Dukascopy Morning Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis

“[Unemployment] is the main source of vulnerability of the Spanish economy”
– Luis de Guindos, Economy Minister
Spain’s unemployment increased to 22.8 per cent in the last three months of 2011 from 21.5 per cent the previous quarter and surpassed five million mark, said the National Statistics Institute on Friday.


“The economy ended 2011 on a fairly positive note”
– Ryan Sweet, a senior economist at Moody’s Analytics
The U.S. gross domestic product rose 2.8 per cent in the last three months of 2011, less then expected, the Bureau of Economic Analysis said on Friday.


“We’re still cautious on the outlook for equities at present”
– Sally Davies, a fund manager at Octopus Investments
U.K. stocks edged lower on Friday as the world’s largest economy grew less than expected and uncertainty remained over a debt-swap agreement between the Greece and private bondholders.

“Market participants are somehow realizing again that the Greek problem is far from over”
– Stephane Ekolo, chief European strategist at Market Securities
The KOF economic barometer, which indicates the expected performance of the Swiss economy over the following six months, declined to -0.17 January from 0.01 in December, th e lowest level since July 2009.

“Consumers are gradually regaining their appetite”
– Yoshimasa Maruyama, chief economist at Itochu Corp.
Japan’s year-on-year retail sales rose 2.5 per cent in December, said the Ministry of Economy, Trade and Industry on Friday, the biggest gain since August 2010.

Dukascopy Technical Analysis

“The easy policy in the U.S. means there is a rush to other currencies, and the euro will lead the charge”
– Faros Trading (based on WSJ)
After encountering a tough resistance at 1.3245/50 the currency pair is expected to fall, though the dip should halt near 1.3070. In case the pair surges above 1.3245/50, bullish momentum may last until 1.3437 is reached.


“If you want to have one currency trade that you put on and close your eyes, shorting the yen is the one to do it”
– Harbor Capital (based on CNBC)
At the moment EUR/JPY is capped by a resistance zone at 102.55/60 and is unlikely to breach this level in the short-term. The initial support is at 101.00/100.75, followed by lines at 98.90 and 97.04.


“Our view is still that this period of dollar weakness we’ve seen this year will prove temporary so we’re not looking for cable to break above back into the $1.60s”
– BTM-UFJ (based on Reuters)
GBP/USD eyes 1.5770/80, although the current bullish impetus is too weak to be able to challenge this resistance level. Therefore the focus is on 1.5659 with an additional support located at 1.5570/45.


“The dollar will rise moderately, and I expect it will hit JPY80 by March”
– Royal Bank of Scotland (based on WSJ)
Despite the fact that 78.25/30 has repelled USD/JPY, the outlook remains positive for the pair. Resistances situated at 76.75 and 76.20 are expected to withstand bearish pressure and help commence recovery of the currency couple.


“The SNB is in a position to print as many Swiss francs as necessary to preserve [the ceiling]”
– George Soros (based on Bloomberg)
USD/CHF is anticipated to maintain its current southwards course toward 0.9080/65. This level should provide sufficient support and will not be breached. Resistances are at 0.9220 and 0.9320.

Press Review

Greek Debt Talks Risk Derailing EU Summit Plan
European Union leaders gather for their first summit of 2012 as a deteriorating economy and struggle to complete a Greek debt writeoff risk sidetracking efforts to stamp out the financial crisis.


Fed: Rates likely to remain near zero through 2014; inflation target set at 2%
The Federal Reserve said Wednesday that unemployment will remain so high over the next three years that the central bank will probably keep interest rates near zero for that period, more than a year longer than previously indicated.

Asia & Pacific

China premier downplays debt woes
China’s government debt is under control and remains at safe levels, Chinese Premier Wen Jiabao said in comments released Monday, even as the National Audit Office highlighted potential risks for financial sectors this year.