Dukascopy Afternoon Forex Overview

Germany’s factory orders unexpectedly slipped in January as overseas demand for machinery and similar investment goods fell. Factory orders lost 2.7% compared to a 1.6% gain in December, said Economy Ministry. Economists questioned by Bloomberg earlier predicted an 0.6% increase. On yearly basis orders have dropped 4.9%. Euro erased morning gains on report.

Republican Mitt Romney, ex-governor of Massachusetts won the primary presidential election in Ohio. Romney gained 38% of votes, followed by former Senator of Pennsylvania Rick Santorum with 37%, Speaker of US house Newt Gingrich with 15% and US Representative Ron Paul with 9% support.

After a rapid drop of 1.9% in previous session, British FTSE 100 index retreated and climbed 0.5% on Wednesday as investors awaited results of a Greek debt swap agreement. Mining sectors recovered from losses with Kazakhmys PLC adding 2.6% and Eurasian Natural Resources Corp gaining 2.3%. Admiral Group PLC jumped 10% on better than expected pre-tax profit for 2011.

Swiss unemployment rate was stable in February for the third month in line, reported the Swiss State Secretariat for Economic Affairs. The jobless rate remained at 3.1% on a seasonally adjusted basis last month, being in compliance with expectations. However, the number of individuals without job increased slightly by 1,163, approaching 133,154.

Japanese Yen kept appreciating versus its main counterparts on Wednesday as weaker Asian stock markets and investor lack of confidence about Greece’s ability to finalize debt swap agreement bolstered demand for safer currency. The Yen strengthened against the Euro to JPY 106.01 in Asian trade and added 0.3% versus US Dollar to JPY 80.67. Currently EUR/JPY is trading at JPY 106.22 and USD/JPY is trading at JPY 80.77.

Daily maximum: 1.3163
Daily minimum: 1.3100
The single European currency slumped further today versus the US dollar as German monthly factory orders fell more than expected (-2.7% act./0.6% est.). Daily Resistance: 1.3191; 1.3391; 1.3947. Daily Support: 1.3069; 1.2990; 1.2725. Daily Bias: Strongly bearish.

Daily maximum: 106.39
Daily minimum: 105.71
The pair continued moving downwards today after touching the daily forecast mean (106.39) as uncertainty over the Greek debt swap persists. Daily Resistance: 107.40; 109.17; 112.29. Daily Support: 105.18; 104.07; 101.58. Daily Bias: Strongly bearish.

Daily maximum: 1.5758
Daily minimum: 1.5698
The Cable traded under a bearish momentum as the pair retail sales rose for the second month in a row in UK. Daily Resistance: 1.5833; 1.5948; 1.6057. Daily Support: 1.5648; 1.5562; 1.5503. Daily Bias: Strongly bearish.

Daily maximum: 80.96
Daily minimum: 80.59
Japan’s yen appreciated today on rumors the Bank of Japan is going to intervene to support local exporters, leaving the 80.98 intact today. Daily Resistance: 81.45; 82.31; 83.19. Daily Support: 80.45; 79.31; 77.55. Daily Bias: Neutral.

Daily maximum: 0.9200
Daily minimum: 0.9159
The pair pierced the daily forecast mean (0.9171) as ADP non-farm payrolls rose more than expected (216K act./204K est.). Daily Resistance: 0.9217; 0.9290; 0.9460. Daily Support: 0.9135; 0.9005; 0.8883. Daily Bias: Bullish.

Greek bond swap prospects lifted by pledges
Major banks and pension funds threw their weight behind Greece’s bond swap offer to private creditors on Wednesday, raising the likelihood that the deal will go through and a 130 billion euro international bailout package would be secured.

Productivity in U.S. Cools as Labor Costs Jump
The productivity of U.S. workers rose at a slower pace in the fourth quarter and labor costs jumped, indicating businesses are reaching the limit of wringing efficiency from their workforce.

RBA Could Cut Rates If Jobs Data Also Disappoint
With Australia’s 2011 fourth quarter GDP growth coming in well below market expectations, analysts tell CNBC there’s increasing pressure on the country’s central bank to cut interest rates if Thursday’s unemployment numbers also disappoint.