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.
Kamis, 23 Juni 2011
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
Kamis, 31 Maret 2011
FOREX INTRADAY SNAPSHOT
EUR/USD
The euro is poised to win this intriguing two-day standoff, and a push above 1.4149 is expected to open projected resistance at 1.4188. A push through 1.4188 is required to keep the uptrend intact, opening 1.4220 and the Mar. 22 reaction high at 1.4249. The 1.4095 area will look to contain weakness, but only a break below Wednesday's 1.4052 low would concern bulls.
GBP/USD
A short-lived foray towards 1.6150 is expected, following the completion of a near-term double-bottom on the 60-minute chart. However, this rally is considered counter-trend and the 1.6150 level is expected to limit the corrective upside scope. A push below 1.6012 is required to put bears back in control and attract further weakness to Monday's 1.5937 reaction low.
USD/JPY
Suffers a significant setback off 83.22, and support at 82.48 is being tested. However, with solid support lying at 82.00, downside risk would appear to be limited should 82.48 break. Regaining ground above 83.06 is required to bring the 83.22 high back into focus and longer-term bulls are still targeting the Feb. 16 reaction high at 83.98.
AUD/USD
Maintains the powerful uptrend into fresh 29-year highs, as AUD bulls close in on the projected 1.0400/1.0425 area. The structure of the bull wave off Tuesday's 1.0204 low suggests there is scope for the 1.0455 area, which marks the upper side of a resistance cluster. Only a reversal below 1.0269 would question the bullish outlook, exposing 1.0204.
FOREX FOCUS
Just a whiff of the hawks and the dollar has got all perky. Imagine what it will do when speculation of a U.S. rate rise really gets going. This week's parade of Federal Reserve officials banging the "end-to-QE2" drum may not have been entirely convincing. Some of the loudest of these officials haven't even been voting members of the Fed's open market committee. All they may have done is drown out the quieter doves, who will still vote to keep policy where it is at the next FOMC meeting ending April 27. Certainly, not all financial markets have been persuaded by the beat of the drums. Equities, which normally get hit at the prospect of tighter liquidity conditions, have continued to rally strongly, both in the U.S. as well as in other major global markets. Similarly, there has been little response in U.S. Treasurys, which would also normally reflect expectations of higher interest rates in the near-term with a rise in the yields of short-term bonds. This reticence to react to the hawks could be driven by the flow of U.S. economic data, which remains mixed at best. Although there has been recent evidence of improvements in the U.S. employment market, a recent decline in consumer confidence, could well convince more dovish Fed officials to preserve the country's ultra-easy monetary policy for now. However, the reaction in currency markets to these hawkish comments has been decidedly different. The dollar's trade-weighted index, which has been sliding steadily for the last five months, has turned higher this week, showing a distinct rebound that coincides with the talk of bringing the Fed's second round of quantitative easing to an end.
EUROPE
The euro continued higher Thursday, buoyed by predictions that the European Central Bank will lift interest rates next week and make further increases through the rest of the year as it tries to tackle rising inflation. In data released Thursday, the euro zone's annual inflation rate jumped to 2.6% in March, its highest level for 29 months. Economists were expecting the inflation rate to dip to 2.3% from 2.4% in February, according to a Dow Jones Newswires survey last week. The euro has also been supported by comments made Wednesday by the ECB's Lorenzo Bini Smaghi, who said the central bank will raise interest rates gradually while ensuring help is available for euro-zone banks that face difficulties from higher borrowing costs. But while the euro has found enough buying support to push it past the $1.42 level against the dollar, there are host of worries to keep it from rising too far, particularly the outlook for the area's fiscally-challenged states. Portugal is still widely seen as heading for a bailout, while already-rescued Greece and Ireland remain in the spotlight.
ASIA
The dollar slipped against the yen in Asia Thursday, as exporters and traders locked in profits following the greenback's recent rally, with speculation of an early end to U.S. credit easing waning. The dollar rose as high as Y83.22 in early trade on speculation that local fixing would show a shortage of dollars at the end of fiscal book-closing, but the gains lost steam after exporters started selling the greenback and short-term speculators unwound dollar longs, traders said. "The dollar's upside is also technically capped at Y83.30 to Y83.50. Hopes for an end to U.S. quantitative easing alone are not enough to push the pair up above those levels," says Yuzo Sakai, foreign exchange manager at Tokyo Forex and Ueda Harlow. It is hard to see the dollar continuing to rise unless we get a conviction that the (U.S. Federal Reserve) will take the next step," said Tomoko Fujii, senior forex strategist at Bank of America Merrill Lynch. "If the Fed will bring forward the end period of its credit easing (that is slated to end in June), that would be meaningful, but we can't count on that too much."
WORLD
The euro edged up against the dollar Wednesday in New York as the effect of recent hawkish rhetoric from Federal Reserve officials wore off, paring the dollar's recent gains. Central bank monetary policy has been the main catalyst for currency markets of late, as the European Central Bank is widely expected to raise interest rates in April and as several Fed officials have signaled their support for a more aggressive approach to inflation in coming months. Earlier this week, the dollar advanced on heightened hopes for an end to the Fed's accommodative policy stance, but the euro gained the upper hand as ECB board member Lorenzo Bini Smaghi signaled that there will be a number of rate rises to come in the euro zone. "When European central bankers are talking about rates, the euro benefits, when you have FOMC members talking about rates, the dollar benefits. It's kind of a tug of war right now," said Michael Woolfolk, senior currency strategist at Bank of New York-Mellon. Markets have been more sensitive to official commentary in recent days as they await key U.S. economic data at the end of the week, along with additional Fed speakers
The euro is poised to win this intriguing two-day standoff, and a push above 1.4149 is expected to open projected resistance at 1.4188. A push through 1.4188 is required to keep the uptrend intact, opening 1.4220 and the Mar. 22 reaction high at 1.4249. The 1.4095 area will look to contain weakness, but only a break below Wednesday's 1.4052 low would concern bulls.
GBP/USD
A short-lived foray towards 1.6150 is expected, following the completion of a near-term double-bottom on the 60-minute chart. However, this rally is considered counter-trend and the 1.6150 level is expected to limit the corrective upside scope. A push below 1.6012 is required to put bears back in control and attract further weakness to Monday's 1.5937 reaction low.
USD/JPY
Suffers a significant setback off 83.22, and support at 82.48 is being tested. However, with solid support lying at 82.00, downside risk would appear to be limited should 82.48 break. Regaining ground above 83.06 is required to bring the 83.22 high back into focus and longer-term bulls are still targeting the Feb. 16 reaction high at 83.98.
AUD/USD
Maintains the powerful uptrend into fresh 29-year highs, as AUD bulls close in on the projected 1.0400/1.0425 area. The structure of the bull wave off Tuesday's 1.0204 low suggests there is scope for the 1.0455 area, which marks the upper side of a resistance cluster. Only a reversal below 1.0269 would question the bullish outlook, exposing 1.0204.
FOREX FOCUS
Just a whiff of the hawks and the dollar has got all perky. Imagine what it will do when speculation of a U.S. rate rise really gets going. This week's parade of Federal Reserve officials banging the "end-to-QE2" drum may not have been entirely convincing. Some of the loudest of these officials haven't even been voting members of the Fed's open market committee. All they may have done is drown out the quieter doves, who will still vote to keep policy where it is at the next FOMC meeting ending April 27. Certainly, not all financial markets have been persuaded by the beat of the drums. Equities, which normally get hit at the prospect of tighter liquidity conditions, have continued to rally strongly, both in the U.S. as well as in other major global markets. Similarly, there has been little response in U.S. Treasurys, which would also normally reflect expectations of higher interest rates in the near-term with a rise in the yields of short-term bonds. This reticence to react to the hawks could be driven by the flow of U.S. economic data, which remains mixed at best. Although there has been recent evidence of improvements in the U.S. employment market, a recent decline in consumer confidence, could well convince more dovish Fed officials to preserve the country's ultra-easy monetary policy for now. However, the reaction in currency markets to these hawkish comments has been decidedly different. The dollar's trade-weighted index, which has been sliding steadily for the last five months, has turned higher this week, showing a distinct rebound that coincides with the talk of bringing the Fed's second round of quantitative easing to an end.
EUROPE
The euro continued higher Thursday, buoyed by predictions that the European Central Bank will lift interest rates next week and make further increases through the rest of the year as it tries to tackle rising inflation. In data released Thursday, the euro zone's annual inflation rate jumped to 2.6% in March, its highest level for 29 months. Economists were expecting the inflation rate to dip to 2.3% from 2.4% in February, according to a Dow Jones Newswires survey last week. The euro has also been supported by comments made Wednesday by the ECB's Lorenzo Bini Smaghi, who said the central bank will raise interest rates gradually while ensuring help is available for euro-zone banks that face difficulties from higher borrowing costs. But while the euro has found enough buying support to push it past the $1.42 level against the dollar, there are host of worries to keep it from rising too far, particularly the outlook for the area's fiscally-challenged states. Portugal is still widely seen as heading for a bailout, while already-rescued Greece and Ireland remain in the spotlight.
ASIA
The dollar slipped against the yen in Asia Thursday, as exporters and traders locked in profits following the greenback's recent rally, with speculation of an early end to U.S. credit easing waning. The dollar rose as high as Y83.22 in early trade on speculation that local fixing would show a shortage of dollars at the end of fiscal book-closing, but the gains lost steam after exporters started selling the greenback and short-term speculators unwound dollar longs, traders said. "The dollar's upside is also technically capped at Y83.30 to Y83.50. Hopes for an end to U.S. quantitative easing alone are not enough to push the pair up above those levels," says Yuzo Sakai, foreign exchange manager at Tokyo Forex and Ueda Harlow. It is hard to see the dollar continuing to rise unless we get a conviction that the (U.S. Federal Reserve) will take the next step," said Tomoko Fujii, senior forex strategist at Bank of America Merrill Lynch. "If the Fed will bring forward the end period of its credit easing (that is slated to end in June), that would be meaningful, but we can't count on that too much."
WORLD
The euro edged up against the dollar Wednesday in New York as the effect of recent hawkish rhetoric from Federal Reserve officials wore off, paring the dollar's recent gains. Central bank monetary policy has been the main catalyst for currency markets of late, as the European Central Bank is widely expected to raise interest rates in April and as several Fed officials have signaled their support for a more aggressive approach to inflation in coming months. Earlier this week, the dollar advanced on heightened hopes for an end to the Fed's accommodative policy stance, but the euro gained the upper hand as ECB board member Lorenzo Bini Smaghi signaled that there will be a number of rate rises to come in the euro zone. "When European central bankers are talking about rates, the euro benefits, when you have FOMC members talking about rates, the dollar benefits. It's kind of a tug of war right now," said Michael Woolfolk, senior currency strategist at Bank of New York-Mellon. Markets have been more sensitive to official commentary in recent days as they await key U.S. economic data at the end of the week, along with additional Fed speakers
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