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Dukascopy Forex Overview: 07-05-2012 - Afternoon

Dukascopy Bank analytic desk report
Published: 07/05/2012 17:37
Dukascopy Fundamental Analysis
EUR
France has elected new president, Francois Hollande who polled about 52% of the votes. Mr Hollande said that he is proud to return hope to people again. He also announced that he would attempt to rework deal regarding sovereign debt in the Euro Zone countries to promote economic expansion.

USD
The smalest payroll increase in last 6 months has not influenced the investors who still do not forecast another wave of recession in the US. Better housing and employment data has encouraged experts to believe that from the fundamental perspective the world's largest economy is on the path to recovery.

GBP
May 7 was a bank holiday in Great Britain.

CHF
The official SNB exchange rate for EUR/CHF is 1.2013 today; yield on 10-year Swiss Confederation bonds decreased to 0.68%. 3-month LIBOR CHF stands at 0.11%, and is within the target range of 0.00-0.25%. Swiss SMI stock index has lost 0.50% since the opening bell, and is currently fluctuating around 6026 points.

JPY
Japan's Nikkei Stock Average tumbled sharply on Monday as French socialist leader Francois Hollande was elected President, adding to fears austerity measures would face resistance in Europe. Nikkei 225 lost 2.78% or 261.11 points and closed at 9,119.14. Export shares fell on worries depreciating Euro may curb the value of Japanese trading in the region. Sony fell 4.5% and Sharp plunged 5.8%. Honda Motor plunged 5.6% while Konami posted the biggest drop for the Nikkei index giving up 17.6.
Dukascopy Technical Analysis
EUR/USD
Daily maximum: 1.3045
Daily minimum: 1.2962
EUR/USD paired earlier losses during the Asian sessions after the German monthly factory orders rose more than expected (2.2% act./0.5% est.), breaching the daily forecast mean at 1.3104. Daily Resistance: 1.3146; 1.3211; 1.3244. Daily Support: 1.3048; 1.3015; 1.2950. Daily Bias: Strongly bearish.

EUR/JPY
Daily maximum: 104.14
Daily minimum: 103.47
EUR/JPY moved higher today on strong German monthly factory orders (2.2% act./0.5% est.) while investors expected a decline in this indicator. Thus, the pair pierced the market participants' target at 104.71. Daily Resistance: 105.23; 105.99; 106.41. Daily Support: 104.05; 103.63; 102.87. Daily Bias: Strongly bearish.

GBP/USD
Daily maximum: 1.6172
Daily minimum: 1.6115
The Cable traded higher today against the US dollar as the US trade deficit is expected to widen in March to record-high surge in imports, causing the pair to hith the daily target at 1.6162. Daily Resistance: 1.6190; 1.6227; 1.6251. Daily Support: 1.6129; 1.6105; 1.6068. Daily Bias: Strongly bearish.

USD/JPY
Daily maximum: 79.98
Daily minimum: 79.73
The pair inched slightly lower today as the US trade deficit grew in March. Daily Resistance: 80.24; 80.61; 80.84. Daily Support: 79.64; 79.41; 79.04. Daily Bias: Bearish.

USD/CHF
Daily maximum: 0.9265
Daily minimum: 0.9207
USD/CHF erased previous intraday gains after the news release the US trade deficit widened in March as imports in the US rose more than expected, causing the pair to slip lower while leaving the daily forecast mean at 0.9165 intact. Daily Resistance: 0.9204; 0.9229; 0.9273. Daily Support: 0.9135; 0.9091; 0.9066. Daily Bias: Strongly bullish.
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Expert Commentary
"Eurozone member states should agree to multilateral coordination reflation and stim-ulation measures to kick-start growth"
Y. Akbar, Professor at CEU Business School on the Eurozone economy. >>

"Our second quarter forecast for EUR/USD is 1.26"
Carl Hammer, Chief FX Strategist at SEB, shared his view on the Euro performance and its potential direction in the observable future>>

"We expect the US Dollar to come under pressure in the month ahead"
John Horner, FX Strategist at Deutsche Bank, on thse US Dollar>>
Press Review
Europe
Analysis: Greek, French voters reject German-led austerity
Greek voters dealt a serious blow on Sunday to the fragile political consensus that has kept Europe's currency bloc intact through more than two years of crisis, rejecting the austerity-for-aid policies that have shielded the country from bankruptcy and a euro exit.

USA
S&P 500 Futures Fall as Europe’s Voters Reject Austerity
U.S. stock futures fell, following the biggest weekly slump in 2012, after Francois Hollande’s election as France’s president and Greek voters flocking to anti-bailout parties spurred concern about Europe’s debt crisis.

Asia & Pacific
Chinese Data to Show More Signs Economy's Bottomed
With the United States struggling through a soft patch and Europe battling recession, China may come to the rescue by demonstrating a resilience that would provide comfort in a sea of economic uncertainty.
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Market Research
Currency Index & Volatility
The single European currency has been quite calm the last five trading days relative to its major counterparts, such as the Japanese Yen, US Dollar and New Zealand Dollar. The Euro’s value remained within +0.5% and -0.5% deviations, providing volatility as an appanage to other currencies.
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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Global Stock Market Review
S&P
S&P 500 index dropped sharply on Friday after data showed that hiring slowed rapidly in April. The report confirmed investor concerns that the US economic recovery is struggling. S&P 500 fell 1.61% or 22.47 points and closed at 1,369.10, marking the biggest weekly drop for this year.

Dow Jones Industrial Average
Dow Jones Industrial Average index fell on Friday as disappointing data from European and American labour markets fuelled fears that world wide economy might be on the track for another slowdown.

Hang Seng
Hong Kong’s Hang Seng tumbled along with other Asian indices on Monday after Francois Hollande the French Socialist was elected President and US hiring climbed less than predicted. Hang Seng index fell 2.61% or 549.35 points and finished at 20,536.65 showing the weakest performance since November 2011.
Commodity Overview
Precious Metals
Precious metals were mixed on Friday amid broadly stronger US Dollar despite disappointing US labour market data. Meanwhile, traders were cautious ahead of key elections in Greece and France.
 
Industrial Metals
Industry metals were impacted by the global growth worries after disappointing services PMI releases as well as sluggish recovery of the US labour market.
 
Energy
Energy commodities tumbled on Friday, being pressured by stronger US Dollar and weak economic data releases.
 
Agriculture
Agricultural commodities were mixed on Friday as negative headlines from the Euro Zone and US lingered concerns that global demand may weaken. 
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Trade Pattern Idea
Emerging Pattern: AUD/CHF
AUD/CHF has been decreasing during last few weeks forming a channel down pattern on the 1H chart. The formation has 68% quality and 75% magnitude within 189 bars. 

The price rebounded twice from the support level at 0.9332 and at 0.9296 respectively. Then the pair slowed near the resistance level around 0.9397, which increase the possibility of a bearish recoil.

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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Dukascopy Aggregate Technical Indicator
   
Dukascopy Bank presents a new research product - the aggregate technical indicator. The new tool will indicate the strongest signals on major currency pairs.
Recent Articles

Australian business confidence improved last month

Australia's business confidence improved last month amid anticipation of the further rate reduction by the Australia's central bank. However, actual economic situation remained weak. Business confidence index added four points last month after gaining three points in March. At the same time, business conditions declined by three points, attaining zero in April>>
 

IMF may discontinue Greek bailout funding

The IMF has warned Greece to halt Greek bailout funding after the preliminary results of the Greece parliamentary elections. The IMF announced that in case the country does not meet agreed austerity measures, the bailout funding will be suspended starting from June, according to the official IMF statement>>

DAX 30
German DAX index traded lower on Monday as investors anticipated news about French and Greek elections where voters favoured anti-austerity political forces. Losses were limited as German factory orders expanded more than expected in March. On the upside Commerzbank and BMW AG added 1.8% and 1.3% respectively>>
 
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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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