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Dukascopy Forex Overview: 18-05-2012 - Afternoon
| Dukascopy Bank analytic desk report Published: 18/05/2012 18:06 | |
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Dukascopy Fundamental Analysis
EUR
Moody's reduced credit rating of 16 Span's banks, citing a rise in bad debts in the country's financial sector and overall deterioration of the economic environment. The decision came after shares of Bankia lost another 14%. The largest banks such as Banco Santander and BBVA were downgraded while ten out of 17 banks were put on negative watch, implying that further credit rating cuts are possible.USD
As the U.S. dollar gets stronger, investors are concerned that aggravating debt crisis in Europe will reduce demand for oil. Therefore, oil shows decline for a third week. Crude oil lost 25 cents yesterday and reached the 6-month low of $92.56. Brent oil for July delivery slid 0.5 percent to finish at $106.99.GBP
Following a downgrade of 16 Spanish banks, FTSE has fallen by 43 points or 0.82% since the opening and is now trading at 5294 points.CHF
The official SNB exchange rate for EUR/CHF is 1.2010 today; yield on 10-year Swiss Confederation bonds decreased to 0.63%. 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 0.89% since the opening bell, and is currently fluctuating around 5820 points.JPY
Hang Seng China Enterprises Index, which includes Hong Kong listed Chinese companies, lost 21% of its value since year high on 29 February. 90% of stocks included in MSCI Asia Pacific Index contracted and index itself lost 2.6% for today and at least 5% for the week. Japan's Nikkei 225 Stock Average and more extensive Topix Index lost around 3% today. Hang Seng Index and China's Shanghai Composite Index retreated at least 1.3% each. |
Dukascopy Technical Analysis
EUR/USD
Daily maximum: 1.2728Daily minimum: 1.2642 EUR/USD rebounded today after the German producers prices rose 0.2% (versus 0.4% estimate). Daily Resistance: 1.2763; 1.2812/30; 1.2931/47. Daily Support: 1.2645/42; 1.2580; 1.2486. Daily Bias: Neutral. GBP/USD
Daily maximum: 1.5836Daily minimum: 1.5733 The British pound continued trading in a bearish trend today, touching the 200-day moving average, as concerns over Greece and Spain intensified. Daily Resistance: 1.5781; 1.5869/5922; 1.5959. Daily Support: 1.5616; 1.5557; 1.5427. Daily Bias: Strongly bearish. USD/JPY
Daily maximum: 79.46Daily minimum: 79.19 USD/JPY recovered from intraday lows after touching Bollinger lower band. Daily Resistance: 79.61; 79.84/80.00; 80.25. Daily Support: 79.19; 78.96/84; 78.67. Daily Bias: Bearish. USD/CHF
Daily maximum: 0.9499Daily minimum: 0.9436 The US dollar advanced further, approaching the 0.9500 level, as worries over Greece continued today and the leave of Greece from the Eurozone was on agenda during the G8 summit. Daily Resistance: 0.9487; 0.9507; 0.9600. Daily Support: 0.9466; 0.9405; 0.9359. Daily Bias: Bullish. |
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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
Spanish Banks’ Bad Loans Worsen As Recession Bites: EconomyMore Spanish loans soured in March, fueling concern that the government’s focus on making banks clean up real estate was too narrow as the country’s economy entered a recession. USA
Fed May Prefer Another Twist To Adding AssetsFederal Reserve policy makers may find another round of Operation Twist is preferable to an outright asset-purchase program should the economy show further signs of weakness or if risks increase. Asia & Pacific
Earthquake hits eastern Japan, no tsunami warning issuedAn earthquake with a preliminary magnitude of 4.8 hit eastern Japan on Friday, shaking buildings in the capital Tokyo. |
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Market Research
Currency Index & Volatility
Throughout the last five trading days (May 11 - May 17) the average value of the Swiss Franc in the market, represented by its respective currency index, proved to be generally unsusceptible to the news and events observed within this report, losing only 0.25% of its worth within the studied period. |
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
Dukascopy Bank presents a new research product - the aggregate technical indicator. The new tool will indicate the strongest signals on major currency pairs. |
Commodity Overview
Precious Metals
Precious metals rallied on Thursday amid hopes for more loosening policies from the Fed after Philadelphia’s manufacturing activity posted a contraction in May.Industrial Metals
Industrial metals advanced on Thursday despite negative economic data from the US and the Euro Zone.Energy
Energy markets tumbled on Thursday along with high risk-aversion among investors in view of the economic and political instability in the Euro Zone. On Thursday, Moody’s downgraded 16 Spain’s banks while Fitch cut Greek credit rating to ‘CCC’.Agriculture
Agricultural commodities rocketed on Thursday amid unfavorable weather conditions in the top-growing regions worldwide. |
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Trade Pattern Idea
AUD/JPY Emerging Pattern: Falling Wedge
AUD/JPY has been decreasing to its five-month low around 78.00 forming a falling wedge pattern. The formation has 73% quality and 46% magnitude within 166 bars. The price was consolidated in a downward channel touching the pattern’s lines many times, but it still is decreasing inside the pattern borders. Present bias on the 4H and daily timeframes is neutral while indicators on weekly timeframe give bearish signals. Bears may focus their attention on the pattern’s 0.8005 level test. If the price rebounds, the initial target for short traders could be around 0.7930, where the pattern’s support level resides. |
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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