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."