Dukascopy Morning Forex Overview

Dukascopy Fundamental Analysis

EUR

“The deterioration in debt metrics … are exerting pressure on France’s creditworthiness”
– Alexander Kockerbeck, Moody’s Senior Credit Officer

Moody’s Investor Service said on Monday that France’s top notch AAA credit rating is under pressure amid higher borrowing costs and uncertain economic outlook.

USD

“The housing market is stabilizing”
– Sal Guatieri, a senior U.S. economist at BMO Capital Markets
U.S. existing home sales unexpectedly rose 1.4 percent to an annual rate of 4.97 million in October from 4.9 million in September, said the National Association of Realtors on Monday.

GBP

“The relentless stream of economic uncertainty around the eurozone crisis has eroded consumer confidence”
– Miles Shipside, commercial director at Rightmove

U.K. month on month house prices slid 3.1% in November, the most in a year, amid deteriorating debt crisis in Europe and uncertain economic outlook, said the Rightmove, one of the largest real estate portals in the country.

CHF

“… investors forgot about the problems in the U.S.”
– John Plassard, director at Louis Capital Markets

Swiss stocks tumbled on Monday amid worries that U.S. policy makers may not reach a consensus on budget cuts and after Spain selected a new government.

JPY

“Exports will likely continue to fall for the next few months”
– Takeshi Minami, chief economist at Norinchukin Research

Japan’s trade deficit widened to –0.46 trillion yen in October from –0.10 trillion in September, indicating the nation’s recovery is slowing from the March disaster, said the Ministry of Finance on Monday.

Dukascopy Technical Analysis

EUR/USD

“Given how the crisis is worsening on an almost daily basis we’ll see the euro lower”

– Nomura Securities (based on Bloomberg)
At the moment the European currency is rallying, but is expected to be halted by resistances at 1.3616 and 1.3635. These levels are likely to trigger a sell off down to 1.3270 and 1.3145 in the long-term, after EUR/USD breaches the immediate support at 1.3424.

EUR/JPY

“There is no fundamental change in the markets’ risk averse mood. There’s been no clear progress in the euro zone”
– Credit Suisse (based on Reuters)
The pair’s bias remains more or less neutral as it is being traded in a tight corridor between a support at 103.40 and a resistance located at 106.45. The latter level is anticipated to provoke failure in case of advancement and send the pair down to 100.74.

GBP/USD

“We will restart the housing market and get the nation building again”
– David Cameron, U.K. Prime Minister (based on WSJ)
The British Pound – American Dollar currency pair has already pierced through a support at 1.5720 and almost reached a target at 1.5632. Today the price should find support at 1.5613 and consolidate there for now.

USD/JPY

“Japanese authorities [are likely] to intervene again should the yen appreciate to 75 against the greenback”
– Eisuke Sakakibara (based on CNBC)
USD/JPY is currently directionless and is not expected to move in particular direction on Tuesday, as price’s maneuvers should be limited by support at 76.58 and resistances situated at 77.29/32 and 78.07.

USD/CHF

“If there was a downgrade of the U.S. credit rating, the dollar would be sold off. But that seems unlikely in the very near future””
– Tokai Tokyo Securities (based on Reuters)
Trading indicators show a strong sell signal for USD/CHF, even though dips will encounter tough supports at 0.9015 and 0.8555/20 that should hold the pressure. Nevertheless the outlook remains positive with aims set at 0.9237, 0.9317 and eventually 0.9341.

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