Dukascopy Fundamental Analysis
EUR
“The government has made clear that the European debt crisis can’t be solved in one fell swoop overnight”
– Angela Merkel, German Chancellor
German Chancellor Angela Merkel said in a speech to parliament Friday that European sovereign debt crisis cannot be solved in one step and once again rejected joint euro bonds idea, urging instead a tighter fiscal union.
USD
“The economy is continuing to head in the right direction”
– Millan Mulraine, senior macro strategist at TD Securities
The unemployment rate declined to 8.6 percent in November from 9 percent in October, said the Bureau of Labor Statistics on Friday. Economists expected the reading to remain at 9 percent.
GBP
“The rise in activity within the housing sector is particularly progressive”
– David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply
CHF
“The numbers were good and there is optimism about the U.S. recovery”
– John Plassard, director at Louis Capital Markets
JPY
“The U.S. economy isn’t as weak as investors feared”
– Kenji Sekiguchi, general manager at Mitsubishi UFJ Asset Management Co
EUR/USD
“An increase to 1.30 francs [per Euro] is likely to follow in the coming month”
– UBS AG (based on Bloomberg)
EUR/USD is expected to extend its current rally up to a resistance located at 1.3608/15, in extreme case the price might rise up to an area of 1.3835/60. Major support is situated at 1.3210, which guards 1.3145.
EUR/JPY
“Resolving the sovereign debt crisis is a process, and this process will take years”
– Angela Merkel (based on Reuters)
The bullish momentum of the pair is vanishing and is likely to fade completely as soon as the currency pair reaches a resistance at 106.00/80. The initial support is at 102.70/48, followed by subsequent levels at 102.44 and 101.95.
GBP/USD
“While looking stronger overall, the U.S. economy is sending mixed signals”
– WSJ
Resistance at 1.5743, being 55 day ma, has managed to halt upward movement of GBP/USD. Nevertheless, the currency couple is likely to recommence advancing in the near-term. The initial target is set at 1.5883/88, while the secondary is at 1.5956.
USD/JPY
“We’re more on a moderate growth path, not the death spiral people feared two months ago”
– Commonfund (based on Bloomberg)
While being supported by a tough u ptrend USD/JPY is anticipated to carry on climbing up after bouncing off 77.17/05. The pair is currently headed toward 79.36, although it must first encounter and overcome resistances at 78.27, 78.56 and 79.10.
USD/CHF
“The economy is continuing to head in the right direction”
– TD Securities (based on Bloomberg)
After a strong resistance at 0.9341/99 has repelled the attack of the currency pair, the outlook is temporary negative for USD/CHF. Nonetheless, dips should be limited by supports located at 0.9040, 0.9015 and 0.8950.
Europe
Sarkozy and Merkel kick off week of euro crisis talks
French President Nicolas Sarkozy and German Chancellor Angela Merkel are to meet to agree on joint proposals aimed at resolving the eurozone debt crisis.
Asia & Pacific
China slowdown spreading, HSBC services PMI shows
China’s services sector cooled in November to its weakest growth in three months, an HSBC purchasing managers’ index showed on Monday, the latest data portraying an economy slowing quickly and in need of policy support.