Dukascopy Morning Forex Overview

Dukascopy Fundamental Analysis

EUR

“The ECB’s role is to ensure the stability of the euro””
– Valerie Pecresse, French government spokeswoman

Germany and France, two key economies of the European Union, clashed over the role of the European Central Bank in financial crisis management, after modest bond sales by Italy and Spain failed to win back investor confidence.

USD

“Economic conditions are moving upward at an accelerating pace””
– Joel Naroff, chief economist at Naroff Economic Advisors
The number of Americans claiming for jobless benefits decreased to 388 thousand last week, the lowest level since May 2011, signaling gradual improvement in the U.S. employment market. Economists expected the reading to advance to 396 thousand.

GBP

“These numbers [retail sales] are pretty good, though I doubt they’re going to persist”
– George Buckley, an economist at Deutsche Bank 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.

CHF

“Volatility on the markets is enormously high”
– Christian Schmidt, a technical analyst for equities at Helaba Landesbank Hessen-Thueringen

Swiss stocks lost ground on Thursday amid higher borrowing costs for Spain and France. The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, lost 0.72%, or 41.18 points, to 5,644.62. The broader Swiss Performance Index declined 0.74%, or 38.24 points, to 5,122.25.

JPY

“There’s a slowdown in the macro economy, weighing on the market”
– Shintaro Takeuchi, fund manager at Tokyo Marine

Japanese stocks rebounded on Thursday after Olympus Corp. jumped 19% and Japan Petroleum Exploration Co. gained 3.6%. The Nikkei 225 rose 0.19%, or 16.47 points, to 8,479.63, while the broader Topix climbed 0.50%, or 3.60 points, to 727.71.

Dukascopy Technical Analysis

EUR/USD

“The contagion [of banks] risk is big””

– Luzerner Kantonalbank AG (based on Bloomberg)
The pair is expected to bounce off 1.3380/60 and then continue its downward movement toward 1.3145. The ultimate target remains at 1.20. Rallies should be capped by resistances at 1.3870 and 1.3995/1.4104.

EUR/JPY

“We are reaching the limit for manufacturing in Japan“”
– Fukoku Asset Management (based on Reuters)
While approaching 103.08 the bearish impetus seems to be losing power, therefore we might observe some small rallies up to 104.75 and 105.32. Dips, on the other hand, will be limited by 103.40, 103.08 and 102.44.

GBP/USD

“Real consumer spending is likely to continue to fall sharply for some time to come [in the UK]”
– Capital Economics (based on WSJ)
For now GBP/USD has managed to stabilize at 1.5720 after penetrating 1.5825. Nevertheless, this is only considered to only a near-term base before it slides down to 1.5632, then 1.5272 and eventually 1.5050..

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
USD/JPY continues to distance itself from 79.44 and is slowly crawling below 76.94. Supports at 75.94 and 75.31 are expected to halt bearish movement, while the price has to close above 80.44 to regain bullish momentum.

USD/CHF

“Economic conditions are moving upward at an accelerating pace””
– Naroff Economic Advisors (based on CNBC)
Even though a test of resistances located at 0.9317 and 0.9341/99 may trigger a trade off, the movement to the upside is anticipated to carry on afterwards. USD/CHF is unlikely to fall below 0.8555/50 before it challenges new resistances.

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