Comments and forex-analytics from FBS Brokerage Company - page 128
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Citigroup: pound may fall to 1985 minimum
British pound fell from maximum at $1.6000 reached yesterday (highest point since November 2011) to the levels around $1.5915.
Analysts at Citigroup believe that the pair GBP/USD may fall to the minimal level since 1985 at $1.3255. The specialists underline that sterling approached strong resistance at $1.6014 (200-week MA). Pound hasn’t crossed this line since August 2008.
Watch US durable goods release
The market is eyeing US durable goods release at 12:30 GMT as there isn’t much to watch in Europe today. Investors want more info about the condition of US economy. Societe Generale underlines that the focus remains on growth indicators.
Commonwealth Bank of Australia: “The risk is that durable goods orders are going to be even stronger than economists predict and that will push the U.S. dollar higher.”
American durable goods are expected to add 3.0% in February (m/m) after January decline by 3.7%. Core figure is seen up by 1.6%.
SocGen: buy USD/CHF
Analysts at Societe Generale claim that as the pair USD/CHF stays above the 200-day MA, it looks attractive. In addition, EUR/CHF, which is currently trading at 1.2060, is close to the Swiss National Bank's floor at 1.2000.
The specialists recommend opening longs at the current levels stopping at 0.8850 and targeting 0.9500.
Pound’s suffering from weak data
On Wednesday the British pound dropped versus its major peers on the backdrop of negative data coming from U.K.
According to the U.K. Office for National Statistics, seasonally-adjusted GDP shrank 0.3% during the fourth quarter versus the preliminary estimate of a 0.2% contraction. However, the current-account deficit decreased slightly to 8.5 billion pounds in the last quarter against 10.5 billion in the third. The household incomes in 2011 fell by 1.2%.
On Tuesday the Chancellor of the Exchequer George Osborne said Britain is now “in the recovery phase.” Osborne used his March 21 budget to spur businesses to invest and hire by cutting taxes for companies and high earners.
Bank of England Governor Mervyn King said that in 2012 the U.K. economy will be extremely volatile and the European crisis remains the biggest threat for U.K. economy rebound.
Today GBP/USD slipped to the $1.5941 level. Cable is likely to find support at $1.5800, Monday’s low and resistance at $1.5963, the session high. The EUR/GBP reached the 0.8372 level.
RBS: comments on EUR, CAD, CHF
- EUR/USD has strengthened in the recent days due to the short covering to $1.3330. The outlook for euro’s still negative. The fair value for the pair lies well below $1.3000, so it makes sense to go short on the pair.
- USD/CAD: the pair is trading between 0.99 and parity. The pair failed to overcome resistance at the 200-day MA. Solid data in the US will keep improving prospects for Canadian economy, so loonie will likely appreciate. The upcoming budget release on Friday and comments from Bank of Canada Head Carney could also strengthen loonie driving USD/CAD lower.
- USD/CHF: even despite the speculation about additional QE in the United States after Bernanke’s comments, short-term fair value (STFV) model continues to suggest about 3% upside for USD/CHF from current levels. Swiss policymakers may favor weaker franc. Solid US data expected in the coming weeks should support the pair.
GBP: up or down? (Commerzbank, Danske)
Commerzbank and Danske Bank analysts split over the prospects of the cable.
According to Commerzbank specialists, GBP/USD is likely to slide from current highs, even though yesterday it tested the $1.6000 psychological resistance line. The 200-week MA lies at $1.6014 and the cable has not traded above here since 2008. The specialists think that the pair will decline to $1.5650, the minimums of the range within which the pair’s trading since the end of January.
On the other hand, Danske Bank analysts express the opposite view on the cable’s prospects. The Danish bank advises clients to buy the pound against the greenback at $1.5830 aiming at $1.6036 with a stop at $1.5900.
Saxo Bank: comments on USD/JPY
Analysts at Saxo Bank note that “short yen versus the dollar has been the main theme of the quarter and the market seems to have taken it too far heading into the Japanese fiscal year-end.” The specialists underline that US/Japan rate spreads are not supportive of where dollar/yen is at the moment. In their view, “there is more scope for yen strength in the near-term before it weakens against the dollar again and one-year forecast is at 88 yen.”
RBC: forecast for USD/JPY
Analysts at RBC Capital Markets claim that US dollar made last week a reversal pattern “bearish divergence” as it fell below 82 yen.
The specialists expect USD/JPY to keep declining to 82.02 and 80.60. At the latter level the bank recommends going long on the greenback within the upward trend which began in February.
According to RBC, if US currency manages to rise above 83.63, it will be able to get higher to 84.16 and 85.53 yen.
BMO, BBH: trading recommendations for EUR/USD
Specialists at BMO Capital suggest a strategy to benefit from the dollars’ temporary slippage. They recommend going short when EUR/USD reaches $1.35 level or now at $1.33 with a stop at $1.34 and targeting at $1.30.
On Tuesday the Fed’s Chairman Ben Bernanke hinted that the third round of QE is on the cards. "The euro rose after Bernanke's comments, but it wasn't a widespread shift," BMO analysts say.
According to Brown Brothers Harriman, the common currency is unlikely to stand above $1.33 on the back of the concerns about the European banking sector and the sovereign debt problems.
Yen keeps strengthening
USD/JPY continues its decline as Japanese exporters are seen selling US dollar in large amounts as the nation’s financial year ends today and MSCI Asia Pacific Index fell by 0.8% after losing 0.5% yesterday.
Strategists at Royal Bank of Scotland say that yen is now more correlated with the stock market’s moves, so they are in favor of selling USD/JPY. If the pair closes today below 82.60 (March 27 and 28 minimums), it will likely fall to 81.87/97 (March 2 maximum, March 23 minimum). Resistance for US currency lies in the 83 area (Tenkan-sen at the daily Ichimoku chart).
However, analysts at Bank of Tokyo-Mitsubishi underline that despite the recent sell-off of the greenback and dovish Bernanke’s comments, the greenback seems resilient against yen. In their view, dollar will get more support when new toushins (currency-selective type investment trust funds) are launched and life insurers' foreign bond buying gains momentum from April.