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Dukascopy Forex Overview: 22-05-2012 - Morning
| Dukascopy Bank analytic desk report Published: 22/05/2012 09:39 | |
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Dukascopy Fundamental Analysis
EUR
"Inevitably there is going to be an element of bargain hunting as investors look to top up their holdings on the basis of slightly lower prices"- Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers European stocks edged higher on Monday on China’s pledge to boost growth. USD
"Equity prices have gotten oversold"- Mark Luschini, chief investment strategist for Janney Montgomery Scott LLC U.S. equity market edged higher on Monday on China stimulus hopes and after German and French officials said they would cooperate to keep Greece in the monetary union. GBP
"Obviously, as the euro depreciates, the U.K. gets slightly more expensive"- Miles Shipside, Rightmove commercial director U.K. national house prices stagnated in March, announced the Rightmove Plc, owner of the U.K.'s largest residential property Web site, on Monday. London house values rose 0.9 per cent from April to an average of 469,314 pounds as investors search for a safe haven from the debt crisis. CHF "This rally is being driven by hope of policy steps, possibly from China or EU leaders, while data are all less than ideal" - Witold Bahrke, a senior strategist at PFA Pension A/S Swiss stocks rose on Monday on Chinese Premier Wen Jiabao's pledge to focus more on bolstering growth. JPY "To a degree, the market has priced in the risk of Greece’s exit from the euro" - Ichiro Yamada, general manager of equities at Fukoku Mutual Life Insurance Japanese stocks closed mixed on Monday. |
Dukascopy Technical Analysis
EUR/USD
"Expectations are growing for measures to tackle the European debt crisis to be hammered out at EU summit meeting"- Bank of Tokyo-Mitsubishi UFJ (based on WSJ) Pullback of EUR/USD did not last for long, as the pair has only rallied up to 1.2818, where it was halted by a resistance. For the time being the currency couple should trade sideways, as it is supported by 1.2772. GBP/USD
"Cable could ease towards $1.55 and even $1.53 primarily because of the dollar's strength and also because the BoE's stance has not really changed"- Saxo Bank (based on Reuters) Support at 1.5785 has repeatedly repelled GBP/USD, which is expected to erode the level eventually, as the CAble has recently bounced off a formidable resistance at 1.6111 and is headed towards 1.5263, which, in turn, might be attained within the next three months. USD/JPY
"If they [the BoJ] do surprise and expand their asset-purchase program again, the reaction will be relatively subdued and short lasting"- Citigroup (based on Bloomberg) USD/JPY is currently attempting to recover from 78.87 (200 day SMA), although the gains should remain tepid, being that the pair is closing in to a downtrend resistance, which has been respected by the market since Mar 15. USD/CHF
"I do not think this option [QE3] can be taken off the table. QE3 will work under the right circumstances. But I don't believe such circumstances prevail at his time"- Dennis Lockhart, Atlanta Federal Reserve President (based on CNBC) USD/CHF seems to have terminated its bearish correction, which has stopped ahead of an initial support located at 0.9359. In case of an unlikely scenario when the currency pair breaches the latter level, it may target 0.9307 first, then 0.9216/11. |
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Expert Commentary
" There is no reason to buy the Yen for the time being"
Masafumi Yamamoto, Chief Currency Strategist at Barclays Bank, on the Yen. >>"We are now expecting AUD/USD at the year end at around 97, a continued move below parity" "If Greece left the Eurozone, the Eurozone would become more stable"
Lutz Karpowitz, Senior Currency Strategist at Commerzbank, on Greece exit from the Eurozone. >> |
Press Review
Europe
A Greece euro exit could make Lehman's collapse 'look like a tea party'European officials have made mistakes in their dealings with Greece. The austerity measures were too harsh. They shouldn't have been nearly so brutal, and that lesson has been learnt. Now with the election of Francois Hollande as France's new president everyone can change course slightly and pretend they meant to do it all along (they didn't). USA
Many Eligible Borrowers Passing Up Foreclosure ReviewsBy April 30, fewer than 165,000 people had applied to have their foreclosures checked for mistakes — about 4 percent of the 4.1 million who received letters about the free reviews late last year, according to the Office of the Comptroller of the Currency. Asia & Pacific
Temasek Says Markets Entering Period of Stress in Next 2 YearsTemasek Holdings Pte, Singapore’s state-owned investment company, said it expects the markets to enter a “period of stress” for the next one to two years amid the European debt crisis, adding risks to investments. |
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Market Research
Currency Index & Volatility
Within the observed period (May 14 - May 17) the value of the Euro, quantifiable through its respective currency index, has been fluctuating just below its initial level, while last Friday brought in considerable changes into the market . |
Dukascopy Bank Sentiment Index
The current and the three-year global economic sentiment indices deteriorated slightly in April to 0.49 and 0.64 points respectively. The six month economic sentiment index improved to 0.54 from 0.52 in March, according to a poll conducted by Dukascopy Bank SA. |
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Dukascopy Aggregate Technical Indicator
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Commodity Overview
Precious Metals
Precious metals extended previous gains on Friday amid broadly weaker US Dollar and China’s easing hopes.Industrial Metals
Industry metals were mostly higher in volatile session on Friday as market participants expected the outcome of the G8 summit.Energy
Energy markets were lower on Friday amid lingering concerns over the Euro Zone’s economic instability. Moreover, growing OPEC production continued to dampen investors’ sentiment.Agriculture
Agricultural commodities were mixed on Friday as US weather remains abnormally hot while sugar and coffee supplies are rising. |
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Trade Pattern Idea
Emerging Pattern: USD/CHF
USD/CHF broke its resistance level at 0.9250 forming a channel up pattern on the 4H chart. The pattern has 64% quality with 75% magnitude in a 55-bar period. The price rebounded from the SMA200 indicator at 0.9116, then soared to the resistance level at 0.9470 and slowed near the 0.9481 level. Present bias on the 4H and daily timeframes is bullish, which leads to an uptrend extension. SMA200 started to increase after the pair had touched at the 0.9116 level, which supports the idea of a short-term increase. Bullish traders might focus their attention on the key level at 0.9500. If the price breaches this level, the initial target for long traders could be around 0.9576 where the five-month high stands . |
Economic Research
Commodity currency: Norwegian Krone
The Dukascopy Bank research department presents the final part of its research on commodity currencies. In the current issue we consider commodity sectors’ influence on Norwegian krone exchange rates. Norway is the second largest non-OPEC oil exporter, and energy products make up more than 50% of its exports. It gives us an opportunity to establish whether the exports’ share can be named as one of the relationship-defining factors. |
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| Disclaimer: This overview can be used only for informational purposes. Dukascopy Bank SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained. |
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There is no reason to buy the Yen for the time being.
