its debt obligations over the next 12 months, there is now the issue of how to stop credit rating agencies from calling Greece in default if the EU goes ahead with plans to restructure private bond holdings on a 'voluntary' basis. Then, of course, there is the matter of how that 'voluntary' restructuring will be negotiated. Some of that roll over could look a lot less 'voluntary' than the optimists are hoping right now.
Europe
The euro mostly clung onto its overnight gains in European trading Tuesday, overcoming a brief wobble after soft German economic data, as traders looked ahead to a pivotal Greek parliamentary vote, a vital step that will shape the outcome of the country's debt crisis. Greek Prime Minister George Papandreou faces a confidence vote in parliament around 2100 GMT, which, if successful, should pave the way to parliamentary approval of the new austerity measures in a separate vote expected later this month. "This crucial vote is likely to determine not only the fate of the Greek government, but indeed the fate of the Greek bailout package," said BNP Paribas in a note to clients. "Our view is that the government passes this test." The country must approve a new, five-year EUR28 billion austerity program and related privatization plan in order for it to receive a second aid package and the next quarterly disbursement of its existing loan from the European Union and International Monetary Fund. Although the euro was trading in the black against the dollar throughout the session, continued uncertainty meant the currency was paralyzed at the start of London trading hours, before springing back to life after the release of a weaker-than-expected German ZEW economic sentiment indicator.
Asia
The euro rose modestly against the dollar and yen in Asia Tuesday as concerns over Greek debt ebbed slightly, but the common currency remained vulnerable ahead of a vote of confidence for Greek Prime Minister George Papandreou later in the day. While many dealers expect the vote to pass, any signs of fresh political uncertainty would add to concerns about the country's sovereign debt crisis, likely pushing the euro down further. The government must pass new austerity measures, scheduled for a parliamentary vote next Tuesday, in order to receive its next installment of aid from the European Union and International Monetary Fund. "The euro likely won't add that much to its gains over the rest of the day before the Greek vote, as market participants take a wait-and-see approach," said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Morgan Stanley Securities. The euro tripped stop-loss buying orders against the dollar and yen, after comments from Papandreou reported early in Asia that he is seeking the "widest possible consensus" for budget cuts. Dealers said the remarks added to the guarded view that an immediate worsening of the crisis could be avoided, after European leaders expressed confidence Monday that Greece would indeed opt for more austerity measures.
World
The euro was little changed Monday in New York, but investors remain wary as the Greek debt situation remains unsettled. The single currency came under selling pressure after euro-zone finance ministers' meeting in Luxembourg failed to reach a long-term agreement on Greece's funding needs. That turned the spotlight on the Greek government, which is facing a crucial confidence vote on Tuesday and a vote next week on an unpopular austerity plan. Failure to pass that plan could potentially throw the euro zone into chaos. The euro reversed its losses a bit after leaders agreed to increase the European Financial Stability Fund (EFSF) to EUR440 billion, which provides a lifeline to the euro zone's most distressed economies. Underscoring fears that a Greek default or restructuring could have repercussions even outside the euro zone, France initiated two teleconference calls among the Group of Seven nations to discuss the implications of a potential Greek debt default. "You do need to reduce Greece's debt burden, but you also need to avoid having a cascading effect through global financial institutions," said Jerry Webman, chief economist at OppenheimerFunds. European leaders must achieve "a package of things" to revamp Greece's ballooning debt, Webman said. "The objective is to keep the global financial system working, and hold the euro zone together."
EUR/USD
The recovery off 1.4073 extends, to create room for more gains towards 1.4457. The probe above 1.4339 during Monday's Asian session confirms a higher low at 1.4191, and there is scope above 1.4457 for the June 14 lower high at 1.4498. To put EUR bears back in control, a push below 1.4236 is required, exposing 1.4191 and bringing the June 16 reaction low at 1.4073 back into the picture.
GBP/USD
Corrects higher towards resistance at 1.6260 and the more important 1.6301 level. However, GBP bears dominate the medium-term trend and 1.6301 needs to remain intact in order to keep the wider bear threat valid. A push below 1.6170 would spark further weakness towards 1.6109 and the June 16 reaction low at 1.6079. Only a sustained break above 1.6301 would extend recovery scope to 1.6375 and the June 14 high at 1.6440.
USD/JPY
Action has become rangebound between 80.01 and Monday's high at 80.37. However, last week's bear hammer candle puts USD bears in control, and the sharpness of the setback off 81.08 suggests a downside resolution below 80.01 should be favoured at this stage. A break below 80.01 would expose the June 8 reaction low at 79.69, and enhance the longer-term threat for weakness to the 78.54 area. A recovery above 80.37 would provide temporary respite, but only a sustained break above short-term pivotal resistance at 80.48 would lift the tone, opening 80.67.
AUD/USD
Trades within a three-day bear pennant continuation pattern, and the focus of attention is on the 1.0478/95 lows. A downside break is expected to expose the May 25 reaction low at 1.0441, and scope exists for targets at 1.0378 and 1.0325. A push above 1.0617 is required to negate the bearish AUD outlook, opening 1.0635 and 1.0717.
Forex Focus
Investor optimism that Greece will resolve its debt issues without a default and without destroying the euro may be a fine thing. This is helping to preserve long speculative positions in the currency and keeping the euro buoyant. But, in the long run, the euro could pay a nasty price. Instead of facing a steady orderly decline in the face of a Greek disaster, the single currency is now more likely to experience a rout as investors all rush for the door at once. Over the last few days, the euro has displayed an amazing resilience that has surprised forecasters. Instead of falling on fears of political developments in Greece, the currency has actually risen on the assumption that having won a no confidence vote in parliament, Greek Prime Minister George Papandreou will also get approval for his EUR28 billion austerity plan a week from now. There appears to be little recognition of the political risks that exist between now and then as the country still shows little appetite for further fiscal tightening. So even in Papandreou does get his austerity measure through, and avoids a general election, there is no reassurance that those measures will actually be implemented. And that is just on the Greek side. As we have seen in recent weeks, international policy coordination among the troika of institutions that are helping Greece is becoming more difficult at a time when the bailouts are becoming much harder. Even if the International Monetary Fund does cave in and provides its share of the latest funding requirement without full assurances from the European Union about Greece's ability to meet its debt obligations over the next 12 months, there is now the issue of how to stop credit rating agencies from calling Greece in default if the EU goes ahead with plans to restructure private bond holdings on a 'voluntary' basis. Then, of course, there is the matter of how that 'voluntary' restructuring will be negotiated. Some of that roll over could look a lot less 'voluntary' than the optimists are hoping right now.
Europe
The euro mostly clung onto its overnight gains in European trading Tuesday, overcoming a brief wobble after soft German economic data, as traders looked ahead to a pivotal Greek parliamentary vote, a vital step that will shape the outcome of the country's debt crisis. Greek Prime Minister George Papandreou faces a confidence vote in parliament around 2100 GMT, which, if successful, should pave the way to parliamentary approval of the new austerity measures in a separate vote expected later this month. "This crucial vote is likely to determine not only the fate of the Greek government, but indeed the fate of the Greek bailout package," said BNP Paribas in a note to clients. "Our view is that the government passes this test." The country must approve a new, five-year EUR28 billion austerity program and related privatization plan in order for it to receive a second aid package and the next quarterly disbursement of its existing loan from the European Union and International Monetary Fund. Although the euro was trading in the black against the dollar throughout the session, continued uncertainty meant the currency was paralyzed at the start of London trading hours, before springing back to life after the release of a weaker-than-expected German ZEW economic sentiment indicator.
Asia
The euro rose modestly against the dollar and yen in Asia Tuesday as concerns over Greek debt ebbed slightly, but the common currency remained vulnerable ahead of a vote of confidence for Greek Prime Minister George Papandreou later in the day. While many dealers expect the vote to pass, any signs of fresh political uncertainty would add to concerns about the country's sovereign debt crisis, likely pushing the euro down further. The government must pass new austerity measures, scheduled for a parliamentary vote next Tuesday, in order to receive its next installment of aid from the European Union and International Monetary Fund. "The euro likely won't add that much to its gains over the rest of the day before the Greek vote, as market participants take a wait-and-see approach," said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Morgan Stanley Securities. The euro tripped stop-loss buying orders against the dollar and yen, after comments from Papandreou reported early in Asia that he is seeking the "widest possible consensus" for budget cuts. Dealers said the remarks added to the guarded view that an immediate worsening of the crisis could be avoided, after European leaders expressed confidence Monday that Greece would indeed opt for more austerity measures.
World
The euro was little changed Monday in New York, but investors remain wary as the Greek debt situation remains unsettled. The single currency came under selling pressure after euro-zone finance ministers' meeting in Luxembourg failed to reach a long-term agreement on Greece's funding needs. That turned the spotlight on the Greek government, which is facing a crucial confidence vote on Tuesday and a vote next week on an unpopular austerity plan. Failure to pass that plan could potentially throw the euro zone into chaos. The euro reversed its losses a bit after leaders agreed to increase the European Financial Stability Fund (EFSF) to EUR440 billion, which provides a lifeline to the euro zone's most distressed economies. Underscoring fears that a Greek default or restructuring could have repercussions even outside the euro zone, France initiated two teleconference calls among the Group of Seven nations to discuss the implications of a potential Greek debt default. "You do need to reduce Greece's debt burden, but you also need to avoid having a cascading effect through global financial institutions," said Jerry Webman, chief economist at OppenheimerFunds. European leaders must achieve "a package of things" to revamp Greece's ballooning debt, Webman said. "The objective is to keep the global financial system working, and hold the euro zone together."
The recovery off 1.4073 extends, to create room for more gains towards 1.4457. The probe above 1.4339 during Monday's Asian session confirms a higher low at 1.4191, and there is scope above 1.4457 for the June 14 lower high at 1.4498. To put EUR bears back in control, a push below 1.4236 is required, exposing 1.4191 and bringing the June 16 reaction low at 1.4073 back into the picture.
GBP/USD
Corrects higher towards resistance at 1.6260 and the more important 1.6301 level. However, GBP bears dominate the medium-term trend and 1.6301 needs to remain intact in order to keep the wider bear threat valid. A push below 1.6170 would spark further weakness towards 1.6109 and the June 16 reaction low at 1.6079. Only a sustained break above 1.6301 would extend recovery scope to 1.6375 and the June 14 high at 1.6440.
USD/JPY
Action has become rangebound between 80.01 and Monday's high at 80.37. However, last week's bear hammer candle puts USD bears in control, and the sharpness of the setback off 81.08 suggests a downside resolution below 80.01 should be favoured at this stage. A break below 80.01 would expose the June 8 reaction low at 79.69, and enhance the longer-term threat for weakness to the 78.54 area. A recovery above 80.37 would provide temporary respite, but only a sustained break above short-term pivotal resistance at 80.48 would lift the tone, opening 80.67.
AUD/USD
Trades within a three-day bear pennant continuation pattern, and the focus of attention is on the 1.0478/95 lows. A downside break is expected to expose the May 25 reaction low at 1.0441, and scope exists for targets at 1.0378 and 1.0325. A push above 1.0617 is required to negate the bearish AUD outlook, opening 1.0635 and 1.0717.
Forex Focus
Investor optimism that Greece will resolve its debt issues without a default and without destroying the euro may be a fine thing. This is helping to preserve long speculative positions in the currency and keeping the euro buoyant. But, in the long run, the euro could pay a nasty price. Instead of facing a steady orderly decline in the face of a Greek disaster, the single currency is now more likely to experience a rout as investors all rush for the door at once. Over the last few days, the euro has displayed an amazing resilience that has surprised forecasters. Instead of falling on fears of political developments in Greece, the currency has actually risen on the assumption that having won a no confidence vote in parliament, Greek Prime Minister George Papandreou will also get approval for his EUR28 billion austerity plan a week from now. There appears to be little recognition of the political risks that exist between now and then as the country still shows little appetite for further fiscal tightening. So even in Papandreou does get his austerity measure through, and avoids a general election, there is no reassurance that those measures will actually be implemented. And that is just on the Greek side. As we have seen in recent weeks, international policy coordination among the troika of institutions that are helping Greece is becoming more difficult at a time when the bailouts are becoming much harder. Even if the International Monetary Fund does cave in and provides its share of the latest funding requirement without full assurances from the European Union about Greece's ability to meet its debt obligations over the next 12 months, there is now the issue of how to stop credit rating agencies from calling Greece in default if the EU goes ahead with plans to restructure private bond holdings on a 'voluntary' basis. Then, of course, there is the matter of how that 'voluntary' restructuring will be negotiated. Some of that roll over could look a lot less 'voluntary' than the optimists are hoping right now.
Europe
The euro mostly clung onto its overnight gains in European trading Tuesday, overcoming a brief wobble after soft German economic data, as traders looked ahead to a pivotal Greek parliamentary vote, a vital step that will shape the outcome of the country's debt crisis. Greek Prime Minister George Papandreou faces a confidence vote in parliament around 2100 GMT, which, if successful, should pave the way to parliamentary approval of the new austerity measures in a separate vote expected later this month. "This crucial vote is likely to determine not only the fate of the Greek government, but indeed the fate of the Greek bailout package," said BNP Paribas in a note to clients. "Our view is that the government passes this test." The country must approve a new, five-year EUR28 billion austerity program and related privatization plan in order for it to receive a second aid package and the next quarterly disbursement of its existing loan from the European Union and International Monetary Fund. Although the euro was trading in the black against the dollar throughout the session, continued uncertainty meant the currency was paralyzed at the start of London trading hours, before springing back to life after the release of a weaker-than-expected German ZEW economic sentiment indicator.
Asia
The euro rose modestly against the dollar and yen in Asia Tuesday as concerns over Greek debt ebbed slightly, but the common currency remained vulnerable ahead of a vote of confidence for Greek Prime Minister George Papandreou later in the day. While many dealers expect the vote to pass, any signs of fresh political uncertainty would add to concerns about the country's sovereign debt crisis, likely pushing the euro down further. The government must pass new austerity measures, scheduled for a parliamentary vote next Tuesday, in order to receive its next installment of aid from the European Union and International Monetary Fund. "The euro likely won't add that much to its gains over the rest of the day before the Greek vote, as market participants take a wait-and-see approach," said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Morgan Stanley Securities. The euro tripped stop-loss buying orders against the dollar and yen, after comments from Papandreou reported early in Asia that he is seeking the "widest possible consensus" for budget cuts. Dealers said the remarks added to the guarded view that an immediate worsening of the crisis could be avoided, after European leaders expressed confidence Monday that Greece would indeed opt for more austerity measures.
World
The euro was little changed Monday in New York, but investors remain wary as the Greek debt situation remains unsettled. The single currency came under selling pressure after euro-zone finance ministers' meeting in Luxembourg failed to reach a long-term agreement on Greece's funding needs. That turned the spotlight on the Greek government, which is facing a crucial confidence vote on Tuesday and a vote next week on an unpopular austerity plan. Failure to pass that plan could potentially throw the euro zone into chaos. The euro reversed its losses a bit after leaders agreed to increase the European Financial Stability Fund (EFSF) to EUR440 billion, which provides a lifeline to the euro zone's most distressed economies. Underscoring fears that a Greek default or restructuring could have repercussions even outside the euro zone, France initiated two teleconference calls among the Group of Seven nations to discuss the implications of a potential Greek debt default. "You do need to reduce Greece's debt burden, but you also need to avoid having a cascading effect through global financial institutions," said Jerry Webman, chief economist at OppenheimerFunds. European leaders must achieve "a package of things" to revamp Greece's ballooning debt, Webman said. "The objective is to keep the global financial system working, and hold the euro zone together."
Senin, 20 Juni 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
Weakness towards 1.4127 is expected following the setback off Friday's 1.4339 high. However, last week's low at 1.4073 looks secure for now, and only a sustained break below 1.4127 would bring the 1.4073 low back into focus. A recovery above 1.4299 is required to prompt a recovery back to the 1.4339 high, threatening 1.4350 and 1.4384.
GBP/USD
Across-board GBP weakness dominates, leaving last week's low at 1.6079 vulnerable. Last week's push below 1.6218 adds weight to the weak tone, and a break below 1.6079 would expose 1.6057 and 1.5993. However, scope for a deeper setback exists to meet downside targets at 1.5941, 1.5908 and 1.5859 this week. A recovery above 1.6194 is required to provide respite, but only a move above projected resistance at 1.6301 would concern GBP bears.
USD/JPY
The sharpness of the setback off 81.08 suggests the June 8 reaction low at 79.69 is at risk. Last week's bear hammer candle puts USD bears in control, and a break below 79.97 is threatened, bringing the 79.69 low back into the picture. A retest of the 79.69 low would also threaten to create longer-term scope for the 78.54 area. Resistance at 80.48 has become pivotal for the short term, which is protected by 80.30.
AUD/USD
The setback off 1.0635 brings last week's low at 1.0478 back into the picture. The short-term AUD bear trend is still intact, and a break below 1.0478 would expose the May 25 reaction low at 1.0441. However, a break below 1.0478 would also create room for weakness to the 1.0304/1.0327 support cluster. A recovery above 1.0607 is required to provide respite, but only a sustained break above 1.0635 would question the bearish AUD outlook.
Forex Focus
The euro is once again under pressure as the impasse over the Greek debt crisis continues, putting even greater importance on key decisions within and outside the country for the path of the single currency. Investors are still holding out for Greece's funding problems to be resolved, a factor which is shoring up the currency. But expectations that crisis negotiations over the weekend would yield a firm solution were dashed. Instead, European Union authorities have put off the decision, hoping for a mid-July end to protracted talks. The euro succumbed to an early bout of selling Monday, slipping to a session low of $1.4191 against the dollar before coming back above $1.42. But while the outlook for the currency looks uncertain, the prevailing sentiment is still relatively sanguine. Most investors are betting that there is too much at stake for the euro zone as a whole to let Greece default on its loans. Athanasios Vamvakidis, a currencies strategist at Bank of America Merrill Lynch, said the cost of allowing Greece to fail is too high, which should in the end help support the euro. "The baseline is we expect a 'V shape' for the euro's exchange rate versus the dollar."
Europe
A serious break for the dollar under Y80 is more likely now. For weeks, the U.S. and Japanese currencies have traded in a narrow range against each other, trapped on one side by optimism over a U.S. recovery and limited on the other by fears of Bank of Japan intervention. However, both of these key factors could be changing. In the case of the U.S. recovery, recent economic data show that the upturn is proving much more gradual than expected and that the chances of the Fed starting to tighten policy have receded rapidly. If anything, the Fed is expected to confirm at its latest policy meeting on Wednesday that, although QE2 has formally ended this month, the central bank will maintain the current level of liquidity by reinvesting its maturing bond purchases. For the moment, the Fed is denying any suggestion that it is entertaining another dose of quantitative easing, or QE3, but recent data showing that the economy is stalling in the middle of 2011 very much as it did in the middle of 2010, means that talk of further easing will increase. This is coinciding with more evidence that Japan is recovering from the ill-effects of its devastating earthquake and tsunami in the middle of March much more rapidly than anticipated. The Japanese government acknowledged this by raising its review of the economy for the first time in four months. Even initially disappointing trade numbers, showing a further widening in the county's trade deficit, could be read as helpful as imports rose 2.4% on the month, indicating that domestic demand continues to improve.
Asia
The euro was lower in Asian trading Monday, weighed by continuing uncertainties over the Greek political situation and the potential scope of private-sector participation in an additional Greek aid package. Euro-zone finance ministers said early Monday morning they had narrowed their differences over how to get Greece's private-sector creditors to contribute to the country's financing in the coming years. In Athens, Prime Minister George Papandreou is facing a vote of confidence Tuesday as he seeks a new financial aid package and pushes for additional austerity measures in his country. Papandreou's Socialists hold just a five-seat majority in the 300-member parliament and some Greeks are rebelling against their leaders' determination to press the searing budget cuts that are the price of their rescue. "It remains unclear how local politics will play out in the Greek debt problem," said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and Banking. "There are expectations for an early settlement for a new aid package, but there are also concerns that are weighing." Euro-zone finance ministers early Monday left crucial details unresolved, most importantly how to get creditors to participate without causing a Greek sovereign default, although they said they had narrowed their differences over private-sector contribution. The ministers said they aim to have a final plan in place by early July. Market participants continue to closely watch any further developments in the Greek financial assistance, Tokyo dealers said.
World
Revived hopes for a resolution to Greece's debt crisis sent the euro higher Friday in New York, as investors bet finance ministers would wrangle a bailout in weekend meetings. But risks abound that the debt contagion may spread, as underscored by a rating agency warning about the zone's third-largest economy on Friday. The euro pared some gains after Moody's Investors Service put Italy's credit ratings on review for a downgrade. The uncertainty emanating from the euro-zone debt crisis is a risk to Italy, a Moody's analyst told Dow Jones in an interview. "While Greece has been dominating the headlines for some time now, the extent of Europe's sovereign crisis goes well beyond the periphery and could potentially disrupt some of the core economies as well," said Omer Esiner, chief market analyst with Commonw
Weakness towards 1.4127 is expected following the setback off Friday's 1.4339 high. However, last week's low at 1.4073 looks secure for now, and only a sustained break below 1.4127 would bring the 1.4073 low back into focus. A recovery above 1.4299 is required to prompt a recovery back to the 1.4339 high, threatening 1.4350 and 1.4384.
GBP/USD
Across-board GBP weakness dominates, leaving last week's low at 1.6079 vulnerable. Last week's push below 1.6218 adds weight to the weak tone, and a break below 1.6079 would expose 1.6057 and 1.5993. However, scope for a deeper setback exists to meet downside targets at 1.5941, 1.5908 and 1.5859 this week. A recovery above 1.6194 is required to provide respite, but only a move above projected resistance at 1.6301 would concern GBP bears.
USD/JPY
The sharpness of the setback off 81.08 suggests the June 8 reaction low at 79.69 is at risk. Last week's bear hammer candle puts USD bears in control, and a break below 79.97 is threatened, bringing the 79.69 low back into the picture. A retest of the 79.69 low would also threaten to create longer-term scope for the 78.54 area. Resistance at 80.48 has become pivotal for the short term, which is protected by 80.30.
AUD/USD
The setback off 1.0635 brings last week's low at 1.0478 back into the picture. The short-term AUD bear trend is still intact, and a break below 1.0478 would expose the May 25 reaction low at 1.0441. However, a break below 1.0478 would also create room for weakness to the 1.0304/1.0327 support cluster. A recovery above 1.0607 is required to provide respite, but only a sustained break above 1.0635 would question the bearish AUD outlook.
Forex Focus
The euro is once again under pressure as the impasse over the Greek debt crisis continues, putting even greater importance on key decisions within and outside the country for the path of the single currency. Investors are still holding out for Greece's funding problems to be resolved, a factor which is shoring up the currency. But expectations that crisis negotiations over the weekend would yield a firm solution were dashed. Instead, European Union authorities have put off the decision, hoping for a mid-July end to protracted talks. The euro succumbed to an early bout of selling Monday, slipping to a session low of $1.4191 against the dollar before coming back above $1.42. But while the outlook for the currency looks uncertain, the prevailing sentiment is still relatively sanguine. Most investors are betting that there is too much at stake for the euro zone as a whole to let Greece default on its loans. Athanasios Vamvakidis, a currencies strategist at Bank of America Merrill Lynch, said the cost of allowing Greece to fail is too high, which should in the end help support the euro. "The baseline is we expect a 'V shape' for the euro's exchange rate versus the dollar."
Europe
A serious break for the dollar under Y80 is more likely now. For weeks, the U.S. and Japanese currencies have traded in a narrow range against each other, trapped on one side by optimism over a U.S. recovery and limited on the other by fears of Bank of Japan intervention. However, both of these key factors could be changing. In the case of the U.S. recovery, recent economic data show that the upturn is proving much more gradual than expected and that the chances of the Fed starting to tighten policy have receded rapidly. If anything, the Fed is expected to confirm at its latest policy meeting on Wednesday that, although QE2 has formally ended this month, the central bank will maintain the current level of liquidity by reinvesting its maturing bond purchases. For the moment, the Fed is denying any suggestion that it is entertaining another dose of quantitative easing, or QE3, but recent data showing that the economy is stalling in the middle of 2011 very much as it did in the middle of 2010, means that talk of further easing will increase. This is coinciding with more evidence that Japan is recovering from the ill-effects of its devastating earthquake and tsunami in the middle of March much more rapidly than anticipated. The Japanese government acknowledged this by raising its review of the economy for the first time in four months. Even initially disappointing trade numbers, showing a further widening in the county's trade deficit, could be read as helpful as imports rose 2.4% on the month, indicating that domestic demand continues to improve.
Asia
The euro was lower in Asian trading Monday, weighed by continuing uncertainties over the Greek political situation and the potential scope of private-sector participation in an additional Greek aid package. Euro-zone finance ministers said early Monday morning they had narrowed their differences over how to get Greece's private-sector creditors to contribute to the country's financing in the coming years. In Athens, Prime Minister George Papandreou is facing a vote of confidence Tuesday as he seeks a new financial aid package and pushes for additional austerity measures in his country. Papandreou's Socialists hold just a five-seat majority in the 300-member parliament and some Greeks are rebelling against their leaders' determination to press the searing budget cuts that are the price of their rescue. "It remains unclear how local politics will play out in the Greek debt problem," said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and Banking. "There are expectations for an early settlement for a new aid package, but there are also concerns that are weighing." Euro-zone finance ministers early Monday left crucial details unresolved, most importantly how to get creditors to participate without causing a Greek sovereign default, although they said they had narrowed their differences over private-sector contribution. The ministers said they aim to have a final plan in place by early July. Market participants continue to closely watch any further developments in the Greek financial assistance, Tokyo dealers said.
World
Revived hopes for a resolution to Greece's debt crisis sent the euro higher Friday in New York, as investors bet finance ministers would wrangle a bailout in weekend meetings. But risks abound that the debt contagion may spread, as underscored by a rating agency warning about the zone's third-largest economy on Friday. The euro pared some gains after Moody's Investors Service put Italy's credit ratings on review for a downgrade. The uncertainty emanating from the euro-zone debt crisis is a risk to Italy, a Moody's analyst told Dow Jones in an interview. "While Greece has been dominating the headlines for some time now, the extent of Europe's sovereign crisis goes well beyond the periphery and could potentially disrupt some of the core economies as well," said Omer Esiner, chief market analyst with Commonw
Sabtu, 18 Juni 2011
i'm appologize
I'm sorry for the followers or all of you, who always read my blogg or whose need the trading strategy or need the fundamental data from me, because since march 31, 2011 I never wrote my data. But I have a good news for you. Since monday (tomorrow) I will start write again and give you my best. So, don't be miss it. See you, and thank you
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