Comments and forex-analytics from FBS Brokerage Company

[jeshinta]

Analysts at Scotiabank note that there are risks for loonie coming from potential slowdown of China’s economic growth – remember that Canadian dollar is a growth-linked currency.

“The most significant development is China’s announcement of a 7.5% growth expectation this year, below last year’s 8% and sending shivers down the spines of commodity currency traders. We are medium term CAD bulls, but view the outlook for China’s growth as one of the keys to CAD strength.”

“Technically, a USD/CAD close above 0.9953 would be bullish for short***8208;term traders, with the 200***8208;day MA of 0.9993 serving as the first level of resistance.”



Chart. Daily USD/CAD


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

Analysts at UBS recommend traders to watch the Swiss National Bank’s meeting on March 15 with great attention. In their view, the pressure on the central bank increased after interim President Jordan confirmed the SNB’s commitment to defend EUR/CHF floor at 1.20 noting that Swiss franc is still greatly overvalued.

The specialists say that one may get some hints on what course the SNB will take from Switzerland’s February CPI figures which are released on Thursday. If consumer prices keep showing increasing deflation, the SNB will lift EUR/CHF peg to 1.30 in the second half of 2012.

Swiss economy has so far showed inspiring results: retail sales added 4.4% (y/y), GDP rose in the final 3 months of 2011 by 1.3% (vs. the forecast of 0.9%).



Chart. Daily EUR/CHF


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

The Reserve Bank of Australia left the cash rate unchanged at 4.25%. According to the explanation, given by the RBA Governor Glenn Stevens, the decision was caused by the decrease of concerns, connected with the European economy and by its positive prospects in 2012. However, he pointed that Chinese growth is starting to moderate.

It is important to note that the RBA interest rates stay relatively high in comparison to many developed economies where policy has been loosened to extremes. This fact provides Australia with various instruments to manage the situation in case if the European crisis will gather pace.

"The resilience of growth through to the end of 2011 is notable and is consistent with our view that the RBA does not need to provide any further stimulus," affirm JP Morgan analysts. The median estimate now forecasts growth of around 0.8% in the fourth quarter, from an initial 0.7%. Growth for the year was expected to be 2.4%.

Australia’s dollar weakened to $1.0621 as of 3:18 p.m. in Sydney from $1.0671 yesterday, after touching $1.0612, the lowest since Feb. 23. The Aussie dropped 0.7 percent to 86.45 yen from yesterday, when it fell 0.9 percent.



Chart. Daily AUD/USD


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

EUR/USD dropped to $1.3180 today amid data that the euro-zone GDP fell 0.3% last quarter from the previous three months.

Time for reflection on the question of the participation of the private sector in Greek bond swaps is running out. Greek Finance Minister Evangelos Venizelos suggested the country is ready to strong-arm private investors into accepting a deal that could have far-reaching implications for markets. He believes that private holders don’t have any better alternative than to submit to Greek terms.

Forecasts on prospects of the common currency differ. Some specialists dissuade from buying euro, because, in their opinion, now the European Central Bank is tied up with tackling the region’s sovereign-debt problem and has no room left to bolster the economy through monetary policy. Analysts at UBS claim that there are still a lot of obstacles on euro's road as even ECB’s President Mario Draghi still regards euro-zone’s economic conditions as fragile. As a result, the specialists are bearish on euro in the medium term. In their view, EUR/USD will slide to $1.25 in several months and hit $1.15 in a year.

However, other specialists believe that if the agreement on bond swaps is reached, there will be no more serious reasons for concern and a decline in short positions on euro may take place.



Chart. Daily EUR/USD


Kind Regards,
Jeshinta
FBS Brokerage Company

[salikcell]

the key position and the pivotal monthly/weekly lines between 1.3261/90 and it would be strong resistent

startegy sell on rallies while the monthly pivot on that area are not breaking

[jeshinta]

Originally Posted by salikcell

the key position and the pivotal monthly/weekly lines between 1.3261/90 and it would be strong resistent

startegy sell on rallies while the monthly pivot on that area are not breaking

I'm agree with you sir, thank's for your time to come to this thread ..
I hope you enjoy and come again to discuss in here ..


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

Australian GDP growth turned out to be lower than expected: 0.4% instead of 0.7% forecast. In the previous quarter the indicator reached 0.8%. As a consequence, the Aussie dropped testing to the level of $1.0500 before recovering to $1.0560.

China's export and import growth is anticipated to slow to around 7% year-on-year in January-February. However, the country plans to adopt measures to help the exporters cope with difficulties such as an insufficient number of orders from elsewhere in the world, rising costs and growing trade frictions. Minister of Commerce Chen Deming said that the passage of a bill by the US Senate to empower the Department of Commerce to impose countervailing duties on Chinese imports is not in line with the rules of the World Trade Organization.

Japan’s foreign reserves fell to $1.303 trillion at the end of February, posting the first fall in two months, as lower prices of U.S. Treasury notes offset higher gold prices. February’s reserves fell from a record high of $1.307 trillion marked at the end of January. The MOF said Japan did not intervene in the forex market between January and February.

Japanese yen held gains from yesterday versus most of its major peers concern about Greece’s ability to complete a debt swap supported demand for the currency as a refuge. Analysts at Sumitomo Mitsui believe that USD/JPY may go down to the 80 yen level and lower. The pair dropped from March 2 maximum at 81.87 to the 80.65 yen area.

In the UK shop price inflation edged down from 1.4% in January to 1.2% hitting its lowest level since March 2010. One of the reasons for this is that the January 2011 VAT hike has dropped out of the comparatives and in part by consumer caution. It is also important to note that the growth in permanent job placements picked up speed in February following the rise in January, which had been the first expansion since September last year. Economists say that the data point to a broad stabilization in the labor market rather than any permanent upward shift in employment.

Greek PSI deal remains in the center of markets attention as the time given to Greece’s private creditors to decide on their voluntary participation in the debt swap runs out tomorrow.

The euro has weakened 3% in the past six months, while the dollar has strengthened 4.4% according to Bloomberg. The yen decreased by 2.3%.

Events to watch

At 8:00 a.m. GMT watch SNB’s foreign currency reserves data. The increase of reserves might be franc-negative.

In the United States one should pay attention to ADP February Non-Farm employment change at 1:30 p.m. GMT (jobs growth’s expected, this index may provide some hints at Friday’s NFP data which is released by the US Labor Department) and January building permits (negative projection). The country is also to publish revised data on non-farm productivity and labor costs, which are important inflationary indicators, and a report on crude oil stockpiles.

To learn more about today’s economic data releases consult FBS economic calendar.



Chart. Daily AUD/USD


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

The single currency rebounded today from the minimums in the $1.3111 area.

Analysts at Forecast Pte note that the market’s speculation about barrier options with a $1.3100 knock-out strike. Holders of these options appear to be buying the euro in order to protect themselves.

Knock-out option is an option with a built-in mechanism to expire if a specified price level is passed. Such option sets a floor or cap to the level which an option can reach in favor of the holder. As knock options limits the profit potential for the option buyer.



Chart. Daily EUR/USD


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

Technical analysts at Westpac note that Australian dollar has finally breached its sideways trend as it dipped below $1.6000. The specialists believe that Aussie’s fair value is in the area of parity with its US counterpart.

The bank recommends selling AUD/USD on the rallies to $1.0600. The pair may return to this level helped by global risk appetite. The specialists expect Australian currency to decline to $1.0300/1.0400 in several weeks.

The argument in favor of selling AUD is that the Federal Reserve didn’t hint on more QE. In addition, the analysts observe that Japanese retail investors show no sign of rebuilding their unusually low AUD/JPY long positions after they have taken profits on AUD/JPY’s advance in the first 2 months of the year.

However, for the pair to fall lower, to $1.0200, there should be some really negative news such as Greece’s default.



Chart. Daily AUD/USD


Kind Regards,
Jeshinta
FBS Brokerage Company

[jeshinta]

The next Bank of England's policy meeting will be held on March 8. Many analysts believe that the asset purchase target is likely to be left unchanged at £325 billion this year and a rate cut is not on the agenda.

According to the forecasts, the first rate hike will be delivered only in February 2014. "With the housing market and wider economy looking weak, there is actually very little scope for raising interest rates as it would almost certainly trigger a double-dip recession," said Phil McHugh, an analyst at trading group Currencies Direct.

Despite the fact that two MPC members wanted to raise quantitative easing purchases by additional £25 billion last month, economists no longer expect any more QE. The shift in forecasts is partly due to the signs the economy is growing modestly after contracting late last year, reduced concerns about Greece's debt crisis and a surge in oil prices.

The MPC’s main task is to use monetary policy tools to try and keep Britain's annual inflation rate close to a government-set target of 2.0%. The latest data showed that Britain's 12-month inflation rate fell sharply in January from 4.2% to 3.6%.

"Most policymakers would probably view the high oil price as likely to have a clear negative impact on growth given weak consumer demand, and thus overall put downward pressure on inflation over the next 2-3 years," said BNP Paribas economist David Tinsley.

Bank of England policymaker Martin Weale said last week that UK inflation may prove more persistent than expected, hinting that it is unlikely the economy will require a further stimulus once the current round of asset purchases ends. This is by far the most explicit indication by an official that the MPC's £50bn increase in stimulus in February could be the last.

However, the economy is recovering only slowly and unemployment remains too high. Inflation is coming down and the main projection is still for CPI to fall below the 2% target level by the end of the year.

British economy shrank 0.2% in the fourth quarter of last year compared with the third, according to recent official data. A further contraction in the first quarter would place Britain back in recession.



Chart. Daily GBP/USD


Kind Regards,
Jeshinta
FBS Brokerage Company