DAILY MARKET COMMENTARY
8 November 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Support lies at 1.3609 while resistance is at 1.3871.
USDJPY NEUTRAL Near-term directional triggers are at 78.98 and 77.44
GBPUSD BULLISH Resistance is at 1.6097, a rise through this level would expose 1.6167. Support lies at 1.5877.
USDCHF BULLISH Pressure is on resistance at 0.9083, a break above which would open 0.9139. Near-term support lies at 0.8862.
AUDUSD NEUTRAL Resistance is at 1.0447, while support lies at 1.0203.
USDCAD NEUTRAL Key resistance is at 1.0273 and support lies at 1.0055.
EURCHF BULLISH Focus is on resistance at 1.2474, the key high from Oct 19, a clearance of this level would open 1.2646. Support lies at 1.2265.
EURGBP BEARISH Break below 0.8548 would open the key low from Sept. 12 of 0.8530. Resistance is at 0.8612.
EURJPY BULLISH Resistance is at 108.25, a break above which would open 109.24. Key support lies at 106.50.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
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Tuesday, November 08, 2011
8th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
8 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The spotlight remains on Italy today as the Italian Prime Minister faces several challenges in parliament. The leaders of the opposition will decide whether to present a no-confidence vote to be attached to the 2010 budget vote. Although it is not clear whether a vote on Silvio Berlusconi's leadership will indeed take place, uncertainty remains high and investors need to be braced for yet more potentially confusing headlines. Compared to the trauma related to the Greek referendum last week, markets appear to be taking current issues in their stride. Yesterday G10 currencies spent the US session trapped in a range. CHF was the exception however, and EURCHF continued to climb, eventually breaking above 1.24. There are more speeches from SNB members today as expectations of a rise in the policy floor continue to build. The monthly meeting of Eurozone finance ministers ended on a positive note - EU Commissioner Rehn made it clear that the sixth tranche of Greek cash might be paid by late November after all, but only on condition that the new Greek government expresses a clear commitment to the terms of the second Greek rescue package. Political maneuvering continues in Greece amid reports that the identity of the new prime minister has been decided and will be announced on Tuesday. The group of EU-27 finance ministers is due to meet in Brussels at 0800GMT on Tuesday. There may be some headlines pertaining to contributions to the IMF for the sake of EFSF enhancement, though this is another area where the Eurozone authorities do not appear to have a clear-cut plan but time is running short. EURUSD traded 1.3737-1.3778 and USDJPY traded 78.02-78.09 overnight.
EUR
The monthly meeting of Eurozone finance ministers ended on a positive note. Eurogroup Chairman Juncker said he welcomed Greece's move towards a national unity government and that, once the new government is installed, the troika will return swiftly to Athens to conclude negotiations. EU Commissioner Rehn even raised the possibility that the sixth tranche of Greek cash might be paid some time in November, on condition that the new Greek government expresses a clear commitment - in writing - to the second Greek rescue package. Juncker added that only a Eurogroup teleconference would be needed to approve final disbursement, and that this could take place before Nov. 29.
Juncker announced that European Commission and IMF monitoring staff will be accompanied by monitors from the ECB when they install themselves in Rome latest this month. This will give the full troika a presence, and could be seen by many as a first step towards more intrusive surveillance.
Italian 10y yields climbed 30 bp to close at a 14-year high of 6.63%. The euro did not seem overly concerned, and the Italian MIB stock index actually advanced +1.3% on the day. Italian political uncertainty continues to cast its shadow over the bond market. There were reports - quickly denied - that Prime Minister Berlusconi was about to resign.
France announced a series of budget measures to help improve its fiscal position. Prime Minister Fillon said that sacrifices were needed to prevent France failing. He said the new measures would include increasing the retirement age to 67 (in 2017) and would be worth EUR7 bn in 2012, and EUR11.6 bn in 2013.
Talks continue in Greece, with Greek state TV claiming that the identity of the new prime minister has been agreed and will be announced on Tuesday.
ECB Executive Board member Stark said he assumes that the crisis will be under control or overcome in 1-2 years.
Newswires reported that the EFSF placed a EUR3 bn 10y bond in support of Ireland's rescue package. This is the fourth bond issued by the EFSF, taking total issuance so far to EUR16 bn.
The ECB announced that EUR9.52 bn worth of sovereign bond purchases settled last week, taking the total stock of ECB purchases since May 2010 to EUR183 bn. This was the most active week for the ECB in seven weeks.
The euro got a brief boost after the European Investment Bank reportedly suggested it could help recapitalise Eurozone banks to the tune of EUR 10 bn if its shareholders (EU governments) increase the EIB's capital by EUR1.3 bn.
Our analysts note that Tuesday is a key day in Italian politics. A vote on the 2010 budget is due to take place sometime in the afternoon. However, at 1000 GMT, the leaders of the opposition parties are due to decide whether to attach a no confidence vote to budget vote. Even if the vote is limited to one on the budget alone it has the potential to be de-stabilising given it has already failed to pass once before and a second rejection would be a definitive proof that the government does not have a working majority in parliament.
CHF
The Swiss Director of Labor, Gaillard said that the Swiss unemployment rate will climb to 3% this year, noting that the trend to lower unemployment has now ended. SNB Vice Chair Jordan said the bank is permanently watching the situation and, if there is a need to act, they will take further measures. Perhaps hinting at his intentions, Jordan added that the Swiss franc is still overvalued with EURCHF at 1.20, and is among the most over-valued currencies in the world. Ahead today, Jordan will speak again at 9:40 GMT and Hildebrand will speak at 13:30 GMT.
The head of a Swiss business group said it would welcome a "Christmas present" of the SNB moving the EURCHF floor to 1.30.
AUD
In figures released overnight, NAB business conditions came in at -1 in October, down from 1.5 the previous month. Business confidence was better at 2, after -1.
The Australian Trade balance was softer than expectations at A$2.56bn, down from last months' $2.95bn.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
8 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The spotlight remains on Italy today as the Italian Prime Minister faces several challenges in parliament. The leaders of the opposition will decide whether to present a no-confidence vote to be attached to the 2010 budget vote. Although it is not clear whether a vote on Silvio Berlusconi's leadership will indeed take place, uncertainty remains high and investors need to be braced for yet more potentially confusing headlines. Compared to the trauma related to the Greek referendum last week, markets appear to be taking current issues in their stride. Yesterday G10 currencies spent the US session trapped in a range. CHF was the exception however, and EURCHF continued to climb, eventually breaking above 1.24. There are more speeches from SNB members today as expectations of a rise in the policy floor continue to build. The monthly meeting of Eurozone finance ministers ended on a positive note - EU Commissioner Rehn made it clear that the sixth tranche of Greek cash might be paid by late November after all, but only on condition that the new Greek government expresses a clear commitment to the terms of the second Greek rescue package. Political maneuvering continues in Greece amid reports that the identity of the new prime minister has been decided and will be announced on Tuesday. The group of EU-27 finance ministers is due to meet in Brussels at 0800GMT on Tuesday. There may be some headlines pertaining to contributions to the IMF for the sake of EFSF enhancement, though this is another area where the Eurozone authorities do not appear to have a clear-cut plan but time is running short. EURUSD traded 1.3737-1.3778 and USDJPY traded 78.02-78.09 overnight.
EUR
The monthly meeting of Eurozone finance ministers ended on a positive note. Eurogroup Chairman Juncker said he welcomed Greece's move towards a national unity government and that, once the new government is installed, the troika will return swiftly to Athens to conclude negotiations. EU Commissioner Rehn even raised the possibility that the sixth tranche of Greek cash might be paid some time in November, on condition that the new Greek government expresses a clear commitment - in writing - to the second Greek rescue package. Juncker added that only a Eurogroup teleconference would be needed to approve final disbursement, and that this could take place before Nov. 29.
Juncker announced that European Commission and IMF monitoring staff will be accompanied by monitors from the ECB when they install themselves in Rome latest this month. This will give the full troika a presence, and could be seen by many as a first step towards more intrusive surveillance.
Italian 10y yields climbed 30 bp to close at a 14-year high of 6.63%. The euro did not seem overly concerned, and the Italian MIB stock index actually advanced +1.3% on the day. Italian political uncertainty continues to cast its shadow over the bond market. There were reports - quickly denied - that Prime Minister Berlusconi was about to resign.
France announced a series of budget measures to help improve its fiscal position. Prime Minister Fillon said that sacrifices were needed to prevent France failing. He said the new measures would include increasing the retirement age to 67 (in 2017) and would be worth EUR7 bn in 2012, and EUR11.6 bn in 2013.
Talks continue in Greece, with Greek state TV claiming that the identity of the new prime minister has been agreed and will be announced on Tuesday.
ECB Executive Board member Stark said he assumes that the crisis will be under control or overcome in 1-2 years.
Newswires reported that the EFSF placed a EUR3 bn 10y bond in support of Ireland's rescue package. This is the fourth bond issued by the EFSF, taking total issuance so far to EUR16 bn.
The ECB announced that EUR9.52 bn worth of sovereign bond purchases settled last week, taking the total stock of ECB purchases since May 2010 to EUR183 bn. This was the most active week for the ECB in seven weeks.
The euro got a brief boost after the European Investment Bank reportedly suggested it could help recapitalise Eurozone banks to the tune of EUR 10 bn if its shareholders (EU governments) increase the EIB's capital by EUR1.3 bn.
Our analysts note that Tuesday is a key day in Italian politics. A vote on the 2010 budget is due to take place sometime in the afternoon. However, at 1000 GMT, the leaders of the opposition parties are due to decide whether to attach a no confidence vote to budget vote. Even if the vote is limited to one on the budget alone it has the potential to be de-stabilising given it has already failed to pass once before and a second rejection would be a definitive proof that the government does not have a working majority in parliament.
CHF
The Swiss Director of Labor, Gaillard said that the Swiss unemployment rate will climb to 3% this year, noting that the trend to lower unemployment has now ended. SNB Vice Chair Jordan said the bank is permanently watching the situation and, if there is a need to act, they will take further measures. Perhaps hinting at his intentions, Jordan added that the Swiss franc is still overvalued with EURCHF at 1.20, and is among the most over-valued currencies in the world. Ahead today, Jordan will speak again at 9:40 GMT and Hildebrand will speak at 13:30 GMT.
The head of a Swiss business group said it would welcome a "Christmas present" of the SNB moving the EURCHF floor to 1.30.
AUD
In figures released overnight, NAB business conditions came in at -1 in October, down from 1.5 the previous month. Business confidence was better at 2, after -1.
The Australian Trade balance was softer than expectations at A$2.56bn, down from last months' $2.95bn.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Friday, November 04, 2011
4th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
4 November 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key support lies at 1.3567; a break below this level would open 1.3406. Resistance is at 1.3871 ahead of 1.4003.
USDJPY NEUTRAL Initial resistance is at 78.42 ahead of 78.98. Support lies at 77.43 ahead of 76.94.
GBPUSD BULLISH Resistance is at 1.6097, a break above this level would expose 1.6167. Support lies at 1.5825.
USDCHF BEARISH Near-term support lies at 0.8718 ahead of 0.8568, a key low from Oct. 27. Initial resistance is at 0.8960.
AUDUSD NEUTRAL Resistance is at 1.0567, while support lies at 1.0148.
USDCAD NEUTRAL Near-term directional triggers are at 1.0273 and 0.9975.
EURCHF BEARISH Tough support lies at 1.2123, a break below this level would expose 1.2012. Resistance is at 1.2288.
EURGBP BEARISH Initial support lies at 0.8548 ahead of the key high of 0.8530. Resistance is at 0.8670 and 0.8690.
EURJPY BULLISH Break through 109.24 would reinforce the bullish conditions and open 111.94. Near-term support lies at 106.50.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4 November 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key support lies at 1.3567; a break below this level would open 1.3406. Resistance is at 1.3871 ahead of 1.4003.
USDJPY NEUTRAL Initial resistance is at 78.42 ahead of 78.98. Support lies at 77.43 ahead of 76.94.
GBPUSD BULLISH Resistance is at 1.6097, a break above this level would expose 1.6167. Support lies at 1.5825.
USDCHF BEARISH Near-term support lies at 0.8718 ahead of 0.8568, a key low from Oct. 27. Initial resistance is at 0.8960.
AUDUSD NEUTRAL Resistance is at 1.0567, while support lies at 1.0148.
USDCAD NEUTRAL Near-term directional triggers are at 1.0273 and 0.9975.
EURCHF BEARISH Tough support lies at 1.2123, a break below this level would expose 1.2012. Resistance is at 1.2288.
EURGBP BEARISH Initial support lies at 0.8548 ahead of the key high of 0.8530. Resistance is at 0.8670 and 0.8690.
EURJPY BULLISH Break through 109.24 would reinforce the bullish conditions and open 111.94. Near-term support lies at 106.50.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
4 November 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Investors will probably need to brace for a second day of uncertainty as the political situation in Greece remains on edge. After a day of denial and counter-denial, George Papandreou remains in power but the opposition is clearly unwilling to enter into any form of negotiation to form a national unity government with him at the helm. Key global leaders gathering in Cannes are watching the situation unfold with unease, but their options are currrently limited to prevent any form of major fallout. The G20 leaders have been very open about the need to discuss a response strategy should Greece exit the Eurozone, even though there have been unanimous calls for Greece to stay as it would be the best way forward for the country itself and the global economy. Further discussions will continue throughout the day in both Athens and Cannes on the issues at hand, but investors would be more interested to discern whether a confidence vote would take place in the Greek parliament and what would happen should the Prime Minister win or lose it; for if it does go ahead and Papandreou does secure backing, the referendum issue may resurface, which would introduce fresh volatility. IMF officials and G20 participants have been clear that a new IMF credit line for countries suffering from 'exogenous shocks' would be made available, while the fund's resources would also enjoy a boost, but a final number is still under discussion. On the data front, we are looking for a 95k headline number in US non-farm payrolls and 110k private payrolls growth; the unemployment rate should dip to 9.0%. Although the figures remain soft, they should add credence to the Fed's view that the US economy is no longer facing short-term shocks and the need for new stimulus at this stage is insignificant. Overnight EURUSD traded 1.3789-1.3838, USDJPY 78.00-78.12.
EUR
The ECB cut the refi rate by 25 bp to 1.25%. During the subsequent press conference ECB President Draghi said Europe is heading toward a mild recession, and that ongoing market tensions are expected to dampen the pace of growth through the second half of the year. These were the most dovish ECB comments uttered since January. However, ECB Governing Council member Mersch later went further still and declared that the Eurozone economy is 'practically in freefall'.
Draghi added that some downside risks to the economy have already materialized, and that it is very likely the ECB's 2012 growth forecasts will get revised down significantly. Asked about Italian yields, he said these were not the focus of the meeting. Referring to the SMP, he said it is the duty of governments to bring yields down through credible fiscal policies, implying the ECB does not intend to scale up its bond purchases.
The current state of play in Greece is that Papandreou has not resigned, a confidence vote in the government is still scheduled for Friday night, and although plans for a referendum in early December have been effectively shelved the idea has not been completely taken off the table. The potential departure of Papandreou as prime minister over the coming days should remove the threat of a referendum altogether as there appears to be little appetite for it - on government or opposition benches.
Another PASOK parliamentary party member resigned, reducing Papandreou's majority to a single seat. This raises the risk that Friday's confidence vote fails - an event which would officially topple the PASOK administration. Unnamed newswire sources reported that Papandreou had the support of only 110 parliamentarians, well short of the 151 needed to secure a majority in the confidence vote.
However all the signs are that parties are working towards the creation of a unity government, which could in principle take the reins on an interim basis if Friday's confidence vote fails. It seems opposition parties are not overly keen on this, but might be persuaded to participate if a near-term election date were set, and the unity government were understood to be temporary from the outset. However, it is not clear at this stage if such a show of unity would be enough to persuade the EU/IMF to disburse the sixth tranche in time to repay a maturing bond on Dec. 19.
The G20 meeting continues and we expect publication of the final communiqu? before the weekend. Newswire reports said Eurozone nations are considering pooling their IMF SDR allocations. This could in principle allow the Eurozone to borrow from the IMF on behalf of a fiscally weak member-state, and the amounts involved would greatly surpass what a single country could borrow from the IMF if acting alone. Newswire sources also claimed the IMF is considering a large allocation of additional SDRs - if so, this would further boost the borrowing ability of vulnerable sovereigns, as borrowing ceilings at the IMF are expressed in terms of quota percentages which depend on SDR allocations.
However, the wires also warned that these credit lines may also not be applicable to countries such as Spain and Italy, which largely negates the need for any expansion as it is mostly large Eurozone nations which face the biggest risks. Sources also indicate Italy is to agree to commit to deficit reduction in the G20 statement.
JPY
Japanese Finance Minister Azumi said he explained to US Treasury Secretary Geithner the rationale behind Japan's decision to intervene in FX, and Geithner neither supported nor opposed the intervention.
A Japanese government official said Japan will continue to buy EFSF bonds - he did not indicate how much although we note that Japan previously announced it had purchased 20% of the first EFSF bond issue in January.
GBP
UK October services PMI was on the soft side of consensus at 51.3 (cons. 52.0).
BoE MPC member Bean said that survey evidence points to only very moderate growth at best in Q4.
CHF
SNB Board member Danthine said the SNB chose 1.20 as the floor in EURCHF because that level balanced the risks involved. On one hand there were the economic risks of "recessions and deflation" and on the other "you had to be credible in the eyes of the financial markets". He added that SNB monetary policy is not influenced by worries over losses incurred in intervention operations.
Danthine warned that further measures will be taken if the outlook for the economy or deflation risks justify it.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4 November 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Investors will probably need to brace for a second day of uncertainty as the political situation in Greece remains on edge. After a day of denial and counter-denial, George Papandreou remains in power but the opposition is clearly unwilling to enter into any form of negotiation to form a national unity government with him at the helm. Key global leaders gathering in Cannes are watching the situation unfold with unease, but their options are currrently limited to prevent any form of major fallout. The G20 leaders have been very open about the need to discuss a response strategy should Greece exit the Eurozone, even though there have been unanimous calls for Greece to stay as it would be the best way forward for the country itself and the global economy. Further discussions will continue throughout the day in both Athens and Cannes on the issues at hand, but investors would be more interested to discern whether a confidence vote would take place in the Greek parliament and what would happen should the Prime Minister win or lose it; for if it does go ahead and Papandreou does secure backing, the referendum issue may resurface, which would introduce fresh volatility. IMF officials and G20 participants have been clear that a new IMF credit line for countries suffering from 'exogenous shocks' would be made available, while the fund's resources would also enjoy a boost, but a final number is still under discussion. On the data front, we are looking for a 95k headline number in US non-farm payrolls and 110k private payrolls growth; the unemployment rate should dip to 9.0%. Although the figures remain soft, they should add credence to the Fed's view that the US economy is no longer facing short-term shocks and the need for new stimulus at this stage is insignificant. Overnight EURUSD traded 1.3789-1.3838, USDJPY 78.00-78.12.
EUR
The ECB cut the refi rate by 25 bp to 1.25%. During the subsequent press conference ECB President Draghi said Europe is heading toward a mild recession, and that ongoing market tensions are expected to dampen the pace of growth through the second half of the year. These were the most dovish ECB comments uttered since January. However, ECB Governing Council member Mersch later went further still and declared that the Eurozone economy is 'practically in freefall'.
Draghi added that some downside risks to the economy have already materialized, and that it is very likely the ECB's 2012 growth forecasts will get revised down significantly. Asked about Italian yields, he said these were not the focus of the meeting. Referring to the SMP, he said it is the duty of governments to bring yields down through credible fiscal policies, implying the ECB does not intend to scale up its bond purchases.
The current state of play in Greece is that Papandreou has not resigned, a confidence vote in the government is still scheduled for Friday night, and although plans for a referendum in early December have been effectively shelved the idea has not been completely taken off the table. The potential departure of Papandreou as prime minister over the coming days should remove the threat of a referendum altogether as there appears to be little appetite for it - on government or opposition benches.
Another PASOK parliamentary party member resigned, reducing Papandreou's majority to a single seat. This raises the risk that Friday's confidence vote fails - an event which would officially topple the PASOK administration. Unnamed newswire sources reported that Papandreou had the support of only 110 parliamentarians, well short of the 151 needed to secure a majority in the confidence vote.
However all the signs are that parties are working towards the creation of a unity government, which could in principle take the reins on an interim basis if Friday's confidence vote fails. It seems opposition parties are not overly keen on this, but might be persuaded to participate if a near-term election date were set, and the unity government were understood to be temporary from the outset. However, it is not clear at this stage if such a show of unity would be enough to persuade the EU/IMF to disburse the sixth tranche in time to repay a maturing bond on Dec. 19.
The G20 meeting continues and we expect publication of the final communiqu? before the weekend. Newswire reports said Eurozone nations are considering pooling their IMF SDR allocations. This could in principle allow the Eurozone to borrow from the IMF on behalf of a fiscally weak member-state, and the amounts involved would greatly surpass what a single country could borrow from the IMF if acting alone. Newswire sources also claimed the IMF is considering a large allocation of additional SDRs - if so, this would further boost the borrowing ability of vulnerable sovereigns, as borrowing ceilings at the IMF are expressed in terms of quota percentages which depend on SDR allocations.
However, the wires also warned that these credit lines may also not be applicable to countries such as Spain and Italy, which largely negates the need for any expansion as it is mostly large Eurozone nations which face the biggest risks. Sources also indicate Italy is to agree to commit to deficit reduction in the G20 statement.
JPY
Japanese Finance Minister Azumi said he explained to US Treasury Secretary Geithner the rationale behind Japan's decision to intervene in FX, and Geithner neither supported nor opposed the intervention.
A Japanese government official said Japan will continue to buy EFSF bonds - he did not indicate how much although we note that Japan previously announced it had purchased 20% of the first EFSF bond issue in January.
GBP
UK October services PMI was on the soft side of consensus at 51.3 (cons. 52.0).
BoE MPC member Bean said that survey evidence points to only very moderate growth at best in Q4.
CHF
SNB Board member Danthine said the SNB chose 1.20 as the floor in EURCHF because that level balanced the risks involved. On one hand there were the economic risks of "recessions and deflation" and on the other "you had to be credible in the eyes of the financial markets". He added that SNB monetary policy is not influenced by worries over losses incurred in intervention operations.
Danthine warned that further measures will be taken if the outlook for the economy or deflation risks justify it.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Wednesday, November 02, 2011
2nd of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
2 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key support is at 1.3567; a break below this level would be a bearish development and open 1.3500. Resistance is at 1.3871 ahead of 1.4000.
USDJPY NEUTRAL Resistance is at 78.99 ahead of 79.53. Support lies at 77.43 ahead of 76.94.
GBPUSD BULLISH Initial resistance is at 1.6097, a break above this level would expose 1.6167. Support lies at 1.5825.
USDCHF NEUTRAL The recovery needs to break above 0.9083 to develop bullish conditions and expose 0.9316. A pull back through 0.8568 would resume weakness.
AUDUSD BULLISH Resistance is at 1.0567; a break above this level would reinforce the bull trend and open 1.0765, the Sept 1. key high. Support lies at 1.0203 ahead of 1.0102.
USDCAD BEARISH Support lies at 0.9975 ahead of 0.9892, a key low from Oct. 27. Key resistance is at 1.0273.
EURCHF BEARISH Key support is at 1.2123; a move below this level would expose 1.2012. Resistance is at 1.2288.
EURGBP BEARISH Focus on key support at 0.8530, a break below which would signal scope for extension of losses towards 0.8456. Resistance is at 0.8623 ahead of 0.8670.
EURJPY BULLISH Resistance is at 109.24 ahead of 111.94, key high from Aug 29. Near-term support lies at 105.68 ahead of 104.75.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
2 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key support is at 1.3567; a break below this level would be a bearish development and open 1.3500. Resistance is at 1.3871 ahead of 1.4000.
USDJPY NEUTRAL Resistance is at 78.99 ahead of 79.53. Support lies at 77.43 ahead of 76.94.
GBPUSD BULLISH Initial resistance is at 1.6097, a break above this level would expose 1.6167. Support lies at 1.5825.
USDCHF NEUTRAL The recovery needs to break above 0.9083 to develop bullish conditions and expose 0.9316. A pull back through 0.8568 would resume weakness.
AUDUSD BULLISH Resistance is at 1.0567; a break above this level would reinforce the bull trend and open 1.0765, the Sept 1. key high. Support lies at 1.0203 ahead of 1.0102.
USDCAD BEARISH Support lies at 0.9975 ahead of 0.9892, a key low from Oct. 27. Key resistance is at 1.0273.
EURCHF BEARISH Key support is at 1.2123; a move below this level would expose 1.2012. Resistance is at 1.2288.
EURGBP BEARISH Focus on key support at 0.8530, a break below which would signal scope for extension of losses towards 0.8456. Resistance is at 0.8623 ahead of 0.8670.
EURJPY BULLISH Resistance is at 109.24 ahead of 111.94, key high from Aug 29. Near-term support lies at 105.68 ahead of 104.75.
A. White
Analyst at Fibosignals.com
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