Russian view on financial markets

Dmitry Shagardin

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05/26/2009.
What’s new about EURUSD?:cool:

Last month the dollar has strongly fallen in price concerning a basket of six basic world currencies such as euro, pound sterling, yen, the Swiss franc, the Canadian dollar and the Swedish crone. So, for last month EUR/USD has grown up by 8 % and has reached $1,40 level.
However on May, 25-26th the dollar has a little strengthened the positions due to negative fundamental news from Europe together with a technical picture of price movement.
From my point of view several reasons have affected euro easing. Let’s look at them.
1. There was not so positive data from German institute IFO.
2. The international rating agency Moody's Investors Service has lowered forecasts of two Bulgarian banks ratings.
3. Daily Telegraph has published the information about possibility of increase in Deutsche Bank bad debts volume. Estimated debts are 200 billion euro, and the volume of write-offs can reach 816 billion euro that exceeds the general reserves of German financial institutions twice.
4. On May, 26th level of Germany gross national product for the first quarter of 2009 is published.
5. For the first three months of this year the German economy was reduced by 3,8 % in comparison with IV quarter of 2008 and by 6,9 % against I quarter of 2008, as well as analysts expected. The index of consumer confidence GfK for June remains at 2,5 the fourth month successively.

And what about US currency?:?:

On Tuesday the data of prices for the inhabited real estate in USA are expected. It is supposed that rates of prices reduction in March were slowed down again, having made 18,4 % against 18,6 % in February.
On Tuesday the auction of 2-year Treasury note ($40 billion), on Wednesday - 5-year Treasury note ($35 billion), on Thursday - 7-year Treasury note ($26 billion) are planned. Auctions will reflect the American dollar appeal to investors against speculations about the USA rating decrease.

I see the rise tendency according to the news, but as usual – each trader should follow his own strategy.
Anyway, hope the information was useful:D
 
EURUSD – nice to follow the trend

Well, I decided that it would be a nice tradition to write my analysis of EURUSD “behavior”. Hope I am not alone who is interested in these data.:smart:
So, yesterday, on May, 27th, the American dollar has added 1,1 % relative to euro. In comments of ECB representatives it was marked about possibility of the further key interest rate decrease below current level - 1 %. It became the main reason of euro drop. The following ECB session is planned for June, 4th, 2009.
As I see it (and my colleague in the FBS company supports my point of view) dollar growth has been caused by the following reasons:idea::
1/ The international rating agency Moody's has confirmed a rating of the USA at level AAA.
2/ Good results in auctions for placing 2-year, 5-year and 7-year Treasury notes.
3/According to interrogation of National Association of Business Economists, the majority of market participants expect economic recession end in 2009.
4/ Home sales index in April have grown by 2,9 % (4,68 million), the statistics has appeared better than expectations of analysts.
Today, on May, 28th, the euro was supported by the Germany unemployment report according to which the rate of unemployment in May was 8,2% that was above expectations by 0,3 %. Besides, Eurozone index of economic confidence has reached 69,3 points in May against 67,2 points in April.
On May, 28th in the USA, the data for durable goods orders, jobless claims, new home sales will be published. According to forecasts, the sales volume in the primary market in April has increased by 1,1 % to 360 thousand against 356 thousand month before, and the volume of durable goods orders has grown by 0,5 % after decrease by 0,8 % month before.
Meanwhile, fears, concerning possibility of US inflation sharp jump which can lead to considerable dollar decrease, continue to sound. Known American investor Mark Faber has come out with the assumption that the United States will face a hyperinflation.
Experts of US Federal Reserve System don’t exclude increase of inflationary pressure. The President of Federal Reserve Bank of Philadelphia, Charles Plosser, has told that in 2011 inflation can rise to 2,5%, having exceeded the target reference point of 2,0%. In this case FRS should lift rates and to reduce monetary base, and, according to Plosser, the American economy isn’t ready for this.
That’s it. See you. :cool:
 
Farewell to dollar?

Yesterday, EUR/USD has tested $1,4245 level that is maximum level from the beginning of year.:!:
Highly remunerative currencies, including euro, have been supported by positive news from China. So, the industrial production index of China in May remained above 50 points indicating economic activity increase. Industrial production indexes of the Eurozone and Great Britain in May remained below 50 points but dynamics of their change was positive and has surpassed analysts’ expectations.
Industrial index ISM (USA) has risen to level 42,8 from 40,1 in April. However in the USA there is a problem of a huge public debt which puts pressure upon dollar.
Nevertheless, in view of EUR/USD strong growth which in May has grown by 6,7 % (from the beginning of March euro has risen by 12%!), analysts of the largest European banks (Deutsche Bank, UBS and Barclays Capital) recommend to sell euro. FBS experts don’t exclude that within three months euro can fall to $1,30 level.
Pressure upon euro can amplify on the threshold of ECB session on which the destiny of the key interest rate will dare. Remember that ECB does not exclude interest rate decrease below 1%. It will lead to euro exchange rate drop. ECB session will take place on June, 4th.
Today the following block of macroeconomic statistics is expected:
1/ Unemployment rate in the Eurozone for April (previous value – 8,9%, forecast – 9,1%).
2/ Pending Home Sales Index in USA for April.
See you:smart:
 
Strong EURO. And what about DOLLAR?

Hope you are not bored to death with my blog. So I want to follow the good tradition of writing here my view on EURUSD "relations":smart:

On May, 3rd the dollar has won back a little after the falling relatively to euro. EUR/USD has declined by 1%. Investors, in spite of negative macro economical statistics, left highly remunerative currencies, preferring the American dollar and US treasuries. First, US Factory Orders index in April has grown only by 0,7%, instead of expected 1,1%. Secondly, ISM non-manufacturing index in May has reached 44,0 in comparison with 43,7 in April and contrary to expectations of 45,0. This indicator is above 50 throughout eight months on end, specifying economic activity reduction. Thirdly, the number of workplaces in the American companies in April has decreased by 545 thousand, according to report of ADP Employer Services. Fourthly, against the bad statistical data almost all share platforms of the world have decreased.
Today all attention is concentrated on European Central Bank session on which the decision about the key interest rate level will be made. The Bank of England and the Bank of Canada will also make decisions about key interest rates. Performances of the Federal Reserve System chairman Ben Bernanke and ECB chairman Jean-Claude Trichet are planned for today.
Today the following block of macroeconomic statistics is expected:
1/ Retail sales in the Eurozone for April (previous value - -0,6%, forecast - +0,2%).
2/ Jobless Claims in USA for week (previous value – 623H, forecast – 620H).
However, FBS analysts predict that the euro will continue to become stronger relatively to dollar. It is connected, first of all, with possible acceleration of inflation rates. State budget huge deficiency is threat of US financial stability.
See you:cool:
 
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Stability makes me feel good=)

Well, it’s really amazing – one of my friends told me that he used my analysis to carry out some transactions and…he succeeded!!!! Now our friendship as firm as ever:cheesy: and I can continue my analytical exercises.
So, on May, 4rd EURUSD holds steady near the previous levels. The European Central Bank, the Bank of England and the Bank of Canada left key rates at the same level. The European Central Bank, which sets interest rates for the 16-nation euro zone, held its key rate at 1% and said it will launch a €60 billion program to buy low-risk bonds in July. Canada's central bank, meanwhile, left its key rate on hold at a record low of 0.25%. The Bank of England also kept its key rate on hold at 0.5%.
ECB President Jean-Claude Trichet, speaking at a news conference following the central bank's decision, forecast the pace of the bloc's sharp slowdown will ease this year. Mr. Trichet called the current 1% policy-rate level "appropriate."
Today the following block of macroeconomic statistics is expected:
1/ Britain Producer Output Price Index for May
2/ Britain Producer Input Price Index for May
3/ Employment index in Canada for May
4/ Unemployment index in Canada for May (previous level – 8,0%, forecast – 8,2%).
5/ Employment Situation in the USA for May. Nonfarm payroll employment fell a very steep 539,000 in April, following a 699,000 plunge in March. The good news was the contraction in jobs eased somewhat. The big question for the May employment report is whether the shrinkage in losses will continue. A second slowing in a row in payroll layoffs will be a boost to equities. On the wage front, average hourly earnings were very weak in April, rising only 0.1 percent and May's number likely will be sluggish, too. Turning to the household survey, the unemployment rate jumped 4 tenths to 8.9 percent in April. If this rate doesn't ratchet upward again in May, it will be a big surprise as it is hard to find an economist not calling for further increases in the unemployment rate for some time.
6/ US Consumer Credit index for April (previous level – $-11.1 B, forecast – $-7.0 B)
FBS analysts predict that the euro will continue to become stronger relatively to dollar. It is connected, first of all, with possible acceleration of inflation rates. State budget huge deficiency is threat of US financial stability.
Best regards,
Dmitry:smart:
 
Don’t worry, be trader...

As usually I post in my blog the EURUSD review and as usually think that it will help somebody…To my mind the situation on market is now a little bit unpredictable. But I think there is no occasion to worry…:smart:

The euro traded at $1.4089, up from $1.3883 Monday. The dollar index, a measure of the greenback against a basket of major currencies, fell to 79.751, down from 80.961 in North American trading Monday afternoon.
The euro traded at $1.4089, up from $1.3883 Monday.
The U.S. dollar declined Tuesday, reversing a steep increase over the past few trading sessions, as investors questioned the long-term staying power of the greenback's recent resurgence.
The dollar fell as a pop in oil prices and stability in U.S. stock markets boosted risk appetite and sent investors into currencies that pay higher yields than the greenback.
The euro recouped some earlier gains after data showed a steeper-than-expected drop in German industrial output.
The dollar index, a measure of the greenback against a basket of major currencies, fell to 79.751, down from 80.961 in North American trading Monday afternoon.
The euro traded at $1.4089, up from $1.3883 Monday.
The dollar registered strong gains last week, jumping after U.S. non-farm payrolls showed a smaller-than-expected loss of jobs during May. U.S. Treasury yields jumped, particularly at the short end, on increasing bets that the Federal Reserve could begin to raise its official interest rate from near zero by the end of the year.
Dollar bears argue that the greenback's recent jump was largely a rebound from technically oversold levels and that fundamentals will favor a return to weakness in the U.S. currency in the near term.

The block of macroeconomic statistics, collected by FBS analysts:
1. Germany - CPI. There were no revisions to headline inflation in May. The final data still have the CPI declining 0.1 percent on the month to show no change on the year, down from an annual rate of 0.7 percent in April.
2. Great Britain - Industrial Production. For once, the industrial sector exceeded expectations in April when output rose 0.3 percent on the month. Moreover, the originally reported 0.6 percent fall in March was halved.
Even so, the increase still left a 3.2 percent drop in production over the latest 3-month period while in the year to April alone, activity was down 12.3 percent.
3. Great Britain - Merchandise Trade. The merchandise trade gap widened out by a larger than expected Stg0.5B to Stg7.0B in April. The deterioration reflected a 2.6 percent monthly rise in imports that more than offset a 0.6 percent increase in exports. The underlying trade deficit performed in much the same fashion, posting an extra Stg0.7B of red ink to reach Stg6.6B as import growth outstripped exports.
4. United States - International Trade. The U.S. international trade gap in March widened to $27.6 billion from $26.1 billion deficit the month before. But the widening was not due to a rise in imports but due to exports dropping a sharp 2.4 percent. Meanwhile, imports slipped 1.0 percent. Oil imports did rise but were offset by other imports falling. The March report paints a picture of contracting demand worldwide. Looking ahead, we may say a widening in the April gap due to higher oil prices boosting overall imports. But there is a good chance that we'll see a further deterioration in both exports and nonoil imports.
5. United States - Treasury Budget. The U.S. Treasury monthly budget report posted a record $20.9 billion deficit in April, a month that since 1983 (not long after the end of the 1982 recession) has seen nothing but budget surpluses.

See you!:cool:
 
EURUSD – What's up?

Everybody knows that macroeconomic data always influences on markets. The last week wasn’t exception to the rules…

Last week EUR/USD has fallen by 1,5 %.(n)
Last week has been sated by the European economy macroeconomic data. The index of business activity in industrial sector has grown to 40.7 points and in services sector to 44.8. Retail sales in April have a little grown up, however, annual dynamics remains negative – retail sales has declined by 2.3%. All other reports carried the extremely negative shade. Gross national product for 4 quarter of 2008 was reduced to 2.5%, the data for 4 quarter has been reconsidered, as a result annual falling of gross national product has made 4.8%. My colleagues from FBS company predicted falling to 4.6 %. The unemployment rate continued prompt growth and has reached 9.2%. Producer prices for April have dropped to 1.0%, and annual falling has reached 4.6%. These are record values from the beginning of indicator calculation since 1980.
The European Central Bank, which sets interest rates for the 16-nation euro zone, held its key rate at 1% and said it will launch a €60 billion program to buy low-risk bonds in July. ECB President, Jean-Claude Trichet, speaking at a news conference following the central bank's decision, forecast the pace of the bloc's sharp slowdown will ease this year. Mr. Trichet called the current 1% policy-rate level "appropriate."
The situation in Europe will continue to remain difficult; the rate of unemployment can already exceed 10% level. Many European countries are subject to risk of sovereign obligations defaults. German chancellor A. Merkel has scarified the US Federal Reserve System and the Bank of England because of their active monetary issue.
However, in view of EUR/USD strong growth which in May has grown by 6,7 % (from the beginning of March euro has risen by 12%!), analysts of the largest European banks (Deutsche Bank, UBS and Barclays Capital) recommend to sell euro. UBS experts don’t exclude that within three months euro can drop to $1,30 level.
Investors, against negative macrostatistics, left highly remunerative currencies, preferring the American dollar and US treasuries.
1/ US Factory Orders index in April has grown only by 0,7%, instead of expected 1,1%.
2/ ISM non-manufacturing index in May has reached 44,0 in comparison with 43,7 in April and contrary to expectations of 45,0. This indicator is above 50 throughout eight months on end, specifying economic activity reduction.
3/ The number of workplaces in the American companies in April has decreased by 545 thousand, according to report of ADP Employer Services.
Payroll employment in May was unexpectedly and significantly less negative than in recent months. But the unemployment rate also was a sharply higher than projected. Nonfarm payroll employment in May fell only 345,000, following a decrease of 504,000 in March and a drop of 652,000 in February. The May drop-off was not as severe as the consensus forecast for a 530,000 decrease. March and February revisions were up a net 82,000. For the latest month, losses were widespread in both goods-producing and services-providing industries.
By major categories, goods-producing jobs fell 225,000 in May, led by a 156,000 drop in manufacturing employment with motor vehicles & parts down 30,000. Construction declined 59,000 while natural resources & mining decreased 10,000 in the latest month. Service-providing payrolls fell only 120,000 in May after dropping 230,000 the month before. The latest decline was led by a 51,000 decline in professional business services, a 30,000 fall in financial activities, and a 22,000 decrease in wholesale trade.
On a year-ago basis, payroll jobs were down 3.9 percent in May, compared to down 3.7 percent the month before.
Wage inflation remained very soft in May as average hourly earnings posted a 0.1 percent gain, matching the rise in April and coming in below the consensus forecast for a 0.2 percent rise. The average workweek edged down to 33.1 hours from 33.2 hours in April.
The yield on the benchmark 10-year Treasury note rose to a seven-month high.
Last week the US dollar has made prompt jerk upwards that can signal about end of American currency downward trend.

See you:cool:
 
06/22/2009 GBPUSD review

I decided to write here something new...
So welcome to my GBPUSD review :smart:

Fundamental review.
The pound was 0.5% higher versus the dollar. The Britain pound bought 1,6499 American dollar.
Last week a lot of the macroeconomic statistics and news was published in Great Britain. Many data carried a negative shade.
- U.K. inflation continued to fall in May but, not for the first time in recent months, the deceleration was much less sharp than expected. Hence, the CPI rose firmly by 0.6 % in comparison with April that, while largely seasonal, was enough to see just a 0.1 percentage point drop in the 12-month rate to 2.2 %. CPI inflation accordingly remains above its 2 % target.
- Recent comments from the BoE have been deliberately cautious about the U.K. economy's recovery prospects.
- Annual average earnings growth accelerated to 0.8 percent in the three months to April. The outcome, which followed a slightly smaller revised 0.3 % decline in March, was above expectations but still low enough to underline the lack of any significant inflationary pressure in the domestic labour market.
- The number of people out of work rose by a further 39,300 on the month to 1,544,800 in May. The rise, which was smaller than expected, lifted the jobless rate by 0.2 % points to 4.8 % from a weaker revised 4.6 percent in April.
- On the ILO measure, joblessness climbed by some 232,000 in the three month to April. The increase took the number out of work to 2,261,000 and lifted the jobless rate to a slightly lower than expected 7.2 %, still its highest level since the second quarter of 1997.
- Retail sales volumes were unexpectedly weak in mid-quarter when volumes fell 0.6 % from April to stand 1.6 % lower on the year.
My сolleagues from FBS company keep frostily negative forecast on the British pound.
This week the following macroeconomic data will be published:

See you:cool:
 

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Currency market has no summer vacations

There is very good weather in Saint-Petersburg now and a lot of people and some of my colleagues from FBS Company have holydays. But the currency market has no summer vacations:cool: Every day in the currency market happens a thousand of the events. About the events of previous week I would like to write in my blog.

06/29/2009
The euro was 0,2% higher versus the dollar at $1,4080.
The European currency was supported by strong macrostatistics data from Europe. The dollar was supported by the statement of the head of China National bank.
The main events and news:
- Economic sentiment improved across the European region for the third month in a row in June. At 73,3 the headline index was at its highest level since November last year (76,6), up 3,1points from a slightly firmer revised level in May and at the upper end of expectations. The June recovery reflected modest gains in most of the index components. Amongst the larger EMU states, sentiment was up 3,2 points in both France (80,7) and Germany (77,6). Italy saw a smaller 1,1 point rise (80,2) while Spain improved by 1,5 points (75,1). Most smaller members also registered gains.
- The head of National bank of China Chzhou Sjaochuan has declared that China does not plan to change in the near future the structure of currency reserves which remains enough steady.
- Analysts of American bank JPMorgan suppose that the American currency can weaker in immediate prospects due to positive American corporate reports, so the growth of highly remunerative actives and currencies will renew. However there is an opinion that the American economy will be restored faster European, and it will help first of all to US dollar which in the nearest half a year can become stronger by 10-15 %.

06/30/2009
The euro declined by 0,4% versus the dollar at $1,4030. European currency lost the positions against negative dynamics at share markets due to weak U.S. consumer sentiment data.
The main events and news:
- In Germany the unemployment rose by another 31 000 on the month at the end of the quarter. The June increase was the eighth in a row and lifted the jobless rate by 0,1% points to a much as expected 8,3% . Changes to methodology helped to reduce the May increase by between 10 000 and 20 000 but even allowing for this, the rise was surprisingly small. The June gain was similarly down on average forecasts for an advance of around 50 000 so it may be that the labor market is actually holding up rather better than originally anticipated.
- In Great Britain the quarterly decline in the economy previously put at 1,9% was revised yet steeper. At 2,4%, the new estimate marks the worst performance in more than half a century and revisions also mean that recession was entered in the third quarter of last year and so earlier than originally thought. Annual growth at the start of the year was revised even more sharply to minus 4,9% from 4,1%. The large revision to the first quarter was mainly due to added weakness in services where output dropped 1,6% or 0,4% more than previously reported. Activity in the construction sector was similarly adjusted down but the goods producing sector was revised stronger at minus 5,1% from -5,3%.
- Deutsche Bank experts have reconsidered the forecast of economic development for 2010, expecting growth by 2,5 %. The forecast, published in March, assumed growth by 2 %.
- The U.S. consumer sector appears to have crumbled in June, according to this morning's chain-store reports and most prominently by the Conference Board's consumer confidence index which fell 5-1/2 points to 49,3. This index, along with other consumer readings, had been showing big improvement as consumers grew increasingly less pessimistic on current conditions and especially on the outlook. But the expectations component fell back in June, down 6 points to 65,5. The assessment of the present situation, in another setback, fell nearly 5 points to 24,8. High unemployment and high gas prices are two central reasons for the pessimism. Those saying jobs are plentiful fell 1,3 percentage points to a microscopic 4,5 percent.

07/01/2009
The euro was 0,8% higher versus the dollar at $1,4144. Euro growth was supported by the statements of financial representatives and encouraging statistics from Europe, USA and Asia.
The main events and news:
- In Germany, real retail sales, excluding autos, rose a stronger than expected 0,4% on the month in mid-quarter. The modest advance, which followed an unrevised 0,5% increase in April, still left volumes 2,9% weaker on the year but, more significantly, also put the average April/May level up 0,8% from the first quarter mean. The latest monthly advance was the third in succession and clearly suggests that the worst of the downswing is now over as far as the retail sector is concerned.
- In Japan, second quarter Tankan for large manufacturing firm business confidence improved to a reading of minus 48 from minus 58 in the first quarter. The first quarter reading showed that business confidence had slumped to the lowest level over the 35 year history of the survey. Medium and small non-manufacturing industries barely edged upward as well.
- According to U.S. Challenger Job-Cut Report, jobless claims are definitely turning lower as is Challenger's layoff count, which fell sharply in June to 74 393 versus 111 182 in May. June's total is the lowest since the first months of the recession. The report said the results suggest the worst of the economic crisis has passed and that second-half layoff announcements are likely to be below those of the first half.
- ADP is calling for private payroll contraction of 473 000 in June, not much changed from May's revised contraction of 485 000.
- The U.S. PMI rose as widely foreseen, up 2 points to 44,8. The index was expected to climb by roughly 2 points a month until hitting the month-to-month breakeven level of 50 sometime in the third quarter. But that view may have changed given a nearly 2 point decline in new orders to 49,2, a sub-50 reading indicating that a greater share reported a month-to-month decline than a gain.

07/02/2009
The euro fallen by 1% versus the dollar at $1,4000. The dollar was supported by negative macrostatistics from Eurozone and USA.
The main events and news:
- According to Eurozone unemployment data, joblessness rose by a further 273 000 to more than 15 million in mid-quarter, a new 10-year high. With April revised up by 0,1%, the rise in the number of people out of work was accompanied by a 0,2% point increase in the unemployment rate to a higher than expected 9,5%. However, not all countries providing data registered an increase in their unemployment rates. Germany (7,7 %t), Belgium (8,2%), the Netherlands (3,2%) and Austria (4,3 %) all saw no change.
- As expected the European Central Bank left its policy interest rate unchanged at 1 percent. The ECB strictly adheres to its inflation target goal of not more than 2 percent. Recent flash harmonized index of consumer price index was down 0.1 percent on the year in June mainly due to base effects of last year's oil price spike.
- In USA, the labor sector continued to contract in June with payroll jobs falling more than expected while the unemployment rate rose just marginally. Nonfarm payroll employment in June declined 467,000, following a fall of 322,000 in May and a decrease of 519,000 in April. The June contraction in jobs was worse than the market forecast for a 350,000 decrease. May and April revisions were up a net 8,000. Payroll losses were widespread. On a year-ago basis, payroll jobs were down 4.1 percent in June, compared to down 3.9 percent the month before. The average workweek slipped to an extremely weak 33.0 hours from 33.1 hours in May.
- June's U.S. payroll data are a disappointment but not jobless claims data which do show weekly and monthly improvement. Initial claims totaled 614,000 in the June 27 week, down 16,000 from the prior week for a 615,250 four-week average that's down nearly 17,000 from May's average.
- May was a good month for U.S. manufacturing as orders jumped 1.2 percent to an adjusted $347.9 billion in the month. New orders for durable goods rose 1.8 percent while orders for non-durable goods, boosted only modestly by higher oil-related prices, rose 0.7 percent.

07/03/2009
The dollar declined by 0,19% versus the dollar. EUR/USD ended at $1,3975. USA celebrated a national holiday - Independence Day, therefore the auctions in the USA have been closed. Activity of players and volumes were on a low level.
Data on retail sales in the Eurozone has supported the dollar. Retail sales fell a larger than expected 0,4% on the month in mid-quarter. The May decline followed a smaller revised 0,1% gain (was 0,2%) in April and left the level of volumes 3,3% lower on the year. Average combined April-May sales were 0,4 percent below their first quarter mean when they dropped 0,9% from the fourth quarter of 2008.

Last week the American dollar added 0,65% versus the European union currency at $1,3975. Euro positions are weak enough. The further decline of pair is possible.

See you:smart:
 
The good trend in EURUSD “relations”...(07/28/2009. EURUSD review)

The previous week demonstrated the good trend in EURUSD “relations”.(y) The new week exhibits the new tendency. Let’s see the EURUSD technical review, that made my colleagues from FBS company.
Technical review.
Short-term forecast. The price is above the levels of 50-, 100- and 200-days SMAs. That is positive for the European single currency, the greenback will continue decrease in short-term future. The bottom border of the upward channel at $1,4210 (chart 1 - black lines) is the nearest support line. The level of SMA 50 at $1,4190 is the second support level than the currency pair can move to $1,4160. $1,4300 is the nearest resistance level. The maximum of June, 3rd at $1,4330 is the purpose for short-term movement. “Slow” RSI is near the overbought level. MACD is in positive area and strong enough for upward movement. Fast curve %К and a slow curve %D look upwards in neutral area. Technical indicators supports EUR/USD growth.
Chart 1. 240 min EURUSD.

Intermediate term forecast.
As well as it was supposed last week the pair has formed an intermediate term lateral narrow trend with the top border at $1,4290 and bottom at $1,4100. EUR/USD moves above the 50-, 100- and 200-days simple averages that supports the euro. The nearest support level is at SMA 50 ($1,4120). The strong support notes at $1,4000 that is 23,6 Fibo of growth $1,2890-$1,4340. MACD is above zero marks. Relative strength index (RSI) is in neutral zone, looks upward. Stochastic oscillator shows upward movement. Chart 2. Daily EURUSD.

Long-term forecast. Last 8 weeks EUR/USD moved within the limits of a lateral trend with a wide range $1,4300-$1,3850. The pair tests SMA 50 at $1,4222 which has been obedient twice in 2009. SMA 50 is the most powerful resistance level in the long-term period. In case of resistance breakdown, EUR/USD will approach to $1,4330, than to $1,4500. Strong support is at $1,4000 (23,6 Fibo of growth $1,2890-$1,4340) and $1,3780 (38,2 Fibo of growth $1,2890-$1,4340). MACD moves in positive area. Stochastic oscillator spoils “good picture” for euro, the curves %K and %D look upwards.
Chart 3. Weekly EURUSD.

Target resistance levels: $1,4300, $1,4330, $1,4430.
Target support levels: $1,4240, $1,4200, $1,4160.
Notes: SMA 50 – brown line; SMA 100 – green line; SMA 200 – orange line.
See you!
 
The uneasy week on currency market

Last week Fed, as a matter of fact, has started to pursue a policy of monetary toughening. In this EURUSD review I will consider the reasons of this decision and its prospects.(y)

Last week euro was up by 0,14% versus the dollar. Last week on the currency market was rather uneasy. At the beginning of the week euro conceded to the American currency. Not so positive macroeconomic data from China which have caused decrease in interest to highly remunerative actives became the main reason for euro deviation. So, industrial output in China in July has increased less than analysts expected. The export volume has fallen by 23%. The level of consumer prices and producer prices has also decreased.
Rates of decrease of wholesale and consumer prices in Germany were accelerated. July CPI was revised to flat on the month from down 0,1 %, with year-over-year CPI down 0,5 %, revised from a decline of 0,6 %. July's harmonized inflation was revised to down 0,1 % month over month from a flash estimate of flat, with the year-over-year rate down 0,7 % (from down 0,6 %). The monthly result was the first negative reading in the measure in 22 years.
The middle of week has brought positive news to euro.
In Germany, second quarter seasonally adjusted GDP rose 0,3 % quarter over quarter, above expectation, and the first gain in the measure since 1Q 2008.
In France, second quarter GDP rose 0,3 % quarter over quarter, above expectation for a small decline, and the first rise in four quarters. Rising consumption and exports boosted output during the quarter. Private consumption grew 0,3 % after a rise of 0,2 % during the first quarter, helped by low inflation, tax breaks and public incentives for new car purchases. Exports rebounded, growing 1,0 % on the quarter after a 7,1 % decline in the first quarter.
European Union 2Q Flash GDP showed a decline of 0,1 % quarter over quarter, better than expected. Other EMU countries that showed positive GDP growth were Portugal and Greece, both up 0,3 %, and Slovakia, up 2,2 %. However, Italy's GDP, estimated last week, fell 0,5 % during the second quarter, while the Netherlands' GDP dropped 0,9 %.
The decision under rates by Fed was the key event of the week. Industrial production in July added to the argument that the recession is over, rebounding primarily on motor vehicle assemblies. Overall industrial production in July jumped by 0,5 %, following a revised 0,4 % decline in June. The July boost came in just under the market expectation for a 0,6 % gain.
Retail sales in USA in July were unexpectedly down and sharply disappointing. Overall retail sales slipped by 0,1 % in June, following a revised 0,8 % boost the month before. The July decline came in well below the consensus forecast for a 0,8 % advance. Excluding motor vehicles, retail sales dropped by 0,6 %, following a revised 0,5 % rise in June. The market had projected a 0,1 % uptick for the latest month. Weakness was led by gasoline sales which declined by 2,1 % in July, following a 6,3 % jump the prior month. Excluding motor vehicles and gasoline, retail sales fell by 0,4 %, following a 0,1 % dip the prior month.
The budget deficit of the USA continues to fly promptly upwards and for July has made $180,7 billion, from the beginning of fiscal year deficiency has made $1,267 bln., threefold above than one year ago.
Nevertheless, on Friday MSCI World has risen to maxima since October of the last year.
FBS analysts consider that in the near future the dollar will strengthen the positions.:cool:
 
The last summer day tecnical review (EURUSD)

08/31/2009. EUR/USD.
Technical review.
Daily chart. The price is above the levels of 50-, 100- and 200-days SMAs. That is rather positive for the European single currency. MACD is in positive area but it is weak enough for upward movement. RSI is at mark 54 (flat movement). “Fast” RSI is (red line) also at flat zone, looks downwards. Stochastic oscillator smoothly decreases, leaving from overbought levels. All it means that in medium term prospect exists possibility of lateral trend, nevertheless, due to situation at 240 min. graph., euro will decrease in short-term prospect. The nearest resistance level is at $1,4340 (maximum of August,24th), than – maximum of 2009 - $1,4450. If the price goes under $1,4250, support will be at $1,4200 (minimum of August, 20th and August, 21th) and than $1,4150 (minimum of August).
Chart 1. Daily EURUSD.

Weekly chart. Two variants are possible: 1. new maximum levels of 2009; 2. downwards correction will start. The main target of upward movement will be $1,4440 which is the strongest resistance. At weekly chart MACD continues to grow in positive area. “Slow” RSI (green line) is at mark 63 in neutral area and grows. Nevertheless, if this indicator reaches overbought area, the pair will move downwards. “Fast”RSI (red line) is near overboughth zone, spoils “bad picture” for euro. Fast curve %К and slow curve %D is at threshold value. According to technical analysis, the greenback will retreated positions versus the euro but indicators moves near overbought areas that will mean change of tendencies at 1-2 weeks forecast. Support level is at $1,4000 – level of 23,6 FIBO of growth from $1,2890 to $1,4340, than the pair will stop at $1,3780, which consist 38,2 FIBO of growth from $1,2890 to $1,4340. Chart 2. Weekly EURUSD.

Target resistance levels: $1,4340, $1,4390, $1,4450.
Target support levels: $1,4250, $1,4200, $1,4150.
Notes: SMA 50 – brown line; SMA 100 – green line; SMA 200 – orange line.
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09/08/2009. Eur/usd.

Technical review.
Daily chart. The price is above the levels of 50-, 100- and 200-days SMA. The currency pair has updated the maximum values of 2009 at 1,4500!!! The bull spirit remains in intermediate term prospect. MACD is in positive area. “Fast” RSI is (red line) in overbought zone at mark 89, correction is possible in the nearest future. “Slow” RSI is at mark 63, specifying in development of upward movement. Stochastic oscillator smoothly rises. Technical indicators points to development of upward trend, however at overbought levels the price will move down. Thus on 4-hour chart, technical indicators have closely stolen up to overbought areas.
The nearest resistance level is at $1,4500 (maximum of 2009), then $1,4400/10 - maximum of August,27th, and then $1,4560 (top border of upward trend). If the price goes under $1,4450, support will be at $$1,4400/10 - maximum of August,27th and then $1,4370 (maximum of August,24th). Chart 1. Daily EURUSD.



Weekly chart. Last week we noticed that the maximum of 2009 at $1,4440 which is powerful resistance can become the purpose of upward movement. Today EUR/USD has done it. At weekly chart MACD continues to grow in positive area. “Slow” RSI (green line) has practically stolen up to overbought area that in general it is positive for euro, however achievement of this zone will mean a turn downwards. “Fast” RSI (red line) in overbought area that can put “bulls” on his guard. Fast curve %К and slow curve %D have closely come nearer to threshold values. According to technical analysis, the greenback will retreated positions versus the euro but indicators moves near overbought areas that will mean change of tendencies at 1-3 weeks forecast. Target resistance level is at $1,4600 – 61,8 FIBO of fall from $1,6020 to $1,2320.
Support level is at $1,4172 – 50 FIBO of growth from $1,2890 to $1,4340, than the pair will stop at $1,4060. Chart 2. Weekly EURUSD.



Target resistance levels: $1,4500, $1,4560, $1,4600.
Target support levels: $1,4450, $1,4400, $1,4060.
Notes: SMA 50 – brown line; SMA 100 – green line; SMA 200 – orange line.

www.fbs.com

P.S. I know that there are problems with reading diagrams. To read them I strongly recommend to use Google Chrome browser.
 
09/15/2009. EUR/USD. Technical review

Daily chart. 10:30 AM.
The price is above the levels of 50-, 100- and 200-days SMA. Yesterday the currency pair has updated the maximum values of 2009 at 1,4650. The bull spirit remains in intermediate term prospect. MACD is in positive area.
“Fast” RSI is (red line) in overbought zone at mark 96, correction is possible in the nearest future. “Slow” RSI is at mark 70, specifying in development of upward movement. Stochastic oscillator rises in overbought area. Technical indicators points to development of upward trend, however at overbought levels the price will move down. Thus on 4-hour chart, technical indicators have closely stolen up to overbought areas.
The nearest resistance level is at $1,4640 (maximum of 2009), then $1,4680 (top border of upward trend). If the price goes under $1,4600, support will be at $1,4520 and then $1,4460 (maximum of August,5th), then $1,4330/40.
Chart 1. Daily EURUSD.


Weekly chart.
Last week we noticed that the maximum of 2009 at $1,4640 which is powerful resistance can become the purpose of upward movement. At weekly chart MACD continues to grow in positive area. “Slow” RSI (green line) has practically stolen up to overbought area that in general is positive for euro; however achievement of extreme levels will mean a correction downwards. “Fast” RSI (red line) in overbought area that can put “bulls” on his guard. Fast curve %К and slow curve %D have closely come nearer to threshold values. According to technical analysis, the greenback will retreated positions versus the euro but indicators moves near overbought areas that will mean change of tendencies at 1-2 weeks forecast. Target resistance level is at $1,4640, then $1,4720 – maximum of December, 18th. Support level is at $1,4280/90 – level of 100-days SMA, then the pair will stop at $1,4000- 23,6 FIBO of growth from $1,2890 to $1,4340.
Chart 2. Weekly EURUSD.


Target resistance levels: $1,4640, $1,4720.
Target support levels: $1,4520, $1,4460, $1,4330.
Notes: SMA 50 – brown line; SMA 100 – green line; SMA 200 – orange line.

See you:cool:
FBS company
 
I got to learn all this, great charting and great to see I'm on the right track with my basic very basic Trend, S&R charting.
 
09/22/2009. Eur/usd

Technical review. :cool:

Daily chart. The price is above the levels of 50-, 100- and 200-days SMAs that is positive for euro. Today the currency pair has updated the maximum values of 2009 at $1,4800. The bull spirit remains in intermediate term prospect. MACD is in positive area. “Fast” RSI (red line) is in overbought zone at mark 83, local correction is possible in the nearest future (1-2 day). “Slow” RSI is at mark 70, specifying in development of upward movement. Stochastic oscillator tends to decline in overbought area. Technical indicators points to development of upward trend, however at overbought levels the pair EUR/USD will move down. Thus on 4-hour chart, technical indicators have closely stolen up to overbought areas.
However at daily chart we can see the formation of “bear divergence”, the situation where MACD indicator suggest trend in a different direction than price action. The pair tests new maximum while MACD doesn’t confirm that. It is a negative signal for euro. The nearest resistance level is at $1,4820, then $1,4860 (maximum of September, 2008). If the price goes under $1,4770, support will be at $1,4740 and then $1,4460 (maximum of August,5th), then $1,4610.
Chart 1. Daily EURUSD.



Weekly chart. The currency pair grows within the limits of the upward trend noted at weekly chart. MACD continues to grow in positive area. “Slow” RSI (green line) has practically stolen up to overbought area that in general is positive for euro; however achievement of extreme levels will mean a local correction. “Fast” RSI (red line) in overbought area (at mark 96) that can put “bulls” on his guard. Fast curve %К and slow curve %D grow in overbought area near to threshold values. The outcome approaches. The nearest resistance level is at $1,4870, then - $1,4920. Support level is at $1,4600 - 61,8 FIBO $1,6020-$1,2330, then the pair will stop at the level of 100-days SMA . Chart 2. Weekly EURUSD.



Notes: SMA 50 - brown line; SMA 100 - green line; SMA 200 - orange line.

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EURUSD. Technical analysis

The Euro yesterday spent the European session correcting and then traded lockstep to the upside with US equities. The pair is currently strongly correlated with equity markets so it is no surprise that it found a bid tone which also carried all through the Asian session as well. However, the pair is facing strong intraday resistance above $1,4700. The first level to watch is $1,4720 and then the next level is $1,4765. Either of these levels could prove to be reversal areas for the pair. A break above $1,4765 will likely see the pair retest $1,4800 and possibly $1,4843. Longer term the pair’s up trending support line (currently observed near $1,4523) is still intact and until that breaks the trend is still to the upside. However, a trade below $1,4445 will re-enforce the bearish scenario. MACD is rising at H4 EUR USD graph that is good for “bulls”. Slow RSI (green line) moves up in neutral area while fast RSI (red line) is oversold – in short-term period the pair will decline. This scenario confirms by stochastic oscillator that is in oversold area too.
Generally speaking the USD is at a critical juncture and if we see a big sell off in equity markets then risk aversion will likely lead to broad dollar strength and vice versa.
Chart 1. H4 EURUSD.





Key support levels: $1,4710; $1,4650; $1,4590.
Key resistance levels: $1,4760; $1,4820; $1,4843.

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EUR/USD. Technical analysis.

The euro yesterday continued its ascent and is currently eyeing the 1.5000 psychological level. Just like with the Dow yesterday hitting 10k it is very likely that this will be hit. Observe price behaviour closely if the pair trades to this level intraday. Intraday support comes in at $1,4920-$1,4900.
According to 4-hour chart, MACD is growing in positive area that is good for euro. “Fast” RSI (red line) is overbought, tends to decline in frame of light correction movement. “Slow” RSI (green line) is overbought too at mark 70. Both lines of stochastic oscillator are overbought at mark 90. Technical indicators points to development of upward trend, however at overbought levels the price will move down. Thus on 1-hour chart, technical indicators like MACD, stochastic, RSI decline from overbought areas.
Strength in equity markets should see a bid tone in the Euro.
Chart 1. H4 EURUSD.

Chart 2. H1 EURUSD.

Notes: 50 SMA – brown line; 100 SMA – green line; 200 SMA – orange line.

:smart:
 
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