Dukascopy Fundamental Analysis
EUR
“This [bond] auction is nothing short of a disaster for Germany”
– Mark Grant, a managing director at Southwest Securities Inc.
A German sale of the 10 year bonds on Wednesday drew some of the weakest demand since the creation of the European monetary union as the country didn’t get bids for 35 percent of the government securities. “This auction is nothing short of a disaster for Germany,” Mark Grant, a managing director at Southwest Securities Inc. said.
USD
“The mortgage market remains subdued”
– David Dooks, BBA statistics director
The number of Americans claiming for unemployment benefits rose to 393 thousand last week from 391 thousand the week before, said the Department of Labor on Wednesday. Economists expected the reading to decline to 389 thousand.
GBP
“We’re witnessing political polarization spooking markets”
– Henrik Henriksen, chief investment strategist at PFA Pension fund
Swiss stocks edged lower for a fifth consecutive day on Wednesday after Germany failed to get bids for 35 percent of the 10-year government bonds and Markit report showed Chinese manufacturing sector may contract in November.
CHF
“We’re witnessing political polarization spooking markets”
– Henrik H enriksen, chief investment strategist at PFA Pension fund
Swiss stocks edged lower for a fifth consecutive day on Wednesday after Germany failed to get bids for 35 percent of the 10-year government bonds and Markit report showed Chinese manufacturing sector may contract in November.
JPY
“Investors are a bit fed up with politicians generally”
– Prasad Patkar, portfolio manager at Platypus Asset Management Ltd.
Japan’s Statistics Bureau is to announce month on month change in inf lation on Friday. Economists expect the price index to decline 0.1% in October from September
Dukascopy Technical Analysis
EUR/USD
“The euro is entering its last days as we currently know it”
– Credit Suisse (based on Reuters)
While rallies are limited by resistance levels at 1.3526 and 1.3835/80 the currency pair shows further weakness after piercing through 1.3360/80 support. EUR/USD is thus expected to slide down 1.3281 within a short-term, while 1.20 remains a s the long-term target.
EUR/JPY
“If German bond yields keep rising, that could even be a trigger for break-up of the euro”
– SMBC Nikko Securities (based on Reuters)
Neither bullish nor bearish momentum is likely to appear on EUR/JPY chart for some time, as resistance at 106.80 and support at 103.08 should halt any movements of the price. Therefore EUR/JPY is anticipated to base upon 103.08 and continue trading sideways.
GBP/USD
“We expect the Bank of England to increase its asset-purchase target by 50 billion pounds in January 2012”
– Danske Bank A/S (based on Bloomberg)
The cable carries on declining and aims for 1.5463 at the moment. As soon as the latter level is breached, consecutive supports at 1.5272 and 1.5050 may fall victims to the bearish impetus within a longer time period.
USD/JPY
“Japan may be close to a downgrade”
– Standard and Poor’s (based on Bloomberg)
The American Dollar is expected to commence appreciating relative to the Japanese Yen soon thus driving USD/JPY price towards key resistance levels at 79.56 and 80.37 which must be overcome in order to confirm further advancement.
USD/CHF
“We’re witnessing political polarization spooking markets”
– PFA Pension fund (based on Bloomberg)
As long as the pair floats above a key support at 0.9094 and a strong area situated at 0.8555/50 the outlook will be positive. In the meantime the initial target for USD/CHF is 0 .9317 while it is en route to 0.9341/99.
Expert Commentary
As the Eurozone countries are still struggling with the debt crisis, Dukascopy is persisting to interview the experts in finance to learn information from the inside. Today we talked to Jose Garcia-Montalvo, Professor of Economics at the University Pompeu Fabra, Spain, who shared his opinion on the recent news from Spain. Spain still has the highest unemployment rate of 25% in the EU and the newly elected government has promised to rectify the problem.
What To Read Today
Europe
Euro on ‘Death Watch’ After Investors Spurn German Bonds
Investors began to fear the worst for the euro after unusually weak demand at an auction for bonds from Germany, the region’s largest economy. One analyst went so far as to put the currency on a “death watch.”
USA
Mixed data sparks doubts on economic momentum
U.S. consumer spending growth slowed in October and business capital investment plans were weak, raising questions about expectations for solid economic performance in the fourth quarter.
Asia & Pacific
China Signals Growth Concern in Credit Boost
China widened efforts to support cash-strapped companies in Zhejiang and rural areas hit by a credit squeeze that’s slowing the second-largest economy just as Europe’s debt crisis sap s export demand.