Dukascopy Morning Forex Overview

Dukascopy Technical Analysis

EUR/USD

“Unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen”

– Fitch Ratings (based on Bloomberg
The currency pair is closing in 1.3380/60, which is to provide temporary support for the price. After some time it is expected to be pushed through, clearing the way to subsequent levels at 1.3145 and eventually 1.20.

EUR/JPY

“The outlook for the euro is worsening gradually because clearly there’s been contagion in the euro zone debt markets”
– BNY Mellon (based on CNBC)
EUR/JPY has successfully tested 103.40 and now the bearish momentum is gradually gaining strength to drag the price down to 103.08. Should the latter support be breached, then this drop might extend down to 100.77.

GBP/USD

“The euro zone problems are likely to reduce the chances of an early [UK] labour market recover”
– Institute for Employment Studies (based on WSJ)
Since the pair has come below 1.5825, it should then tumble down to 1.5632. Secondary and tertiary targets are located at 1.5272 and 1.5050. Rallies are to be capped by resistances at 1.6060 and 1.6136.

USD/JPY

“Japan has little chance of succeeding in pegging its currency at a certain level because yen trading volumes and the size of its economy are much bigger”
– Reuters
It seems that USD/JPY has based upon a support situated at 76.94 and is not willing to move in any direction. Nevertheless, in the long-term it is expected to commence advancing toward 79.44 and afterwards surge up to 80.44.

USD/CHF

“[US] Retail sales is more than enough to keep the economy going. They continue to push back the recession fears that began this summer”
– TD Securities (based on CNBC
USD/CHF is one of few pairs to have bullish impetus, as it has managed to climb over 0.9157 and is now headed toward 0.9317 and 0.9341/99. From below the pair is well-supported by an uptrend at 0.8962.

Dukascopy Fundamental Analysis

EUR

“We will support his [Monti’s] government very much”
– Emma Marcegaglia, head of employers association at Confindustria

Recently appointed Italian Prime Minister Mario Monti formed a new government on Wednesday to avert collapse of the nation’s economy and win back investors’ confidence. Members of the government are mainly drawn from private sector and academia with Monti to serve as prime minister and economy minister.

USD

“The data is relatively upbeat in the U.S”
– Omar Esiner, a strategist at Commonwealth Foreign Exchange
U.S. consumer prices decreased slightly for the first time in four months in October, giving the Federal Reserve opportunity to ease monetary policy in case the economy falters. The prices dropped 0.1 percent, compared to September, said the Labor Department on Wednesday.

GBP

“The unemployment number ticking up so much is quite dramatic”
– Peter Dixon, an economist at Commerzbank AG

The number of people claiming unemployment benefits rose 5.3 thousand to 1.6 million in October, while the jobless rate increased to 8.3 percent, the highest reading in 15 years, said the Office for National Statistics on Wednesday.

JPY

“Investor optimism is driven by news report”
– Christian Zogg, fund manager at LLB Asset Management

Swiss stocks gained on Wednesday, after Italian Prime Minister Mario Monti formed a new government. The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, rose 0.37%, or 20.89 points, to 5,685.80. The broader Swiss Performance Index advanced 0.26%, or 13.49 points, to 5,160.49.

CHF

“Japan’s economy continues to pick up but at a more moderate pace”
– Bank of Japan

The Bank of Japan downgraded its economic assessment but left monetary policy unchanged on Wednesday, saying the Europe’s debt crisis represents the biggest risk to the country’s export led recovery.

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