Dukascopy Morning Forex Overview

Dukascopy Fundamental Analysis

EUR

Spanish cost of borrowing hit 6.974% in November as compared to 5.433% in October. High unemployment and low growth rate undermined investors’ confidence in country’s ability to repay its debts. Continued worries about spreading Eurozone’s debt crisis also impacted other economies. French short-term yields rose as well.

USD

US Labor Department today reported a decrease in jobless claims by 5,000 to 388,000 in the last week being seven-month low. Retail sales in US increased more than expected thus stimulating output. More output creates more demand for new employees. Decrease in layoffs might be a sign of US labor market recovery after severe downturn, said Omair Sharif, an economist at RBS Securities Inc.

GBP

The Office for National Statistics reported increase in UK retail sales by 0.6% contradicting to analysts’ forecast of sales decline. Sales volumes grew by 5.3% in small shops being seven- year high increase. Analysts claim that increase was mainly due to higher demand in pre-Christmas time and aggressive price promotions.

JPY

President of Olympus Corp. Shuichi Takayama claims that the company has enough resources to remain in business amid speculations to hide investment losses. Olympic shares have been rising for the fourth consecutive day, and specialists believe the risk of delisting is decreasing.

CHF

Official SNB exchange rate for EUR/CHF is at CHF 1.2395 today; 3-month LIBOR CHF remains at 0.05% (within target range of 0.00-0.25). Yields for 10-year Swiss Confederation bonds declined to 0.89% today. SMI stock index has lost 0.69% since opening bell, and is currently fluctuating around 5647 points.

Dukascopy Technical Analysis

EUR/USD

Daily maximum: 1.3534

Daily minimum: 1.3423

The Euro-Dollar pair moved lower today as the American economy showed signs of growth: unemployment claims declined to 388K versus expected 396K and buildings permits rose to 0.65, more than the 0.60M estimate.

Resistance 1 at 1.3523 has been breached, clearing the way to last two resistances at 1.3607 and 1.3742; all support (1.3388; 1.3337; 1.3202) levels remained intact. The market stance remains strongly bearish for Thursday.

EUR/JPY

Daily maximum: 104.13

Daily minimum: 103.40

The common European currency inched lower today versus the Japanese Yen and pierced the market mean at 103.81 as worries over the EU debt crisis caused investors to seek for safe-havens.

None of the resistance (104.17; 104.76; 105.74) and support (103.19; 102.81; 101.83) levels has been tested yet. The daily market stance remains strongly bearish.

GBP/USD

Daily maximum: 1.5801

Daily minimum: 1.5692

The UK economy shows no signs of recovery therefore making investors selling the British currency versus the American dollar, crossing the market mean at 1.5753.

While none of the support (1.5661; 1.5617; 1.5497) levels has been breached, resistance 1 at 1.5782 got hit, exposing the last two resistance lines at 1.5859 and 1.5979, respectively. Meanwhile, the daily market stance is bearish.

USD/JPY

Daily maximum: 77.07

Daily minimum: 76.92

The market mean at 77.11 has been touched in early Wednesday trading, though the pair commenced moving south as concerns over the EU debt crisis intensified.

None of the support (76.82/57;75.99) and resistance (77.41/74; 78.32) levels has been hit. The daily outlook remains bearish.

USD/CHF

Daily maximum: 0.9235

Daily minimum: 0.9152

The American dollar continued its 2-week rally as the number of unemployment claims declined to 388K versus expected 395K. As a result, the market mean at 0.9187 was breached today.

None of the resistance (0.9249; 0.9284; 0.9374) levels has been approached whereas a breach of support 1 at 0.9159 indicates that support 2 at 0.9104 and support 3 at 0.9014 might be tested if the bearish bias occurs. The daily trading signals point at a continuation of the bullish trend ahead.

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