Category Archives: Technical Analysis Reports

technical analysis reports

Dukascopy Afternoon Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

Nicolas Sarkozy, France’s President, said that the country may consider withdrawing for Schengen zone unless more efforts are put in stopping illegal immigration. Sarkozy speaking at President’s election rally stressed that the progress has to be made during next 12 months otherwise France will exit Schengen zone. Illegal immigration is expected to be the core issue during elections in France.

USD

Crude oil futures eased down during the Asian session on Monday as traders started to cash out from the market after crude oil moved higher on the positive US labour data. Light, sweet crude oil futures for April delivery traded at 106.92 US Dollars per barrel on the New York Mercantile Exchange, tumbling.

GBP

According to Lloyds Bank Corporate Markets, concern of losing their jobs has been decreasing among Britons for the second month in the row. Job security index gaied 2 points in February, currently standing at -22 points. Bankers believe the labour market has still a long way to go to reach the pre-crisis levels of job security.

CHF

The official SNB exchange rate for EUR/CHF is 1.2057 today; yield on 10-year Swiss Confederation bonds decreased to 0.72%. 3-month LIBOR CHF stands at 0.09%, and is within the target range of 0.00-0.25%. Swiss SMI stock index has lost 0.04% since the opening bell, and is currently fluctuating around 6185 points.

JPY

Japan’s Nikkei Stock Average retreated after gains in previous two sessions as Yen appreciated and China reported a record high trade shortfall in February. Nikkei 225 index edged 0.4% or 39.88 points down to 9,889.86 with eight of ten industries posting losses. Nippon Paper Group led the drop among paper firms on a report which showed the wholesale prices of high-quality paper fell. Panasonic added 0.7% on news it plans to increase its sales of appliances by the end of March 2016.

Dukascopy Technical Analysis
EUR/USD

Daily maximum: 1.3135
Daily minimum: 1.3078
The single currency depreciated today versus the greenback after the Greece completed the biggest sovereign debt restructuring in history. Daily Resistance: 1.3235; 1.3347; 1.3416. Daily Support: 1.3054; 1.2985; 1.2873. Daily Bias: Strongly bearish.

EUR/JPY

Daily maximum: 108.14
Daily minimum: 107.5
EUR/JPY slipped slightly today, breaching the daily pivot point at 108.18. Daily Resistance: 108.66; 109.13; 109.61. Daily Support: 107.71; 107.23; 106.76. Daily Bias: Bearish.

GBP/USD

Daily maximum: 1.5695
Daily minimum: 1.5606
The British pound fell against the US dollar, heading towars a support level at 1.5551. Daily Resistance: 1.5779; 1.5891; 1.5949. Daily Support: 1.5609; 1.5551; 1.5439. Daily Bias: Strongly bearish.

USD/JPY

Daily maximum: 82.43
Daily minimum: 82.11
USD/JPY declined for a second day, after rising sharply by 87 peeps on Friday. Daily Resistance: 82.90; 83.35; 84.07. Daily Support: 81.73; 81.01; 80.56. Daily Bias: Bullish.

USD/CHF

Daily maximum: 0.9218
Daily minimum: 0.9178
USD/CHF Monday slid modestly towards the support level at 0.9106; technical indicators suggest the pair is likely to recover in the short-term. Daily Resistance: 0.9235; 0.9285; 0.9364. Daily Support: 0.9106; 0.9027; 0.8977. Daily Bias: Strongly bullish.

Press Review
Europe

Euro zone ministers to sign off Greek cash, grill Spain
Euro zone finance ministers will sign off on a second bailout for Greece on Monday and shift their focus to Spain, whose government looks set to violate newly agreed EU budget rules by missing its deficit target again this year.

USA

U.S. stock indexes pause after win streak
U.S. stocks were roughly flat Monday following a three-session rise as Europe readied to seal Greece’s rescue package and after China reported a large monthly trade deficit.

Asia & Pacific

Japan Machinery Orders Beat Expectations
Japanese core machinery orders rose more than expected in January from the previous month, a bright sign for economic growth in the first quarter of the year as a pickup in global trade and demand related to disaster reconstruction are beginning to spur growth at home.

Dukascopy Morning Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

“The debt-swap results show that international markets see the prospects the Greek economy has to regain a sustainable fiscal situation”
– Evangelos Venizelos, Greek Finance Minister
Greece pushed through the bond swap offer averting the immediate threat of an uncontrolled default and opening the way for a second rescue package.

USD

“The labor market has found its legs in the last few months, and it looks like there’s enough of a broad base that the momentum can be sustained”
– Julia Coronado, chief economist for North America at BNP Paribas
Employment grew for a third consecutive month in February, a sign the economic recovery is gaining momentum. Employers added 227,000 jobs to their payrolls, the Labor Department said on Friday, while the unemployment remained unchanged at 8.3 per cent.

GBP

“Manufacturing is past the worst that we saw in the second half of 2011, but it’s still in a very difficult situation”
– Howard Archer, chief European economist at IHS Global Insight
U.K. manufacturing output rose less than expected in January, said the Office for National Statistics on Thursday. Factory output gained 0.1 per cent from December, a sign the economy is still facing headwinds.

CHF
“The worst case scenario of a disorderly default has been cast aside, and this is a relief for the market”
– Benoit Peloille, equity-market strategist at Natixis
The Swiss blue-chip index SMI, a measure of the largest and most actively trad ed companies, gained 0.56%, or 34.58 points, to 6,188.51. The broader Swiss Performance Index rose 0.61%, or 34.66 points, to 5,681.28.

JPY
“It’s big that Greece is becoming less of a drag as the global economy rebounds”
– Kazuyuki Terao, chief investment officer of RCM Japan Co
“It’s big that Greece is becoming less of a drag as the global economy rebounds,” said Kazuyuki Terao, chief investment officer of RCM Japan Co.

Dukascopy Technical Analysis
EUR/USD

“We’re getting steady improvement in the U.S. while the European economic situation remains challenging”
– Wells Fargo (based on CNBC)
Being that EUR/USD’s growth will be halted by resistances located at 1.3285/91, 1.3325 and 1.3389, the outlook remains negative. The initial target lies at 1.2974/54, while a long-term goal is at 1.2624.

EUR/JPY

“The worst case scenario of a disorderly [Greek] default has been cast aside, and this is a relief for the market But the long-term solvency question remains”
– Natixis (based on Bloomberg)
Despite a recent failure of EUR/JPY near 108.75, formidable support at 106.37 should manage to contain dips. Afterwards we are likely to observe a recovery of the pair from the latter level. Rally should be able to extend beyond 108.75, up to 109.32/58 (55 week ma).

GBP/USD

“We expect cable to trade in the $1.57-$1.60 band”
– RWC Capital (based on Reuters)
A strong support situated at 1.5876 (200 day ma) is expected to continue to cap the price from above, while the bias of the Cable remains bearish. In the short-term 1.5650/43 is in focus, followed by 1.5581 and 1.5500.

USD/JPY

“The downside risk to U.S. growth is fairly limited from here”
– Russell Investment Group (based on Bloomberg)
As long as a key support at 80.86 is not violated, USD/JPY is likely to carry on advancing. The pair has already overcome 82.23 and should reach 83.80 soon enough. Within a longer time span, 85.53 and 86.80 are expected to be attained.

USD/CHF

“Tuesday’s retail sales could revive more QE3 talk, especially if the data is weaker than expected”
– WSJ
USD/CHF currency couple is currently gaining bullish momentum, as it is being supported by strong levels at 0.9088/66 and 0.8931. The initial target lies at 0.9246 (55 day ma), which guards 0.9317.

Press Review
Europe

Greece Now Has ‘New Starting Point’: Greek FinMin
After its second bailout was secured on Friday, Greece has been given a “new starting point” to try and restore its struggling economy to health, Greek Finance Minister Evangelos Venizelos told CNBC.

USA

Shares pause after U.S. jobs, monetary policy in focus
Asian shares fell on Monday as investors paused to assess the effect of strong U.S. jobs data, which scaled back expectations of more easing ahead of this week’s Federal Reserve meeting, while uncertainty over Chinese growth also weighed on sentiment.

Asia & Pacific

China reports large trade deficit as imports surge
China posted its largest trade deficit in at least a decade in February after imports of commodities jumped as companies built up supplies.

Dukascopy Afternoon Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

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.

USD

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.

GBP

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.

CHF

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.

JPY

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.

Dukascopy Technical Analysis
EUR/USD

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.

EUR/JPY

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.

GBP/USD

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.

USD/JPY

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.

USD/CHF

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.

Press Review
Europe

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.

USA

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.

Asia & Pacific

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.

Dukascopy Morning Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

“With the dramatic expansion of its balance sheet since last summer, the ECB has become the most active central bank in the world”
– Klaus Baader, chief euro-area economist at Societe Generale
The European Central Bank’s balance sheet rose to a record 3.02 trillion euros for the week ended March 2, after a second long term refinancing operation conducted by the Frankfurt-based ECB.

USD

“The market has more questions than answers right now”
– Alan Gayle, a senior strategist at RidgeWorth Capital Management
The Standard & Poor’s 500 plummeted by 1.54%, or 20.97 points, to 1,343.36. The Dow Jones Industrial Average lost 1.57%, or 203.66 points, to 12,759.15. The Nasdaq Composite Index slid by 1.36%, or 40.16 points, to 2,910.32.

GBP

“It is hard to be optimistic about the house-price outlook”
– Ed Stansfield, a property economist at Capital Economics Ltd.
U.K. house prices edged lower in February, said the Lloyds Banking Group Plc Halifax mortgage-lending unit on Tuesday. Prices fell 0.5 per cent to an average of 160,118 pounds.

CHF
“Even though the Greek problem is pretty much taken care of, it’s a never-ending story”
– John Plassard, director at Louis Capital Markets SA
Swiss stocks plunged on Tuesday to a one-month low after a report showed the euro area economy contracted 0.3 per cent in the fourth quarter.

JPY
“Stock markets are following currency movements because there are no big catalysts to be found”
– Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co.
Japanese stocks closed lower for a second day on Tuesday after the yen strengthened.

Dukascopy Technical Analysis
EUR/USD

“Euro-dollar goes back to $1.26 by the middle of April”
– Rochford Capital (based on Bloomberg)
EUR/USD is gaining bearish momentum. After penetrating 1.3096 the currency pair is expected to dip down to 1.2974/54 with the possibility to extend the move to 1.2624. Rallies are to be capped by resistances at 1.3242/50 and 1.3322.

EUR/JPY

“Forecasts that over two-thirds of bond-holders will participate in the bond swap have improved sentiment and led some to buy back the euro”
– Brown Brothers Harriman (based on WSJ)
EUR/JPY has plunged down to 105.58, from which the pair may rebound, though the rally should by tepid. Below 105.58 the currency couple is likely to target 103.86, while a key level is situated at 102.21/101.79.

GBP/USD

“Cable’s attempts to rise above the $1.60 level have failed and we could it see drift lower”
– FXPro (Reuters)
Being that a previous support line located at 1.5765 did not manage to withstand bearish pressure, 1.5650/43 has now come into play. Resistances may be found at 1.5886 (200 day ma) and 1.6000.

USD/JPY

“The market is in a risk-off environment, so the yen is more likely to be bought. It’s quite possible that the yen will strengthen beyond 80 per dollar”
– Sumitomo Mitsui Banking Corp. (based on Bloomberg)
Even though USD/JPY was unable to consolidate above 81.49/63, the long-term bias remains bullish for the pair. Once this level is overcome, we might observe a rally up to 82.23. Supports are at 80.42/50 and 80.00/79.95.

USD/CHF

“If the Greek debt swap goes well and the U.S. job data points to continued recovery, then the market could return to the risk-on mood”
– CNBC
The US Dollar is expected to continue appreciating relative to the Swiss Franc. The initial target lies at 0.9257 (55 day ma), while subsequent goals are located at 0.9317 and 0.9595. Losses of the pair should be contained by supports at 0.9088 and 0.9075/23.

Press Review
Europe

UK consumer spending rises for second month running
UK consumer spending edged up for the second month running in February, according to new figures fanning hopes that the economy enjoyed a modest bounce at the start of the year.

USA

Obama offers mortgage relief to millions of homeowners
President Barack Obama announced on Tuesday a cut in fees on many government-backed mortgages that he said could help millions of homeowners refinance, part of an election-year push to boost the shaky U.S. housing market.

Asia & Pacific

China Lambastes US Trade Bill, Won’t Adjust Yuan
A U.S. trade bill targeting Chinese imports goes against international rules and Beijing will not adjust the value of its currency to try to bridge a trade deficit that is Washington’s problem to fix, China’s commerce minister said on Wednesday.

Dukascopy Afternoon Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

European economy declined in the 4th quarter of 2011 as investment fell most since 2009 amid dropping consumer spending and exports. GDP both in Euro Zone and EU 27 area fell 0.3% compared to 3rd quarter said EU statistics office on Tuesday. Exports contracted 0.4% compared to a 1.4% gain in the 3rd quarter. Investment faded 0.7% and household spending diminished 0.4%.

USD

Several US leading banks attempt to persuade Fed to restrict the amount of information it discloses to public when it reports the outcome of recent stress tests. Federal Reserve is preparing to disclose more details than it did in 2009. The Clearing House Association said in a letter to Fed that unveiling extra information may have a negative effect on financial institutions involved in stress tests.

GBP

UK retail sales dropped in February for a second straight month as a decline in clothing buying offset the gains from food purchases, reported British Retail Consortium. Sales at stores that are operating at least one year fell 0.3% on annual basis. Same magnitude decline also took place in January. Although BoE expects slowing inflation to bolster consumption, the surge in unemployment and oil prices could curb the spending, suggest analysts.

CHF

The official SNB exchange rate for EUR/CHF is 1.2059 today; yield on 10-year Swiss Confederation bonds decreased to 0.69%. 3-month LIBOR CHF stands at 0.09%, and is within the target range of 0.00-0.25%. Swiss SMI stock index has lost 1.30% since the opening bell, and is currently fluctuating around 6075 points.

JPY

Japan’s Nikkei Stock Average prolonged losses on Tuesday as Yen appreciated and China announced its strategy to shift away from exports, pressing down on Japanese shipping firms and machinery providers. Nikkei 225 index slipped 0.56% or 54.44 points and ended at 9,644.15. Oil and metal shares provided substantial downward contribution with JX Holdings Inc dropping 1.2% and Inpex Corp giving up 0.9%. Kobe Steel Ltd tumbled 3.8% after rejecting dividend pay-out. Another steel producer JFE Holdings fell 3.1%.

Dukascopy Technical Analysis
EUR/USD

Daily maximum: 1.3225
Daily minimum: 1.3113
The euro slightly advanced today versus the greenback as Greece moved one step closer to receive the second bailout. Daily Resistance: 1.3252; 1.3567; 1.3947. Daily Support: 1.3171; 1.3083; 1.2725. Daily Bias: Strongly bearish.

EUR/JPY

Daily maximum: 107.86
Daily minimum: 106.13
The Japan’s yen strengthened today against the shared European currency as annual average cash earnings in Japan exceeded analysts’ estimates (0.0% act./-0.3% est.). Daily Resistance: 108.23; 109.17; 112.29. Daily Support: 107.12; 106.62; 101.58. Daily Bias: Bullish.

GBP/USD

Daily maximum: 1.5881
Daily minimum: 1.5756
The British pound-Dollar hit the market participants’ daily target (1.5847) on less-than-expected monthly Halifax HPI data (-0.5% act./0.3% est.). Daily Resistance: 1.5899; 1.6066; 1.6159. Daily Support: 1.5805; 1.5755; 1.5397. Daily Bias: Neutral.

USD/JPY

Daily maximum: 81.56
Daily minimum: 80.78
The Japanese yen continued appreciating today versus the American dollar, piercing the daily forecast mean (81.52) on improved average cash earnings in Japan. Daily Resistance: 81.88; 83.02; 85.25. Daily Support: 81.17; 80.46; 77.51. Daily Bias: Strongly bullish.

USD/CHF

Daily maximum: 0.9193
Daily minimum: 0.9115
USD/CHF resumed its recovery today as investors perceive stabiliziation of Europe’s macroeconomic conditions. Daily Resistance: 0.9154; 0.9219; 0.9252. Daily Support: 0.9097; 0.9005; 0.8883. Daily Bias: Strongly bullish.

Press Review
Europe

Halifax: a repeat rate offender
Halifax is already a convicted sinner as far as customers of its standard variable rate mortgages are concerned. When the lender said last week it would raise the cap on its SVR to 4.25%, it shocked some customers, but for many it was more of the same scandalous rate manipulation of old.

USA

Obama, Netanyahu give no sign of narrowing gap on Iran
President Barack Obama appealed to Benjamin Netanyahu on Monday to give sanctions time to curb Iran’s nuclear ambitions, but the Israeli prime minister offered no sign of backing away from possible military action, saying his country must be the “master of its fate”.

Asia & Pacific

Australia Holds Key Rate as EU Crisis Lingers
Australia’s central bank reiterated it has scope to cut interest rates as Europe remains a potential source of shocks “for some time yet,” sending the nation’s currency to the lowest level in 1 1/2 weeks.

Dukascopy Morning Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

“At this stage, our best estimate is that the region’s GDP will have contracted by 0.1 percent in the first three months of the year”
– Chris Williamson, chief economist at survey compiler Markit
The euro zone retail sector expanded in January, compared to the previous month. Retail sales rose 0.3 per cent, after declining 0.5 per cent in December, announced the European statistical agency (Eurostat) on Monday.

USD

“The momentum that we’ve been generating in the economy is starting to broaden”
– Robert Dye, chief economist at Comerica Inc.
U.S. service sector expanded in February at a fastest pace in a year. The purchasing managers’ index (PMI) advanced to 57.3 from 56.8 in January, said the Institute for Supply Management on Monday. Reading above 50.0 indicates industry expansion.

GBP

“Despite seeing some loss of momentum in February, the service sector continued to grow at a robust pace, adding to signs that a double-dip recession will be avoided”
– Chris Williamson, chief economist at Markit
U.K. service sector expanded in February at slower pace, compared to January. The Markit/Cips services purchasing managers’ index (PMI) fell to 53.8 from 56.0 in January, said the Markit research agency on Monday. Reading above 50.0 indicates industry expansion.

CHF
“Even though the Greek problem is pretty much taken care of, it’s a never-ending story”
– John Plassard, director at Louis Capital Markets SA
Swiss retail sal es rose 4.4 per cent in January from the same period last year, said the Federal Statistical Office on Monday.

JPY
“Japanese stocks have had a strong rally and technical indicators suggest some overheating”
– Yumi Nishimura, analyst at Daiwa Securities Group Inc.
Japanese stocks ended Monday’s session lower as a strengthening yen dimmed the outlook for exporters.

Dukascopy Technical Analysis
EUR/USD

“Having topped up at around $1.35, the euro is likely to drift lower with the new range likely to be at $1.25-1.30”
– Standard Bank (based on CNBC)
Even though an uptrend support at 1.3168 has managed to underpin the pair, rallies are unlikely to extend above 1.3322. Bearish outlook persists, pushing EUR/USD down to 1.2974/54 en route to 1.2624.

EUR/JPY

“Buying the euro makes no sense”
– FX Prime Corp. (based on Bloomberg)
For now EUR/JPY gravitates to 106.85 (200 day ma) and is expected to trade flat. Additional support levels are situated at 106.02 and 105.72 and should contain possible dips. Resistances may by found at 108.75 and 109.38/58.

GBP/USD

“If we get a whole quarter with [UK] PMI around 54 then we can write off the risk of recession”
– Danske Bank (Reuters)
After bouncing off a formidable resistance line at 1.6000 the Cable is now headed southwards. The initial target lies at 1.5765, followed by 1.5650/43. The long-term outlook is thus negative.

USD/JPY

“The path of least resistance is upward for dollar yen”
– FX Solutions (based on CNBC)
USD/JPY is currently struggling at 81.49/63, though it is unlikely to drop lower as long as a support at 80.57/22 is not violated. In the long run we are likely to observe further rally of the currency pair up to 83.80.

USD/CHF

“[Should Greece’s deal falter], we might see a more pronounced negative reaction in stocks and a rally in the dollar”
– RBC Capital Markets (based on WSJ)
Bullish momentum USD/CHF did not weaken, increasing the likelihood of additional gains for the currency couple in the nearest future. The first target is 0.9259 (55 day ma), while the subsequent levels are at 0.9304 and 0.9340.

Press Review
Europe

Halifax: a repeat rate offender
Halifax is already a convicted sinner as far as customers of its standard variable rate mortgages are concerned. When the lender said last week it would raise the cap on its SVR to 4.25%, it shocked some customers, but for many it was more of the same scandalous rate manipulation of old.

USA

Obama, Netanyahu give no sign of narrowing gap on Iran
President Barack Obama appealed to Benjamin Netanyahu on Monday to give sanctions time to curb Iran’s nuclear ambitions, but the Israeli prime minister offered no sign of backing away from possible military action, saying his country must be the “master of its fate.”

Asia & Pacific

Australia Holds Key Rate as EU Crisis Lingers
Australia’s central bank reiterated it has scope to cut interest rates as Europe remains a potential source of shocks “for some time yet,” sending the nation’s currency to the lowest level in 1 1/2 weeks.

Dukascopy Afternoon Forex Overview

Dukascopy Bank SA

Dukascopy Fundamental Analysis
EUR

Moody’s has downgraded Greek credit rating again from “Ca” to the lowest level of “C”. The rating agency cited high risk of country’s default even despite deal with its bondholders on almost 70% debt write-off. The deal will allow Greece not to return about 107 billion Euros to the private investors. Moody’s stressed that planned reforms to avoid default are likely to face essential implementation risks.

USD

American International Group (AIG), which obtained USD 182.3 billion rescue package after the breakdown of Lehman Brothers, is preparing to sell USD 6 billion of AIA group stocks to repay debt to US government. Insurer is offering around 1.7 billion AIA equities at HKD 27.15 to HKD 27.50 per share. After the sale AIG will keep about 19% stake of AIA.

GBP

British service sector declined in February though the index above 50 showed the economy is expanding. The service Purchasing Managers’ Index (PMI) dropped from 56.0 in the first month of the year to 53.8 in February. Nevertheless the service company confidence reached one-year record high amid growing employment across the sector.

CHF

The official SNB exchange rate for EUR/CHF is 1.2060 today; yield on 10-year Swiss Confederation bonds decreased to 0.68%. 3-month LIBOR CHF stands at 0.09%, and is within the target range of 0.00-0.25%. Swiss SMI stock index has gained 0.06% since the opening bell, and is currently fluctuating around 6153 points.

JPY

Japan’s Nikkei Stock Average lost ground on Monday as China lowered its economic growth goal and left target inflation rate unchanged at 4%. Nikkei 225 index lost 0.8% or 78.44 points and finished at 9,698.59 with energy and technology stocks tumbling most. Sony Corp fell 3.3% and Panasonic Corp slipped 2.2%. Olympus plunged 3.2% on rumours about new executive arrests. Inpex Corp gave up 2.1% anticipating the Friday decline in oil prices. Fast Retailing added 1.4% after reporting a 1.4% increase in February sales.

Dukascopy Technical Analysis
EUR/USD

Daily maximum: 1.3236
Daily minimum: 1.3160
The single European currency reversed today versus the American dollar and broke through the daily forecast mean (1.3226) as monthly retail sales in Europe improved (0.3% act./0.0% est.). Daily Resistance: 1.3290; 1.3386; 1.3547. Daily Support: 1.3144; 1.3083; 1.3036. Daily Bias: Strongly bearish.

EUR/JPY

Daily maximum: 108.00
Daily minimum: 106.92
EUR/JPY slipped lower today on disappointing services PMI (48.8 act./49.5 est.) and sentix investor confidence (-8.2 act./-5.4 est.), breaching the daily forecast mean at 107.97. Daily Resistance: 108.41; 109.17; 112.29. Daily Support: 107.53; 106.62; 101.58. Daily Bias: Neutral.

GBP/USD

Daily maximum: 1.5872
Daily minimum: 1.5786
The Cable commited a decline after touching the market participants’ daily target (1.5861) today as UK servicess PMI declined more than forecast (53.8 act./55.0 est.). Daily Resistance: 1.5924; 1.6066; 1.6159. Daily Support: 1.5873; 1.5755; 1.5397. Daily Bias: Neutral.

USD/JPY

Daily maximum: 81.78
Daily minimum: 81.15
The Japanese yen depreciated versus the US dollar, piercing the daily forecast mean (81.63) on strong ISM non-manufacturing PMI (57.3 act./56.1 est.). Daily Resistance: 82.07; 83.02; 85.25. Daily Support: 81.29; 80.46; 75.51. Daily Bias: Bullish.

USD/CHF

Daily maximum: 0.9161
Daily minimum: 0.9110
USD/CHF moderately moved upwards today on more-than expected US PMI data, crossing the daily target at 0.9110. Daily Resistance: 0.9176; 0.9290; 0.9493. Daily Support: 0.9073; 0.8863; 0.8531. Daily Bias: Bullish.

Press Review
Europe

European Services Output Declines More Than Initially Estimated: Economy
Euro-area services output shrank more than estimated in February, led by Italy and Spain, as the region’s economy struggled to rebound from a contraction in the fourth quarter.

USA

January factory orders fall most in over a year
New orders for factory goods dropped in January by the most in over a year and businesses cut orders for new capital goods, suggesting one of the drivers of the economic recovery faltered at the start of the year.

Asia & Pacific

China Sets 2012 Growth Target at 7.5%, Stability Key
China aims to grow its economy by 7.5 percent in 2012 by following proactive fiscal and prudent monetary policies to combat downward pressure on growth and still high inflation, Premier Wen Jiabao said on Monday.

Dukascopy Morning Forex Overview

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Dukascopy Fundamental Analysis
EUR

“It [signed fiscal compact] helps prevent a repetition of the sovereign debt crisis”
– Herman Van Rompuy, President of the European Council
All but two of the European Union leaders Friday signed a treaty to adopt strict new rules on national deficits and debts. Only Britain and the Czech Republic did not sign the agreement.

USD

“There’s a lot of room to go in the stock market”
– John Carey, a Boston-based money manager at Pioneer Investments
The Standard & Poor’s 500 lost 0.32%, or 4.46 points, to 1,369.63. The Dow Jones Industrial Average slid 0.02%, by 2.73 points, to 12,977.57. The Nasdaq Composite Index dipped by 0.43%, or 12.78 points, to 2,976.19.

GBP

“The improved performance of the construction sector adds to other positive data released on the UK economy”
– Sarah Bingham, economist at Markit
The Markit/CIPS purchasing managers’ index for construction jumped to 54.3 in February, the highest since last March, from 51.4 in January, said the Markit research agency on Friday.

CHF
“Dampening sentiment is a report that shows that banks continue to park large amounts of cash with the ECB”
– Chris Beauchamp, a market analyst at IG Index
Swiss stocks gained on Friday despite the fact that the European Central Bank overnight deposits soared after the bank allotted 529.5 billion euros in long -term refinancing operation.

JPY
“The U.S. economy overall is headed for a mild recovery, and that’s supporting stocks”
– Kiyoshi Ishigane, a strategist at Mitsubishi UFJ Asset Management Co.
Japanese household spending fell 2.3 per cent in January from the same period last year and unemployment rose by 0.1 per cent to 4.6 per cent, showed the government data on Friday.

Dukascopy Technical Analysis
EUR/USD

“We see further U.S. dollar strength versus the euro, yen and sterling”
– Barclays Capital (based on Reuters)
This week EUR/USD currency couple is expected to seek for lower levels. At the moment the pair is approaching an uptrend at 1.3156, which guards 1.3072 (55 day ma). From above EUR/USD is capped by 1.3322 and 1.3389.

EUR/JPY

“The debt crisis is by no means over given the negative growth/budget deficit dynamics in play, but the LTROs appear to have bought the euro zone some time”
– Brown Brothers Harriman & Co. (based on WSJ)
Being that a resistance at 108.75 proved to be impenetrable for EUR/JPY for now, the pair is likely to sell off to 106.90 (200 day ma). Additional support is provided by 106.78 and 106.02. Despite this temporary weakness, EUR/JPY is bullish in the long-term until it reaches 111.57.

GBP/USD

“Sterling is expected to feel the effects of a broader scaling back of global investor optimism. Hence, we maintain our sterling/dollar bearish strategy”
– Morgan Stanley (Reuters)
Since the Cable has already pierced through 1.5893 (200 day ma), it may extend its losses to 1.5802. In case the latter level is breached, the pair should target 1.5751 next. Resistances situated at 1.5893 and 1.6000 should contain intraday rallies.

USD/JPY

“If the jobs data comes in strong, we could see the dollar rise another 1.5 yen or so”
– Mizuho Corporate Bank (based on CNBC)
USD/JPY is expected to struggle at 81.49/63 today and then resume advancing toward 82.23 en route to 83.80, which is a long-term goal. Dips should be limited by supports at 80.42 and 80.00.

USD/CHF

“It does seem that risk appetite is not as strong as it was one month ago”
– Standard Chartered Plc (based on Bloomberg)
Current bullish momentum which was confirmed by a breach of 0.9066/88 is likely to persist until 0.9263 is attained, though USD/CHF will have to overcome 0.9150 and 0.9203 first. In the longer term the pair is targeting 0.9595.

Press Review
Europe

Greece Debt-Swap Deadline This Week to Show If Europe Moving Past Crisis
The European Union faces a first test in its attempt to turn the page on the two-year debt crisis when Greece’s private creditors decide this week whether to sign off on the biggest sovereign-debt restructuring in history.

USA

U.S. risks persist, China in good stead so far: IMF
A renewed drop in housing prices could thwart the U.S. economic recovery in the short term while Washington’s lack of a “credible, comprehensive” fiscal plan poses a major medium-term risk, a top IMF official said.

Asia & Pacific

China cuts growth target to 7.5% in 2012
China expects economic growth of 7.5% this year as it looks for more sustainable expansion, prepares for a change in leadership and rides out a global slowdown.