Comments and forex-analytics from FBS Holdings Inc. brokerage company

[FBSanalytics]

[COLOR="Green"]Hello!

I'm glad to present in this thread the analytics of FBS Holdings Inc.

FBS Holdings Inc.[/COLOR] is an international brokerage company providing top quality financial and investment services all over the world. Established in 2006, it developed and implemented top-notch technologies and service level standards in its effort to get on top of the market. The principles we base our work on are transparency, honesty and professionalism. Our dedicated team of highly educated and experienced professionals works on the development and enhancement of FBS services.

[COLOR="green"]Activity[/COLOR]
FBS activities in general include:
Online forex trading
Online CFD, Futures, Indices, Stocks and other markets trading
Analytical and informational support

FBS offers a completely new approach to trading accounts variety and services pattern. We now offer 3 types of accounts, and each of them is designed to fit the needs of certain group of traders. These are cent accounts, dollar accounts with fixed spread and ECN accounts.

FBS operates on Metatrader 4 platform, the world's most wide-spread and comfortable trading software, known for many years among traders. Every customer can use free unlimited demo accounts to try out our trading services and develop one's own trading strategy without any risk of loss.

[COLOR="green"]Markets news, comments, calendar and more[/COLOR]
Analytical support is one of our strongest advantages. FBS has a large in-house analytical department, gathering top level professionals in market research. Our analysts provide round-the-clock analytical support, with over 120 total market news, comments, opinions, predictions and many more. Our analysts also provide comments for several business broadcasting companies and TV shows.

[COLOR="green"]Missions and statement[/COLOR]
What makes FBS different from rivals - is our devotion to the business and industry we all work in. FBS is the first customer-oriented brokerage in the world. Our mission is to provide the highest service level, set the highest goals and reach them. We are enhancing our services every day and satisfy the needs and concerns of our customers. In today's rapidly evolving world this is the only right strategy to develop the business and provide services.

[COLOR="green"]Regulation and licensing[/COLOR]
FBS is a fully regulated and licensed brokerage under the authority and control of Financial Services Commission. The Licence №: C108005331

[FBSanalytics]

[COLOR="Green"]Analytics: 13/05/2010[/COLOR]

[COLOR="green"]John Snow: euro’s rescue needs resolute measures[/COLOR]
John Snow, the former U.S. Treasury Secretary, believes that the single currency may end its life if the euro zone nations don’t unite all their policies.
According to him, fiscal consolidation is certainly the most important, but the merging of labor and capital markets might be necessary as well.
Snow believes that the main thing to worry about is that what’s happening with the government bonds as the debts of a state are too big to bailout and the number of countries to help is too big, there will be a moment when there will be no one to help indebted nations.
The International Monetary Fund won’t be very useful as it also depends on donations.
The economists also spoke about the danger of hyperinflation as the governments can start printing money trying to save themselves.

[COLOR="green"]Bank of Tokyo Mitsubishi UFJ: pound will drop to $1.38[/COLOR]
Analysts at Bank of Tokyo Mitsubishi UFJ Ltd. claim that even though British currency has already significantly depreciated they expect pound to survive a further decline to $1.38.
As a result, they recommend selling sterling versus the greenback.

[COLOR="green"]Pimco: euro zone's growth pace will be below the avarsge[/COLOR]
Economists at Pacific Investment Management Co., managing more than $1 trillion in assets, claim that despite the fact that world’s markets survive a confident rebound the European economic growth will stay below the average level. According to them, the current structural factors are more powerful than the cyclical ones.
The specialists say that the extension of the euro zone’s crisis all over the world is quite possible as the markets worry that the countries’ debts are too high to get over this situation.
Bank of America Merrill Lynch estimates that European countries will need about 2 trillion euro in order to repay their obligation during the next 3 years.
Pimco predicts that the problems will last for the long term. The past year demonstrated the cyclical advance of the global markets but that didn’t actually help to raise employment and investments.

[COLOR="green"]Bank of Nova Scotia: no factors for euro's growth[/COLOR]
The single currency slumped close to its minimum since March 2009 losing 1.2% this week trading versus US dollar.
It was affected as the markets are worrying that the indebted euro area’s countries will act too slow to fight the budget deficits efficiently.
Strategist at Bank of Nova Scotia in Toronto claim that there are no factors that could make investors be bullish on euro. Even though the tension eased when there was agreement on the bailout the markets still don’t make out how the fiscal tightening measures will be brought to life.
Strategists at UBS AG in London agree that the market is absolutely negative on euro.

[COLOR="green"]US initial jobless claims slightly declined[/COLOR]
According to the data for the week before May 8, the number of initial jobless claims declined by 4,000 to 444,000. Such improvement is regarded as rather week because the revised figures of the previous week turned out to be up by the same amount. However, the 4-week average got to the lowest level since the end of March decreasing by 9,000 to 450,500.
As for continuing claims for the week before May 1, they became a bit higher to 4.627 million while the four-week average climbing to 4.640 million.
Such results became better but not better enough to expect sizable growth of payrolls in May.

[COLOR="green"]USD/CAD: the pair rebounded to 1.0180[/COLOR]
US dollar managed to compensate the losses it experienced versus loonie this week and began recovering. At today’s European session the pair hit the week minimum at 1.0107.
The pair USD/CAD was able to add 80 pips and get above 1.0180. The greenback was supported by the decline in oil price and renewed risk aversion.
If the pair goes up, resistance levels will be at 1.0215 (May 12 maximum) and 1.0270. If the rate declines, support levels may be found at 1.0145 and 1.0105/00 (session’s minimum).

[COLOR="Green"]On-line analytics from FBS always is available on our website.[/COLOR]

[FBSanalytics]

[COLOR="Green"]18.05.2010

Bearish bets on euro[/COLOR]
Analysts at Commerzbank AG believe that the single currency will survive further decline as the demand for it slumped and investors have no confidence in euro supposing that austerity measures in euro zone’s countries will worsen the economic situation in the region. The specialists speak about the so-called free fall of the euro.
According to the economists at Barclays Plc in London, investors are eager to know if the current euro-zone crisis is similar to the 2008 banking crisis.
Strategists at CLSA Asia Pacific Markets expect that the Europe’s bailout program will weaken the European currency resulting eventually in euro’s slump to parity with the greenback.
Standard Bank: euro may recover to $1.25 by the end of 2010
Analysts at Standard Bank Plc claim that the single currency is likely to end the year getting up to $1.25. According to them, this can happen as the European Central Bank acts in order to achieve low inflation following the path of Japan.
The specialists underline that the ECB was conducting such policy before and this happened to strengthen euro.

[COLOR="green"]Quantum Global: euro will fall to $1.20[/COLOR]
Strategists at Quantum Global Wealth Management believe that the single currency is getting closer and closer to its long-term fair value at $1.20. If the pair EUR/USD breaks below this level, they would regard the possibility of beginning to buy euro again. According to the specialists, the pressure on euro is still that high that it can lower the European currency to that point.
The company cut its euro cash holdings by 3% from 50% in 2008. Quantum Global expects that the inflation in the euro zone will be minimal and the ECB will keep interest rates low. It acts in order to secure its investments choosing short-dated bonds issued by Germany, France and Belgium.

[COLOR="green"]Resona Bank: weak euro will prevent deflation[/COLOR]
Analysts at Resona Bank Ltd. believe that the single currency is likely to go down below the 4-year minimum versus the greenback. According to them, it may happen because the European Central Bank regards euro’s depreciation as the way to prevent deflation.
Even with the bailout program the economy of euro zone’s countries will survive hard times as such nations as Greece and Portugal will cut their budget spending. The specialists claim that in such situation when there is a risk of deflation, weak euro would be better for the region’s economy.
Resona Bank believes that the euro zone will certainly survive if Greece manages to conduct necessary fiscal tightening measures. The analysts suppose that European debt crisis won’t affect the global credit system and the development of the world’s economy.

[COLOR="green"]Standard Bank: euro will gain versus pound[/COLOR]
Analysts at Standard Bank recommend investors to buy the single currency versus sterling. The specialists expect that euro will rise to 88 pence. If the European currency declines to 84.35 pence, it will be necessary to stop trading.

[COLOR="green"]Commerzbank: pound will rebound versus US dollar[/COLOR]
British currency managed to rebound a bit versus the greenback. Pound got up from 14-month minimum at 1.4245 that it hit yesterday. Technical analysts at Commerzbank claim that the cable may survive a further increase to 1.4780/1.4875 area.

[COLOR="Green"]Canadian dollar is gaining versus US dollar[/COLOR]
Canadian dollar went up trading against the greenback. Loonie’s growth was caused by first in the last 6 days crude oil advance. Crude oil for June delivery gained 3% rising to $72.21 a barrel on the Nymex from yesterday’s 5-month minimum below $70 a barrel.
The pair is currently trading in 1.0260 area.
If the rate goes down, support levels are situated at 1.0200/10 (May 14 minimum/intra-day level) and 1.0150 (May 11, 12 minimum). If the pair grows, resistance levels will be at 1.0320/30 (intra-day resistance), 1.0380 (May 14 maximum) and 1.0430/40 (May 17 maximums).

[COLOR="green"]National Australia Bank: AUD/USD consolidated between 0.8700 and 0.8790[/COLOR]
Australian dollar dropped on Monday to new 3-month minimum at 0.8680 as Reserve Bank of Australia after increasing its key interest rate 6 times in 7 meetings came to the conclusion that the borrowing cost became high enough. Today the pair AUD/USD consolidated between 0.8700 and 0.8790.
Strategists at National Australia Bank Ltd. in Sydney claim that if the expectations for the RBA to lift up rates by 45 basis points over the next year disappear, Australia’s dollar will survive further declines.
Aussie made several attempts to jump but it didn’t have necessary strength. The 13-day MA intersected the 200-day MA from the top, while the 21-day MA is about to cross over the 100-day MA. As a result, we can see bearish pressure on Australian currency.
AUD/USD is currently trading in 0.8765/70. If the rate goes down below 0.8700, support levels are situated at 0.8645 and 0.8595. If the pair grows, resistance levels will be at 0.88, 0.8855 and 0.8880/0.89.

[COLOR="green"]On-line analytics from FBS always is available on our website[/COLOR]

[FBSanalytics]

[COLOR="Green"]19.05.2010

Commerzbank: euro won’t fall below 1.2135[/COLOR]
The single currency began declining again yesterday. It dropped from 1.2445 to 1.2135 that represents 50% retracement of the advance from 2000 to 2008. Technical analysts at Commerzbank believe that euro’s slump may stop at this support level.
The specialists expect that the pair EUR/USD will consolidate for a period of time as risk/reward ratio for selling euro got lower. Never the less, the European currency won’t be able to get high, resistance is situated in 1.2445/1.2510 area.

[COLOR="green"]Mizuho advises buying loonie versus pound[/COLOR]
Analysts at Mizuho Asset Management Co. recommended investors to buy Canadian dollars for British pounds. The specialists claim that the Bank of England is likely to keep the interest rates low in order to stimulate UK economy that is now in rather bad condition.
As for Canada, traders think that the central bank of the country might lift up its key rate by at least 1.5 percentage points in 2011 from the current level of 0.25%.
According to the International Monetary Fund’s forecast British economy will gain 1.3% in 2010, while Canadian one may extend by 3.1%.

[COLOR="green"]Germany prohibited naked short-selling on sovereign debt[/COLOR]
The single currency slumped to the 4-year minimum versus the greenback. It happened as the concerns about the future of the euro zone strengthened again. Germany prohibited so-called naked short-selling on sovereign debt and some financial stocks of main German institutions until March 31, 2011. Strategists at Brown Brothers Harriman & Co. claim that that put European policy-making credibility under question.
When securities are sold naked, the trader doesn’t own the shares but use the shares borrowed from broker.
In addition, German Chancellor Angela Merkel claimed today that euro is at risk and the debt crisis may have a negative impact on the rest of the world.

[COLOR="green"]BNY Mellon: pound fell to 14-month minimum[/COLOR]
British currency got today to the 14-month minimum versus the greenback. Strategists at Bank of New York Mellon Corp. in London claim that sterling is affected by the increased risk aversion. European debt crisis is weighting on the pound’s dynamics. Euro today experienced new decline as Germany banned short-selling of euro government bonds and shares of ten banks and insurance companies.

If the pair goes down below 1.4235, support levels will be at 1.4100 (March 30 2009 minimum) and 1.3975.
If the rate increases, initial resistance is at 1.4370 (session’s maximum), 1.4405 (intra-day level) and 1.4500/15 (May 18 maximums).

[COLOR="green"]EUR/CHF: euro gained 200 pips in an hour[/COLOR]
European currency jumped today by 200 pips in an hour trading versus franc. This bounce can be explained by the possible intervention of the Swiss National Bank. Euro rate extended from 1.4002 to 1.4203 getting above its maximum since May 10. Then the pair reversed and declined to 1.4115 and after that rose again, according to the hour chart.
EUR/CHF is currently trading in 1.4170/80 area.
If the rate goes up, resistance levels lie at 1.4205 (session maximum), 1.4250 and 1.4320. If the pair declines, the most important support is found at 1.4000. If euro gets lower than that it would fall to the record minimums.

[COLOR="green"]Bank of Montreal: euro is recovering versus dollar[/COLOR]
European currency is recovering from the 4-year minimum versus the greenback. This time euro was supported by the expectations that European leaders may take measures to help the single currency. There was a speculation that the European Central Bank can act in order to stop the depreciation of the common currency.
Strategist at Bank of Montreal in Chicago claim that the market’s sentiment is rather positive as investors are hopeful awaiting that European authorities will propose some measures to improve the current situation. According to the specialists, euro zone has to conduct a wide discussion on its future and decide on sanctions for those member states that are breaking the rules.
The pair EUR/USD is currently trading in 1.2330 area.
If the rate goes up, resistance will lie at 1.2445 (May 18 maximum). If the pair declines, support levels will be found at 1.2135 (50% retracement of the 2000/2008 advance), 1.2030 (April 2006 minimum) and 1.2000 (psycho level).

[COLOR="green"]BNP Paribas: EUR/CHF growth won't last long[/COLOR]
Strategists at Mizuho Corporate Bank Ltd claim that euro’s today advance could be caused by Swiss National Bank’s selling of the national currency. They comment that investors are covering short euro positions.

Analysts at BNP Paribas SA think that the single currency won’t be gaining for a long time as it will be affected by the further development of European debt crisis. As a result, BNP Paribas doesn’t believe that euro will be able to hold at the current high levels.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets [/COLOR]

[FBSanalytics]

[COLOR="Green"]20.05.10

Bank of America-Merrill Lynch: euro may drop to $1.16[/COLOR]
Strategists at Bank of America-Merrill Lynch expect the single currency to survive a significant decline.
According to the specialists, euro is getting closer to $1.2134 representing 50% retracement of its growth from a record minimum at 82.30 U.S. cents in 2000. If the European currency falls past this level, it can slump to $1.16. The last time euro traded at this level was in November 2005.
The analysts believe that market will be negative on euro in the middle term as investors will be concerned about euro zone’s fiscal problems. They suppose that it would be hard for European authorities if they decide to make intervention in currency markets.

[COLOR="green"]Societe Generale: Central banks can reduce euro reserves[/COLOR]
The fact that the some of the world's largest money managers’ and central banks’ sentiment on euro is very negative can harm the single currency’s future dynamics.
As euro was following the downtrend during the last several months and lost 15% versus the greenback since the beginning of 2010, large hedge funds got in the center of market’s attention. The central banks can have actually much more discouraging influence on Forex market even if they just stop euro purchases. According to economists at Societe Generale in Hong Kong, this process has got slower and central banks have become less active that represents the growing risks.
South Korean central bank claimed in May that euro is no longer attractive as reserve currency as it used to be. Iran reported this week about the possibility of changing currency ratio in its reserves.
However, some institutions still regard the depreciation of euro as the opportunity to buy it. Monetary authorities of some emerging economies, such as China, were trying to diversify their currency reserves and reduce the part of US dollars in favor of the European currency.

[COLOR="green"]Commerzbank: euro's trying to correct[/COLOR]
The single currency was up during American and early Asian trade. It managed to compensate Tuesday losses.
Technical analysts at Commerzbank observe the embryonic reversal from the main support at 1.2135 representing 50% retracement of advance from 2000 to 2008.
If the rate goes up, EUR/USD has to overcome inter-month pivot at 1.2445 in order to show further corrective growth. The rebound will be aimed to 1.2510, 1.2735 and 1.2850.

[COLOR="green"]Saxo Bank: daily currency forecast[/COLOR]
Analysts at Saxo Bank claim that the trend for EUR/USD will be neutral and the pair will be fluctuating in range between 1.2270 and 1.2430. If the single currency breaks above 1.2440 it can head upwards to 1.2525 zone.
USD/JPY: the pair may rise to 92.95. As a result, it’s advised to buy the greenback at 90.73-91.00/10.
EUR/JPY: the pair’s maximum was at 113.80, it may be trading today below this level but higher than 112.50.
GBPUSD: the pair is expected to decline to 1.4300 and pounds should be sold below 1.4505.
AUDUSD: the pair is likely to stay in 0.83-0.8390 zone.
USDCAD: if the pair goes below 1.04 it would hit 1.0340. Resistance lies at 1.0505.

[COLOR="green"]Nomura: euro forecast cut to $1.15[/COLOR]
Strategists at Nomura Securities Co. decreased their euro forecast from $1.30 by the end of 2010 to $1.15. By the end of June the single currency is likely to fall to $1.18.
According to the specialists, even if the debt crisis becomes less tense investors will reduce the amount of assets denominated in euro and this will be affecting the European currency.
According to the median forecast of analysts surveyed by Bloomberg, euro will trade at $1.25 by the end of the year.

[COLOR="green"]Standard Bank: G7 help is needed to save euro[/COLOR]
Analysts at Standard Bank Plc believe that government interventions could only postpone the slump of euro but it will fail to save the single currency from dropping. The specialists note that such situation is quite likely if euro keeps falling.
As a result, the monetary authorities of the euro zone’s countries suppose that there is the necessity of other G7 nations’ help to make an intervention efficient. Standard Bank expect that the United States will agree if the euro zone asks them for help.

[COLOR="green"]Windsor Brokers: uptrend for USD/CHF[/COLOR]
The greenback was rising against Swiss franc since the middle of April in 1.0500 area. It went above 1.1445 resistance on Tuesday and got to one-year maximum at 1.1585. After that the pair USD/CHF declined below 1.1500.

Technical analysts at Windsor Brokers Ltd claim that the pair is still within the uptrend that is confirmed by yesterday’s spike rejection at 1.1417. It will be aimed at growing to 1.1675 while the rate doesn’t get lower than 1.1449.
If the pair goes up, resistance levels will be found at 1.1584, 1.1605 and 1.1675. The analysts place support at 1.1449, 1.1417 and 1.1402.

[COLOR="green"]Windsor Brokers: GBP/USD is consolidating in the short-term[/COLOR]
British currency recovered from 14-month minimum versus the greenback at 1.4235 capping at 1.4465 during the Asian trade. At the beginning of the European session the pair GBP/USD decreased to 1.4315. Then though market’s sentiment became more positive sterling didn’t manage to get higher than 1.4400/05 resistance.
If the pair goes up above the intra-day resistance at 1.4400/05, resistance levels will be found at 1.4465 (May 19 maximum) and 1.4525 (May 18 maximum). If pound declines, support levels will be at 1.4320 (session’s minimum), 1.4275 and 14-month minimum at 1.4235 (May 19 minimum).
Analysts at Windsor Brokers Ltd claimed that GBP/USD is consolidating in the short-term above the year’s minimum at 1.4235. If the pair trades above 1.4273, it may rebound to 1.4517/47 zone. Never the less, in the medium term the outlook will be negative.

[COLOR="green"]SmartTrade: demand for yen grew due to the Korean conflict[/COLOR]
Japanese currency rose versus all 16 of its main competitors. It happened as the demand for yen as a safer currency went up due to the conflict between North and South Korea.
According to the group of 25 experts from different countries, a 1,200-ton South Korean ship was blown up by North Korean torpedo.
Economists at NTT SmartTrade Inc. believe that the news about the torpedo attack represents a geopolitical risk and this will make Japanese currency being bought as a refuge.
South Korea’s won declined versus all major counterparts. It lost 3% versus yen.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets [/COLOR]

[FBSanalytics]

[color=#009900]24.05.10

UBS AG: dollar’s becoming a growth currency[/color]
Analysts at UBS AG claim that during the next 10 years the greenback may be referred to as the growth currency. It will happen as the growth pace of US economy will be higher than Europe and Japan. As a result, the specialists see the change of dollar’s role from the haven currency to a riskier one with higher yield.
According to the strategists, dollar is likely to repeat its early 1980s and late 1990s advance moves when it was following the increases in stocks.
At the same time the euro zone seems to be weakened by the debt crisis, while Japan is only beginning to recover from deflation and the U.K. has to deal with its record high budget deficit over the next few years.
In addition, the Federal Reserve might be the first central bank among developed countries to lift up key interest rate. It’s predicted to be raised from с 0-0.25% to 0.5% by December that means giving up monetary stimulation of the economy.

[color=#009900]UBS AG: European banking system stability questioned[/color]
The single currency survived the biggest decline versus the greenback during the last 4 days. Euro also lost to all of its main competitors. According to analysts at UBS AG in Singapore, it happened as the Bank of Spain supported failing regional lender. As a result, the confidence about the stability of the European banking system weakened.
Never the less, the failed bank named CajaSur represents only 0.6% of Spanish banking assets, so the impact on investment flows might be minimal.
Strategists at BNP Paribas believe that this event doesn’t seem very significant and won’t be able to interrupt the move back into risk appetite that started at the end of last week.

[color=#009900]Rabobank: UK spending cut by 6.25 billion pound[/color]
British pound had the biggest advance versus the single currency in 2 weeks. It happened as the U.K.’s Chancellor of the Exchequer George Osborne announced the spending cuts by 6.25 billion pounds ($9 billion) in order to reduce the country’s huge budget deficit.
Strategists at Rabobank International in London claim that investors give support to the new government waiting to see how resolute its actions will be.
Broader measures will be reflected in an emergency budget scheduled for release on June 22.
 
[color=#009900]Standard Bank: pound will rise to 75 pence versus euro in 2011[/color]
Analysts at Standard Bank note that British pound may strengthen versus the single in 2010. It’s quite possible as the budget deficit won’t weight on UK economy as strongly as it will weight on the European one.
The specialists believe that if the euro zone’s debt crisis keeps developing it won’t mean the beginning of the same problems in the United Kingdom. Even if the country’s budget deficit is higher than in many European countries it’s only one deficit and it doesn’t mean the decline in Britain’s credibility and the cut of its credit rating.
Sterling is likely to rise versus euro to 75 pence in 2011.

[color=#009900]GBP/USD weekly forecast[/color]
The currency pair GBP/USD is likely to consolidate with week tending to rise until it gets above previously reached 14-month minimum at 1.4230.
Daily chart shows positive signals as the stochastic points at the growth staying at the oversold level, while the negative columns of MACD histogram are getting shorter that means that upward risks grew stronger. Resistance level lies at Tuesday’s maximum at 1.4520. If the pair breaks down through this level it may have its way opened for a slump towards May 11 minimum at 1.4716 and then to the reaction minimum at 1.5053 that’s at the moment close to the 55-day moving average.
If the pair keeps advancing, GBP/USD’s growth target will be at the reaction April 30 maximum at 1.5390 through which goes currently the 100-day MA. Never the less, the decline below the support at 1.4230 will make the pair decline in the short-term and aim it at the reaction March 30, 2009, minimum at 1.4108 and then to the psychologically important 1.4000 level.
In the middle-term the outlook for the pair seems to be rather negative until it stays below the April 15 reaction maximum at 1.5523. The weekly chart points at the decline while the 5-week MA lies below the 15-week MA and is going down. Getting below 1.4000 support will open the way to slumping the next days to March 11, 2009, reaction minimum at 1.3653 and then to January 23, 2009, minimum at 1.3498.

[color=#009900]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/color]

[FBSanalytics]

[COLOR="Green"]26/05/10

Mizuho: еuropean currency will drop to $1.10 by the end of 2010[/COLOR]
Analysts at Mizuho Corporate Bank Ltd claim that the single will keep declining in the long-term period unless the European Monetary Fund is established.
According to the specialists, 750 billion euro ($921 billion) rescue program provided euro zone’s monetary authorities with time necessary to organize such fund. The fund has to serve the goal of the European financial resources’ coordination in order to bailout the indebted member states. There’s a great need of the special system for that purpose, say the analysts. The market wants the euro zone to take clear and applicable measures of fiscal consolidation moving towards the common budget. Only such policy is able to stop the depreciation of euro, otherwise there’s the danger of monetary union’s collapse.
As the EU policy makers are unlikely to intervene until euro falls to the parity with the greenback, Mizuho forecasts that the European currency will drop to $1.10 by the end of 2010.

[COLOR="green"]Moody’s Investors Service: US has to cut the deficit[/COLOR]
Specialists at Moody’s Investors Service Inc. note that US government’s AAA bond rating may found itself in danger of downgrade if there will be no extra measures taken to cut potentially huge budget deficit.
As for the European debt crisis, it was positive for the United States as US Treasury market has become the safe haven greeting money inflows. The stable economic prospects of the country are based on its stable politics and growing fundamentals.
Never the less, according to the specialists, credit crisis and government spending in order to overcome its consequences deteriorated the country’s finance. As a result, the ratio of general government debt to revenue increased during the last 3 years nearly in 2 times exceeding 400%.

[COLOR="green"]Bank of Nova Scotia: loonie will fall to C$1.10 per US dollar[/COLOR]
Dependent on growth Canadian currency slumped to the 6-month minimum versus the greenback. It happened under the impact of equity and commodity markets’ decline. In addition the negative impact on loonie was provided by Spanish bank problems and the conflict between the two Koreas.
When investors increased demand for US dollar as a refuge from European crisis, Canada’s dollar depreciated in May by 5.8% against its US competitor. Then loonie managed to compensate its fall following the positive dynamics of North American stocks.
Strategists at Bank of Montreal in Toronto underline the high volatility of the market and now there these several factors against Canadian currency. Analysts at Bank of Nova Scotia in Toronto comment that loonie was gaining on the speculation oа rates’ hike. However, the current situation of uncertainty makes such actions very difficult. The specialists expect loonie to fall to C$1.10 per US dollar.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

[FBSanalytics]

[color=Green]

27/05/10

Commerzbank: GBP/USD survives short-term correction[/color]
British currency was going up during the Asian trade and got close to 1.4520/30 resistance zone. Technical analysts at Commerzbank claim that such move can be regarded as a short-term correction made as the investors’ mood became better.
If sterling climbs above 1.4531, it may rise further to 1.4780/1.4875 (February minimum) or even above 1.5000/50.
If GBP/USD declines below 1.4250, it would mean downward pressure to 1.4000 and then falling towards the 2009 minimum at 1.3500.

[color=green]The IMF: kiwi’s rate is overvalued by 10-25%[/color]
The International Monetary Fund claims that it’s likely that New Zealand’s dollar is overvalued by 10-25%. The organization states that the currency has to decline in order to diminish the country’s current account deficit.
According to the IMF specialists, New Zealand copes with the consequences of the global financial crisis more successfully than most other developed countries. It’s helped by the flexible exchange rate, high demand from Asia and the fact that there is no banking crisis. According to the forecasts, the country’s economy will gain 3% in 2010 and in 2011. Kiwi’s rate rose by more than 20% since the beginning of 2009.
New Zealand’s budget deficit deteriorated due to continuous income-tax reductions and spending initiatives and revenue prospects got down. To rebalance the country’s economy, kiwi has to survive s gradual decline.
The Organization for Economic Cooperation and Development supposes that New Zealand has to remove economic stimulus in the near future raising the benchmark rate from the record-low 2.5%.

[color=green]Westpac: Aussie won't get above US$0.8350[/color]
Australian dollar was rebounding today as the absence of negative news from Europe made investors more willing to take risks, say analysts at TD Securities. All in all, concerns connected with European debt crisis made Australian currency depreciate by more than 14% during the past month.
Never the less, strategists at Westpac recommend selling as the rate’s increasing. They claim that Aussie already reached US$0.8350 area for a few times this week but always failed to rise further.

[color=green]Saxo Bank: daily currency forecast[/color]
EUR/USD: analysts at Saxo Bank claim that EUR/USD can rise to 1.2265 or to 1.2350 before declining. Strong resistance will be found at 1.2135/50 area.

USD/JPY: possible to sell on the growth to 90.35 as the pair is expected to get down back to 89.80/90.
EUR/JPY: if the pair manages to get above 110.30/45, it will manage to rise to 111.45. Support is situated at 109.50 area.
GBP/USD: 1.4365 is acting as a support. If the pair rises above 1.4440, it will be advancing till 1.45.
AUD/USD: 0.8190/00 acts as the strong support. If the Aussie climbs above 0.8330, resistance level will lie at 0.84, while trading below that point would mean the decline to 0.8125.
USD/CAD: if the pair fails to overcome 1.0740, it may fall to 1.0550. Otherwise, it might rise to 1.0850.

[color=green]Mizuho: British pound’s rebounding versus US dollar[/color]
British currency was up versus the greenback for the first time in 4 days getting above from its March 2009 minimum. It happened as China claimed that it wasn’t reviewing euro holdings hiking the demand for assets denominated in the single currency.
The demand for US dollar as a safer asset reduced with increase in European and Asian stocks. In addition, sterling’s relative strength index against the dollar fell yesterday reaching the level signalizing an inevitable recovery.
Analysts at Mizuho Corporate Bank Ltd. in London claim that pound seems to be rising when risk aversion weakens. As a result, UK currency is likely to suffer from the debt crisis.

[color=green]USD/CHF formed descending triangle pattern[/color]
During the last 24 hours the greenback was trading in range between 1.5151 (yesterday’s minimum) and 1.1615 (daily maximum at the opening of Asian trade). When the European session began, USD/CHF retested support level at 1.1515.
The pair is currently trading at 1.1540.
If US dollar goes up, resistance levels will be at 1.1620/25 (May 24/26 maximums), 1.1695 (May 25 maximum) and 1.1720 (April 2209 maximum). If the pair declines, support levels will be found at 1.1515 (May 25/26 minimums), 1.1485 (May 24 minimum) and 1.1445 (May 21 minimum).
The hour chart shows the descending triangle pattern that may signal the pair’s decline. If USD/CHF gets down below 1.1516, it may fall to 1.1333.

[color=green]The Fed, Bullard: US will benefit from European crisis[/color]
St. Louis Federal Reserve President James Bullard claims that European debt crisis isn’t likely to have a negative impact on the United States. On the contrary, the official believes that American economy would be the one to win in this situation.

Thanks to the current problems in euro zone, US longer-term yields managed to decrease. The number of investors attracted by safer US assets increased and as a result the monetary inflows to the US economy went up.
He added inflation in the United States did not appear to be a problem and that any inflation risk would be over the medium term.

[color=green]ACM: US dollar may decline to 88.40 yen[/color]
The greenback went up from Asian session’s minimum at 89.80 getting above 90.40 in its trade versus Japanese yen. Recently the pair USD/JPY reached the maximal level 90.55 on its way to 90.65/70 area that is the top of the last 5 days trading channel.
Technical analysts at Advanced Currency Markets (ACM) still believe that US dollar is to move down to 88.40. The specialists place the main resistance at 90.80/85 area.
If the greenback goes up, resistance levels will be at 90.65/70 (May 24/26 maximums), 90.85/95 (May 19 minimums) and 91.10 (200-day MA). If the pair declines, support levels will be found at 89.70/80 (May 24/26 minimums), 89.55 (intra-day support) and 89.25 (May 25 minimum).

[color=green]BNP Paribas: euro may go below $1.20[/color]
Analysts at BNP Paribas SA claim that the advance of the single currency won’t last for a long time. The specialists expect that euro will get below $1.20 first time in more than 4 years.
Such negative forecast can be explained by the gap between the growth prospects for Europe and the United States. While the EU economy will suffer from budget cuts, US economic rebound’s gaining pace.

[color=green]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/color]

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[COLOR="Green"]Gaitame.com: dollar may decline to 90 yen[/COLOR]
Technical analysts at Gaitame.com Research Institute Ltd. believe that the greenback is likely to get down to 90 yen level. According to the specialists, this will happen as dollar may be stopped by the important resistance at 91.58 yen. On the other hand, if USD/JPY breaks above this level, it can climb to 92.30 yen.

[COLOR="Green"]Saxo Bank: daily currency forecast[/COLOR]
EUR/USD: analysts at Saxo Bank outline that the key level for EUR/USD lies at 1.2250. Trading below this mark can drive the pair to 1.2200. Resistance is situated at 1.2330.
USD/JPY: the pair is expected to rise to yesterday’s maximums at 91.55 area, so it’s recommended to buy at 90.40-90.75/80.
EUR/JPY: the pair isn’t likely to get above 112.25. If it declines below 111.30, it may decrease to test 110.80.
GBP/USD: the pair is expected to fall to 1/4435 support and then recover to 1.4540. If it breaks this support, it risks hitting 1.4380.
AUD/USD: the pair is thought to rise to 0.8470 and possibly 0.8550 getting up from the near-term minimum at 0.8355, so it’s necessary to buy Aussie above 0.8310.
USD/CAD: the trend for the pair is regarded as neutral. It’s expected to fluctuate between 1.0420-1.0500. The market’s looking forward to Bank of Canada’s statement.
[COLOR="Green"]
Commerzbank: GBP/USD may rise to 1.4724/98[/COLOR]
British currency went down from Friday’s maximum at 1.4610 consolidating at 1.4500 area during the Asian trade.
Technical analysts at Commerzbank claim that if GBP/USD manages to overcome resistance at 1.4612, it may rise to 1.4724/98 (38.2% Fibo retracement/minimums of the beginning and end of March).
If pound weakens, support levels will be found at 1.4262 (78.6% Fibo retracement of the 2009 slump) and 1.4228 (May minimum). If sterling fails here, this would mean dropping to the psychological level at 1.4000.

[COLOR="Green"]Bank of Tokyo-Mitsubishi: euro forecast’s reduced to $1.16[/COLOR]
Analysts at Bank of Tokyo-Mitsubishi UFJ Ltd. reduced its forecast for the single currency from $1.22 to $1.16 by the fourth quarter of 2010. The specialists also diminished the estimation of EUR/JPY from 116 to 103 yen per euro.
Even though euro may stop falling in the near term, the economists are negative on the European currency in the medium and long term.
Bank of Tokyo-Mitsubishi UFJ believes that the crisis euro zone is suffering from seems to be very serious harming the region’s economic growth. The downward revision of forecasts is explained by the high pace of euro’s depreciation. The European Central Bank is expected to keep interest rates very low for a long time period.

[COLOR="Green"]Dollar rose by 1.42% versus franc[/COLOR]
The first quarter pace of Switzerland's economic growth was surprisingly down. It could be possibly explained by the reduction of companies’ investment and government spending.
Swiss GDP gained 0.4% from the fourth quarter, while it was expected to show 0.7% increase.
The greenback climbed today by 1.42% versus Swiss franc. The pair USD/CHF is currently trading at 1.1712.

[COLOR="Green"]Euro’s approaching $1.21[/COLOR]
The single currency is declining today versus the greenback deepening its already biggest in 10 years monthly slump. It’s currently approaching 1.2100 level. Euro decline is caused by the fears that there are more writedowns at Europe’s banks and the tightening measures will have a negative impact on the European economy’s rebound.
The European Central Bank claimed yesterday that in 2010 euro zone banks may see another 90 billion euro ($110.4 billion) in net writedowns on loans and securities.
In addition, there was some negative data from Italy where the unemployment rose in April to 8.9% from 8.8% the previous month. Euro zone’s index of executive and consumer sentiment dropped from 100.6 in April to 98.4 in June.
Strategists at Quantum Global Wealth Management note that investors are now extremely bearish on euro. As a result, they will be able to start buying European currency only when it declined to its fair value.
[COLOR="Green"]
BNP Paribas: yen will fall to 110 yen per dollar by the middle of 2011 [/COLOR]
Analysts at BNP Paribas SA believe that Japanese yen is likely to become the funding currency in carry trade. It may happen as the country’s interest rates tend to be low in year time horizon as Japanese monetary authorities will be trying to prevent deflation. World’s economic growth and abundant liquidity will stimulate carry trade.
According to the specialists, yen will lose 21% falling to 110 per dollar by the middle of 2011. Japanese investors cut hedges on $2.9 billion foreign portfolios as global yield curves start to move sideways. The yield of benchmark Japanese bonds is thought to decrease in the coming year in comparison with many foreign securities. As a result, foreign markets will become more attractive for Japanese investors.
[COLOR="Green"]
On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

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[COLOR="Green"]02/06/10

J.P. Morgan: yen declines as Japanese Prime Minister resigns[/COLOR]
Japanese currency declined versus all of its main competitors. It happened as the country’s Prime Minister Yukio Hatoyama the leader of Democratic Party of Japan announced he would resign as the majority of Japanese population was dissatisfied as he didn't keep his promise to remove US military base from Okinawa.
As a result, investors stopped regarding yen as a refuge. Analysts at Gaitameonline Co. believe that political problems will harm yen’s status. However, strategists at Global Hunter Securities claim that although the market seems to be cautious, the demand for yen didn’t fall dramatically. As the most of attention will be still focused on the European debt crisis, yen’s decline will bring the currency to a more favorable level for purchasing, claims J.P. Morgan.

[COLOR="green"]CIBC: euro will fall to $1.18 in the third quarter[/COLOR]
Analysts at CIBC Monthly FX expect that the single currency will keep falling in the third quarter to hit 1.1800. This will happen under the negative impact of the debt crisis and the reduction of government spending.
The specialists forecast that after that euro may start to rebound gradually to 1.2000. As for the next year, CIBC predicts that the European currency will appreciate slightly to 1.22 in the first quarter, 1.24 – in the second and 1.30 – by the end of 2011.

[COLOR="green"]ANZ National Bank: kiwi rose versus Aussie[/COLOR]
New Zealand’s dollar reached week’s maximum versus its Australian counterpart as the country’s central bank is expected to raise this month key interest rate from the minimal 2.5% level. Australia’s rate is equal to 4.5%.
Strategists at ANZ National Bank Ltd. in Wellington claim that it’s likely that New Zealand’s monetary authorities will follow Bank of Canada that lifted the rates yesterday. The specialists note that investors are now stimulated to buy New Zealand’s dollar. In addition, New Zealand’s May commodity export price index set a record maximum rising by 30% over the past 12 months.
Never the less, New Zealand’s Prime Minister John Key doesn’t believe that kiwi will be able to outrun higher-yielding Aussie.

[COLOR="green"]Mizuho: pound strengthened versus US dollar[/COLOR]
British currency rose today getting to the maximal level in almost 3 weeks versus the greenback. It happened as British company Prudential Plc abandoned its $35.5 billion takeover of American International Group Inc.’s main Asian life-insurance unit.
Strategists at Mizuho Corporate Bank Ltd. claim that the failure of the largest transaction of such kind resulted in pound’s strengthening because sterling won’t be sold for foreign currencies.

[COLOR="green"]BNP Paribas: SNB interventions will affect higher-yielding currencies [/COLOR]
Analysts at BNP Paribas SA suppose that the efforts of Swiss National Bank to prevent national currency from appreciation versus euro can lead to the lowering of higher-yielding currencies.
If Switzerland’s central bank buys the single currency, this will absorb euro liquidity causing the drop of European bank stocks. As a result, there will be no way for investors but to stop commodity and high-yield trade.

[COLOR="green"]USD/CHF: comments[/COLOR]
The pair USD/CHF was trading yesterday with high volatility. Firstly, it bounced from the session’s minimum at 1.1525 to year’s maximum at 1.1730 and then slumped again losing 300 pips.
The rate returned today to the previous level between 1.1535 and 1.1590. The greenback is currently trading at 1.1530/40 area.
If US dollar is up, resistance levels will be found at 1.1730 and 1.1774. If the pair declines, support lies at 1.1449.

[COLOR="green"]USD/JPY: comments[/COLOR]
The greenback rose from Tuesday’s minimum at 90.55 versus Japanese yen and went above 91.75. The pair USD/JPY is currently trading at 91.90. If US dollar gets above this level, it may climb to 93.50. If the pair declines, important support will be at 91.60.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

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[COLOR="Green"]Standard Bank: yen won't be depreciated[/COLOR]
Analysts at Standard Bank Plc predict that yen won’t significantly decline after Yukio Hatoyama left the post of Japanese Prime Minister. Such assumption is made as the national currency wasn’t much affected when the leaders resigned in the past.
The specialists underline that investors keep avoiding risks preferring safer assets. As a result, the demand for yen won’t suffer much.

[COLOR="green"]BNP Paribas: SNB will start interventions at 1.4110[/COLOR]
According to strategists at BNP Paribas SA, the Swiss National Bank (SNB) is likely to keep intervening at the foreign exchange market to prevent franc’s excessive strengthening versus the single currency.
The specialists expect that the Switzerland’s central bank will be selling national currency versus euro when the franc is approaching the key technical level at 1.4110.

[COLOR="green"]Royal Bank of Scotland: euro can be used to finance carry trade[/COLOR]
Analysts at Royal Bank of Scotland Group Plc claim that the depreciation of commodity-currencies provides investors with possibility to buy them against euro and yen.
Although commodity currencies aren’t expected to start rising again soon, their current weak level can be used for carry trade versus European and Japanese currencies. The specialists note that as euro didn’t manage to follow the upward dynamics of US stock market, it can play the role of funding currency.

[COLOR="green"]Standard Bank: euro will decline to C$1.2230[/COLOR]
Strategists at Standard Bank Plc expect that euro will decline versus Canadian dollar getting down to C$1.2230. As a result, the specialists advise investors to sell the single currency versus loonie. The pair EUR/CAD is currently trading at 1.2720/30 area.
In addition, New Zealand dollar’s dollar is expected to climb versus the greenback to 70.60 U.S. cents, so Standard Bank also recommends starting kiwi purchases. The pair NZD/USD is currently trading at 0.6860 area.

[COLOR="green"]EUR/USD: comments[/COLOR]
The single currency rose from 4-year minimum at 1.2110 to European trade’s maximum at 1.2325. Euro is now declining again getting below 20-hour SMA at 1.2270. The pair EUR/USD is currently trading at area 1.2250/55.
If euro falls below 1.2235, the pair may survive a further decline to 1.2180/1.2200 and then to 1.2150 and 1.2110. To enter the uptrend the pair has to climb above 1.2285. In this case advance to 1.2310/30 is regarded as possible.

[COLOR="green"]Bank of Montreal: optimistic outlook for loonie[/COLOR]
Canadian dollar reached today the maximal level in more than 2 weeks trading versus its US counterpart. Loonie was helped by the 0.4% growth in oil price and 0.3% Standard and Poor’s 500 Index futures increase. All in all, Canada’s currency rose by 1.7% versus the greenback after the Bank of Canada lifted its interest rate to 0.5%.
Strategists at Bank of Montreal claim the increase in rates has certainly contributed to loonie’s strengthening. They are quite positive on the currency’s future dynamics expecting that tomorrow government report will show the advance of employment.

[COLOR="green"]US: jobless claims[/COLOR]
According to the data for the week before May 29, the number of initial jobless claims diminished by 7,000 and got equal to 453,000. The four-week average rose slightly to 459,000. As for continuing claims, they increased by 31,000 to 4.666 million at the week before May 22.
The Department of Labor figures show that the situation in the labor market didn’t get much better as the level of claims keeps being high.

[COLOR="green"]BNP Paribas: sell pound at its advance to $1.51[/COLOR]
British currency was rising today versus the greenback. Sterling was helped by the positive UK housing market data and advance in British stocks.
Nationwide Building Society announced that the average cost of a home rose in May by 0.5% to the maximal level in almost 2 years. British government managed to sell 2 billion pounds ($2.9 billion) of securities maturing in 2034. FTSE 100 Index extended by 1.7%. Analysts at Royal Bank of Canada in London note that there’s some slight evidence of the country’s economic recovery.
Specialists at BNP Paribas SA expect that pound may climb to $1.51. Never the less, the specialists believe that the data is not encouraging enough for making British currency rise in the long-term. As a result, they advise investors to use pound’s advance to sell sterling.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

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[COLOR="Green"]Commerzbank: the target of EUR/USD decline is at 1.2065[/COLOR]
The single currency didn’t manage to get higher than 1.2325 on Thursday. Technical analysts at Commerzbank note that EUR/USD is getting closer to its 4-year minimum at 1.2110 while the decline target is set even lower. Euro’s now trading versus the greenback at 1.2180 area.

According to the specialists, the pair may fall to 1.2065 level representing 38.2% Fibo retracement of the advance from 1985 to 2008 and further, to the psychological mark at 1.20.
In order to regain upward power European currency has to get above end of May maximum at1.2454. Main resistance levels are found at 1.2735/1.2850.


[COLOR="green"]Goldman Sachs: US payrolls will rise[/COLOR]
The greenback approached the 4-year maximum versus euro ahead of the employment report. It’s expected that US payrolls showed in May the most significant growth since 1983. According to the Bloomberg News survey, American economy added 536,000 jobs in May, while Goldman Sachs Group Inc. estimates this figure at 600,000.

Yesterday Kansas City Federal Reserve Bank President Thomas Hoenig offered to raise the country’s key interest rate to 1% by the end of the summer. Economists at Tokyo Tomin Bank Ltd are sure that the Federal Reserve will be the first G3 central bank to lift up rates and dollar is likely to benefit from this fact.

Analysts at Shinko Research Institute Ltd. regard the encouraging data as the signs of US economic improvement. They are looking forward to the inflow of capital to the United States.


[COLOR="green"]JPMorgan Chase: death cross and dubble bottom on AUD/USD[/COLOR]
Technical analysts at JPMorgan Chase & Co. in New York expect Aussie to fall to the year’s minimum versus the greenback as the currency formed death cross and double-top patterns.
Australian dollar’s 50-day MA went down this week below the 200-day MA. The same situation was observed in September 2008 when it slumped by 26% during 8 weeks. The only chance for the currency to overcome bearish pressure is to rise above resistance levels at 85.78 (February minimum) and 87.12 cents.

According to the specialists at Barclays Capital, Australian currency is likely to lose 9% in 3 weeks after the double-top figure that consists of November 16 and April 12 maximums and February 5 bottom. As a result, the analysts predict that Aussie will drop to 77 US cents. They claim that Australlian dollar is also negatively affected by the falling base metals prices.


[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets [/COLOR]

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[COLOR="Green"]BNY Mellon: euro will fall to 1.0500 in a year[/COLOR]
Analysts at BNY Mellon expect that euro will resume trading in downtrend during the rest of this year and the first half of 2011. European currency has already slumped from 1.50 zone at the beginning of December getting below 1.20 in June.
Even though the pace of decline may reduce, the single currency is likely to hit 1.1500 in the third quarter of 2010 and fall to 1.1000 by the end of the current year. As a result, in the first quarter of 2011 European currency will reach 1.0750 and depreciate to 1.0500 in a year.

[COLOR="green"]Telegraph: euro won't “live” more than 5 years[/COLOR]
According to the survey conducted by British newspaper Telegraph among 25 leading London economists, the single currency will exist no more than 5 years. 12 respondents project that euro won’t be able to survive this Parliamentary term, while 8 asserted it would and 5 didn’t have clear opinion.
The forecasts about euro’s life expectancy differ greatly. For example, Douglas McWilliams of the Centre for Economics and Business Research doubts that euro won’t collapse during 5this week, while Tim Congdon of International Monetary Research believes that Greece, Portugal and possibly Ireland may be excluded from the euro area. The final break-up may occur due to the antagonism between France and Germany.

[COLOR="green"]Bank of Tokyo-Mitsubishi UFJ: buy dollar, yen and franc[/COLOR]
Analysts at Bank of Tokyo-Mitsubishi UFJ Ltd. recommend investors to purchase the currencies that are thought to be the safest in the long-term – US dollar, yen and Swiss franc.
According to the specialists, governments’ efforts to reduce budget deficits through the process of fiscal tightening will have a negative impact on the world’s economic recovery.
Such assumption is confirmed by the current currency dynamics. Yen was up versus all its major competitors, the Dollar Index was strengthening for the seventh day in a row, while Swiss franc appreciated trading at less than 1.40 per euro for the second consecutive day.

[COLOR="green"]Standard Bank: franc can rise to 1.35 per euro in a month[/COLOR]
Swiss currency was trading close to its maximum versus euro at 1.3853. It happened as investors turned to safer assets awaiting the deepening and spreading of the European debt crisis.
Analysts at Standard Bank Plc in London claim that the Swiss National Bank won’t be able to do much to overcome bearish pressure on euro. It’s expected that Switzerland’s central bank gave up intervening in order to prevent franc from excessive rising. According to the specialists, Swiss franc can rise to 1.35 per euro in a month.
The pair EUR/CHF went down below the benchmark 1.40 level to trade at the moment at 1.3870/80 area.

[COLOR="green"]Nouriel Roubini: euro may drop to the parity with dollar[/COLOR]
According to Nouriel Roubini, professor at the New York University who predicted the financial crisis, the single currency may drop to the parity with the greenback.
The economist claims that the risk of the euro zone’s break-up can be regarded as high due to the high budget deficits. He believes that the decline of euro represents the only possible solution to save the euro area from collapse as it would allow European countries to raise their competitiveness.
In addition, Roubini claims that although austerity measures will send European economy into recession, they are inevitable for the survival of the monetary union.

[COLOR="green"]Swiss e Trade Strategy Team: USD/CHF will fall to 1.1590[/COLOR]
The greenback is falling versus Swiss franc from daily maximum at 1.1675 set during the Asian trade getting below 20-hour MA at 1.1625. According to the analysts at Swiss e Trade Strategy Team, US dollar may survive further decline to weekly pivot point at 1.1590.
If USD/CHF manages not to drop below 1.1590, resistance levels will lie at 20 hourly MA at 1.1625 and 1.1705. If the pair declines, support is at 1.1560/80 area representing 50 and 200 hours moving averages and today's daily pivot point.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets [/COLOR]

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[COLOR="Green"]Mizuho Corporate Bank: dollar may fall below 84.83 yen[/COLOR]
Technical analysts at Mizuho Corporate Bank Ltd. are bearish on USD/JPY. The specialists expect the greenback to fall below the minimal level since July 1995 at 84.83 yen.
According to Mizuho Corporate Bank, dollar is still staying within weekly Ichimoku chart that means that American currency keeps following the downtrend from 2007. The cloud’s baseline is situated this week at 89.94 yen. If US dollar gets down below 90 yen, it may lose much more.

[COLOR="green"]Westpac: euro will reverse at $1.16/20 and begin rising[/COLOR]
Analysts at Westpac Banking Corp. in Wellington claim that the single currency seems to be oversold. According to the specialists, euro entered strong support zone between $1.16 and $1.20 where it may reverse its trend and begin rising.
In addition the European currency’s relative strength index went down yesterday below the level of 30 that means that the pace of its decline was too high and it is very likely to switch upwards.

[COLOR="green"]RBC: euro will fall to $1.15 by the end of 2010[/COLOR]
Strategists at Royal Bank of Canada in Hong Kong expect the single currency to fall to $1.15 by the end of 2010. The forecast is based on the market’s expectations that the Federal Reserve may lift up rates faster than the ECB.
According to Bloomberg survey, ECB won’t conduct any actions at this direction until the second quarter of 2011. At the same time Ben Bernanke says that the Fed will raise its key interest rate from the minimal level before the US reaches full employment or inflation gets higher.
Eisuke Sakakibara, the former Ministry of Finance official, believes that the European currency may decrease by 20% versus the greenback and drop below 100 yen during the next few months. The economist supposes that euro’s decline will resume as investors are still worrying that the situation in Europe will worsen.

[COLOR="green"]BNP Paribas: euro will fall to $1.08 by the end of the year[/COLOR]
Analysts at BNP Paribas believe that the single will keep declining until the end of 2010 even though this process is going to be slower than in the first half of the year.
The specialists set euro’s targets at 1.2200 at the end of the second quarter, 1.1600 in the third quarter and 1.08 at the year’s end.
As for the near-term period, BNP Paribas is also bearish on euro despite the slight rebound that the pair EUR/USD is showing now. The analysts expect euro to decline to $1.1645 under the negative influence of concerns that Greek debt crisis will continue to spread over euro-zone borders affecting Hungary.

[COLOR="green"]AUD/USD: comments[/COLOR]
Australian currency went down from last week’s maximum at 0.8500 and was supported at 0.8080/8100 zone.
Even though Aussie attempted to get higher, it didn’t manage to overcome resistance at 0.8215 area. The pair AUD/USD is trading flat not far from the 11-month minimum at 0.8065. The pair remains trapped between downtrend lines on the upside and May minimums and the 0.8000 psychologically important level on the downside.
If the pair declines, support levels are at 0.8151, 0.8127 and 0.8087. If Aussie goes up, resistance levels are found at 0.8197, 0.8234 and 0.8266.

[COLOR="green"]Estonia will enter euro area[/COLOR]
European finance ministers are for Estonia entering the euro zone without regarding that the country will have to make many efforts in order to restrain the inflation. Estonia that used to be Soviet republic and joined the European Union in 2004 will begin to use the single currency since January 1 2011.
The country’s inflation rate was equal to 2.5% in April and this figure is projected to rise in the coming years as Estonia’s economic growth pace is above euro area’s average. Estonia’s economic output is only 14 billion euro ($17 billion), so it will be the second-smallest economy of the area ahead of Malta.
As a result, the EU demonstrates that the Greek crisis won’t stir the currency union’s enlargement to the east. Yesterday’s endorsement will be reviewed by government leaders at a June 17 summit, with a formal decision by finance ministers on July 13.

[COLOR="green"]Mizuho Corporate Bank: investors improved their attitude to pound[/COLOR]
British currency was rising versus the greenback in the first half of today’s trading day and approached the maximal level against the single currency since November 2008. It was helped by the positive economic data according to which retail spending rose in May. Sales at stores open at least a year added 0.8% from the previous year while they declined by 2.3% in April.
The market was encouraged to expect that the country will be able to deal with budget deficit more successfully than its European neighbors, claim analysts at Mizuho Corporate Bank Ltd. in London.
Today Britain is planning to sell 1.1 billion pounds of inflation-linked bonds maturing in 2027. Prime Minister David Cameron claimed yesterday that the spending cuts shouldn’t be postponed. He also announced that interest payments may reach 70 billion pounds ($101 billion) in five years.

[COLOR="green"]BNY Mellon: pound declined due to Fitch Ratings comments[/COLOR]
British currency was losing to its major counterparts as demand for safer assets grew after Fitch Ratings noted that the country’s facing serious fiscal problems to be solved.
The greenback rebounded versus sterling as Federal Reserve Chairman Ben Bernanke announced that US economic rebound won’t be very rapid.
Currency strategist at Bank of New York Mellon Corp. in London believe that the market was very fast reacting on Fitch’s information that means that it’s extremely sensitive to all developments of the debt issue. According to the specialists, the market’s still dominated by the uncertainty.

[COLOR="green"]EUR/CHF: comments[/COLOR]
The single currency set a new absolute minimum trading versus Swiss franc at 1.3782 ruining its trading channel of the last 2 days. The pair declined from May 31 maximum at 1.4590 to be trading currently at 1.3820 area.
If the pair EUR/CHF declines, support levels will be at 1.3785 (session’s minimum), 1.3760 and 1.3730. If euro goes up, resistance levels will be found at 1.3845 (previous absolute minimum), 1.3910 (session’s maximum) and 1.3940 (June 7 maximum).

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets [/COLOR]

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[COLOR="Green"]HSBC: AUD/USD forecast dropped[/COLOR]
Analysts at HSBC Plc dropped their forecast that Aussie will rise to the parity with the greenback by the end of 2010. Last year Australian currency managed to gain 28% following Chinese economic growth. Now China that’s Australia’s main trade partner is acting in order to restrain property prices that jumped in April by 12.8%.
Chinese government rose mortgage rates and the payment requirements. HSBC expects significant slowdown in the development of this market. If China’s property bubble deflates, this may harm the banks of South Pacific region. According to the specialists, Aussie will trade at 85 US cents by December.

[COLOR="green"]Saxo bank: daily currency forecast[/COLOR]
EUR/USD: analysts at Saxo Bank advise investors to buy the single currency from 1.1920 to 1.1960. According to the specialists euro may rise to 1.2040.
USD/JPY: it’s necessary to sell dollars from 91.50 to 91.75 as the pair is likely to fall to 90.80.
EUR/JPY: the trend for the pair is regarded as neutral.
GBP/USD: sterling can rise to 1.4550, so it’s recommended to but from 1.4430 to 1.4474.
AUD/USD: Aussie may advance to 0.8360, so it’s advised to but from 0.8260 to 0.8286.
USD/CAD: it’s necessary to sell dollars from 1.0470 to 1.05 as the pair is likely to fall to 1.04.

[COLOR="green"]UBS AG: SNB raise foreign-currency reserves by more than half in May[/COLOR]
According to the data from the Swiss government, Swiss National Bank bought last month foreign-currency reserves for 78.8 billion Swiss francs ($67.7 billion) increasing them by more than half to prevent the excessive appreciation of the national currency against euro. Analysts at UBS AG estimate such interventions as the biggest ever conducted by any country except for China. Switzerland has trade and fiscal surpluses and its debt is equal only to 40% of GDP. It’s necessary to point out that Chinese economy is 33 times bigger than the Switzerland’s one.
After conducting such huge interventions in May the country’s central bank has chosen not to intervene this month. As a result, the single currency hit the record minimum versus franc at 1.3744 francs.
Never the less, economists at Deutsche Bank in New York believe that even the positive indicators aren’t sufficient to explain such high demand for Swiss currency claiming that Switzerland looks attractive mainly in contrast with highly indebted euro zone. While the absence of SNB’s intervention would make import prices slump and rise deflation risks, intervening with interest rates close to zero is likely to provoke inflation even despite the fact that Swiss economy is growing.

[COLOR="green"]Mizuho Corporate Bank: “falling wedge” on EUR/USD[/COLOR]
The single currency keeps consolidating in narrow range below 1.2000 in its trade versus the greenback. Technical analysts at Mizuho Corporate Bank claim that the pair EUR/USD is forming a “falling wedge” with minimal volumes.
According to the specialists, 9-day MA interflows the top of the "wedge", while 26-day average is declining.
The analysts place resistance at 1.1978, 1.2010 and 1.2025. Support levels are set at 1.1900, 1.1876/1.1868 and 1.1850/1.1826.

[COLOR="green"]UBS AG: demand for Swiss franc will stay high till 2020[/COLOR]
Analysts at UBS AG expect that high demand for Swiss franc will define its upward dynamics up to 2010 and 2020. The specialists believe that successful performance of Swiss economy led by rising exports to Germany will support Swiss currency providing it a significant advantage in comparison with euro weakened by euro zone’s debt crisis.
Franc gained 7.1% versus the single currency since the beginning of 2010 and is regarded now as a safe currency that came after the German mark. In May Swiss National Bank’s interventions raise the country’s foreign-currency reserves to 232.4 billion Swiss francs ($202 billion) that helped to increase its authority and influence.

[COLOR="green"]USD/JPY: comments[/COLOR]
The greenback recovered from Wednesday’s minimum at 90.90 to the Asian session’s maximum at 91.60 trading versus Japanese yen. Since that time USD/JPY kept fluctuating in narrow range between 91.55 and 91.25.
The analysts expect dollar may decline to 90.36 during the next sessions and then go up to 92.00.
If the pair goes down, support levels will be found at 91.05, 90.96 and 90.83. If the pair increases, resistance levels will lie at 91.68, 92.07 and 92.20.

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[COLOR="Green"]Tokyo-Mitsubishi UFJ: dollar may rise to 92 yen[/COLOR]
Analysts at Tokyo-Mitsubishi UFJ Ltd believe that the greenback is likely to break out of a “triangle” it has formed since the first week of May trading versus Japanese yen after it managed to rebound in March and April. The specialists expect US dollar to rise to 92 yen.
The maximums and minimums of the pair’s rate create ascending and descending trend lines that tend to meet in one point this month. As a result, support line becomes stronger limiting the downward moves.
In addition, the cloud on the daily ichimoku chart can’t be seen from June 10 to June 21 that means that dollar is trading just below facing weak resistance.
Saxo bank: daily currency forecast
EUR/USD: although the trend for the pair is regarded as neutral it’s likely to break out. As a result, the analysts recommend buying if the single currency gets above 1.2148 and selling if it falls below 1.2093. According to Saxo Bank, upward dynamics is more possible.
USD/JPY: the trend for the pair seems to be neutral.
EUR/JPY: although the trend for the pair is regarded as neutral it’s likely to break out. As a result, the analysts recommend buying if the single currency gets above 111.28 and selling if it falls below 110.46. According to Saxo Bank, upward dynamics is more possible.
GBP/USD: the specialists see the beginning of “morning star” formation. In the near-term the trend also seems to be neutral. Saxo Bank believes that the pair may reverse to the downtrend over the weekend.
AUD/USD: Aussie may advance to 0.8490, so it’s advised to but from 0.8380 to 0.8400.
USD/CAD: it’s necessary to buy dollars from 1.0300 to 1.0334 as the pair is likely to advance to 1.04.

[COLOR="green"]Commerzbank: euro may rise to 1.2440/1.2775[/COLOR]
European currency went up from the 4-year minimum getting yesterday above 1.2100. The maximal level of today’s session was set at 1.2148. As a result, technical analysts at Commerzbank claim that we can observe the destruction of the downtrend.
The specialists note that there are some bullish signals for the short-term period. For example, daily RSI has diverged on its way to the new minimum and the long-term MA reversed so far, so it’s possible to await the corrective rebound of EUR/USD. According to Commerzbank, the pair may rebound to 1.2440/1.2775 zone.
However, when the single currency reaches this levels it is likely to drop again and continue declining, believe the analysts. Commerzbank places intraday support at 1.2000, 1.1960 and recent minimum at 1.1876.

[COLOR="green"]Barclays Bank: Australia’s and New Zealand’s dollar declined[/COLOR]
Australia’s and New Zealand’s dollars were down decreasing weekly advance versus the greenback. It happened as Chinese inflation pace turned out to be the highest in 19 months with consumer prices gaining 3.1% from the level of 2009 while analysts forecasted only 3% increase.
As a result, the country is expected to take some measures to cool its economy. Such assumptions affect investors’ demand for riskier assets harming Aussie and kiwi.
Strategists at Barclays Bank Plc in Tokyo claim that China’s inflation data can make its monetary authorities to raise interest rates or revaluate yuan earlier than it was expected. According to the specialists, the risk aversion in this case will get higher.

[COLOR="green"]GBP/USD: comments[/COLOR]
British currency went up from Monday’s minimum at 1.4345 to the week’s maximum at 1.4760. However pound failed at this level and declined by 100 pips falling below 1.4700 to session’s minimum at 1.4660 area.
The analysts believe that the pair GBP/USD set a temporary top below the important resistance at 1.4780 and is likely to fall to 1.4240 and then to 1.3760. If the pair declines support levels will be found at 1.4600 and 1.4490/4500.
The advance of British Output PPI released today was equal only to 0.3% in May compared with 0.6% forecasted increase.

[COLOR="green"]BofT-Mitsubishi: euro won't be able to rise in the long term[/COLOR]
The single currency strengthened versus the greenback and yen as the market’s concerns about the euro zone’s debt crisis have eased.
Euro was supported by the stocks’ advance during the fourth consecutive day that diminished the demand for the less risky assets. In addition European Central Bank President Jean-Claude Trichet announced yesterday that offerings of unlimited cash and will government-bond purchases will continue as the measures against the crisis.
Strategist at the Bank of Tokyo-Mitsubishi UFJ Ltd note that although that euro quickly reacted on this positive news the data is not enough to ensure euro’s growth in the longer term.
Analysts at Brown Brothers Harriman in New York claim that one more positive factor for the European currency was German court's rejection of a challenge to Germany's contribution to the nearly $1 trillion European Union-International Monetary Fund-led rescue plan.

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[COLOR="Green"]Okasan Securities: demand for yen went down[/COLOR]
Japanese currency was down against all 16 of its main competitors for the third consecutive day due to the evidence of the world’s economic rebound.
The index of US consumer confidence rose from 73.6 in May to 75.5 this month that is the maximal level since January 2008. As a result, Asian stocks gained and investors reduced their demand for yen as a safer asset, claim analysts at Okasan Securities Co. in Tokyo.

[COLOR="green"]UniCredit: euro’s correction won’t last long[/COLOR]
The single currency continued strengthening versus the greenback and yen on the expectations of industrial output advance that is released today. According to the survey performed by Bloomberg News, production rose by 0.5% in April from March.
Strategists at Brown Brothers Harriman & Co. claim that euro’s correction is likely to continue while there is no negative news about Europe. However, analysts at UniCredit in Milan underline that market sentiment remains quite fragile and there is quite a lot of potentially discouraging news.
Specialists at UBS AG believe that euro rate will stay under the negative impact of euro zone’s debt crisis, the inability of regional leaders to improve sentiment towards euro and different growth rates of the European countries. Economists at Insight Investment Management Ltd. in London are still bearish on the European currency preferring Swiss franc and Japanese yen.

[COLOR="green"]Commerzbank: euro will rebound to 1.2445/1.2570[/COLOR]
European currency managed to climb from the 4-year minimum at 1.1875 verus the greenback last Monday ending the week above 1.2100. Technical analysts at Commerzbank forecast that the pair EUR/USD may show upward correction to 1.2330 and 1.2445.
The specialists expect that euro will rebound to 1.2445/1.2570 zone representing long-term pivot and 50% retracement. Then the short-term trend is likely to reverse and begin declining. Commerzbank advises to buy at 1.2045 and 1.2000 placing stops at 1.1945.

[COLOR="green"]AUD/USD: comments[/COLOR]
Australia's currency rose from its minimal level at 0.8080 hit on June 7 getting above 0.8505 during today’s Asian trade. The pair set a month maximum at 0.8580 consolidating above 0.8550 at the beginning of the European session.
Technical analysts expect that the pair AUD/USD will keep moving upwards. Hourly trend is going up with support at 0.8460 and daily trend is also sideways up with support at 0.8165.

If the rate goes up, resistance levels will be found at 0.8585, 0.8655 and 0.8735. If the pair declines, support levels will be at 0.8500, 0.8425 and 0.8345.

[COLOR="green"]BIS: investors don’t believe in euro[/COLOR]
The economists at the Bank for International Settlements claim that the euro area’s debt crisis resulted in the situation when investors begin to react bearish even on the positive economic data. For example, although US non- farm payrolls added 100,000 jobs in April, S&P 500 Index decreased by 1.5% on the day.
Investors became focused on the economic growth of the periphery European countries worrying that public debt and fiscal tightening will have negative impact on it. Spain got under pressure when Fitch Ratings decreased its AAA rating due to the dim growth forecasts and high extra bond yield in comparison with German ones.
The single currency hit its 4-year low versus the greenback on June 7, while the world’s financial markets lost more than $4 trillion.
World Bank claimed on June 9 that some European nations risk a “double dip” economic slowdown if the crisis won’t be stopped.

[COLOR="green"]GBP/USD: comments[/COLOR]
British currency declined on Friday from its maximum at 1.4760 to 1.4505. Today, however, pound managed to rebound and rose above 1.4645 representing the daily pivot and reaching 1.4760 and compensating previous losses.
The analysts believe that the pair survives the third part of consolidation and that it will be moving upwards to 1.4760 and 1.5050. Important support is placed at 1.4620.
If sterling gets above 1.4760/70 (June 10/2 high), resistance levels will lie at 1.4815 (intra-day level) and 1.4845. If the pair declines, support levels will be found at 1.4555/65 (intra-day level/ June 7 maximum), 1.4505 (June 10/11 minimums) and 1.4450/60 (intra-day levels).

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[COLOR="Green"]Forecast Pte: euro will rise to $1.2672[/COLOR]
Technical analysts at Forecast Pte in Singapore expect that the single currency may climb to the 3-week maximum versus the greenback.
According to the specialists, last week euro rose to $1.2097 level that represents the upper trend line of the descending wedge linking the maximums of May 21 and June 3, while the wedge itself is formed of group of lower highs and lows.
The destruction of the wedge has to be regarded as the bullish signal, so the European currency is thought to extend to May 21 maximum at $1.2672.

[COLOR="green"]Saxo Bank: daily currency forecast[/COLOR]
EUR/USD: the analysts place key support at 1.2190/95. If the single currency gets below these levels, it may fall to 1.2140. Otherwise, the pair will be trading at in range between 1.22 and 1.23.
USD/JPY: the trend for the pair seems to be neutral and the pair is trapped at the area of 91.00/30.
EUR/JPY: if euro gets below 111.55, it is likely to extend its decline to 110.70/80. All in all, the trend rests neutral and we’ll see the pair fluctuating in range between 110.80 and 112.20.
GBP/USD: if pound falls below 1.4720, it may continue decreasing to 1.4670. At this level it will be necessary to buy looking forward to the pair’s advance to 1.48. Put stop below 1.4620.
AUD/USD: the trend for the pair is regarded as neutral. Aussie would stay in range between 0.8540 and 0.8600.
USD/CAD: the analysts place key support at 1.0295. If the greenback gets below this level, it may fall to 1.0225. Otherwise, the pair will be trading at in range between 1.0290 and 1.0350.

[COLOR="green"]Commerzbank: pound will grow above 1.5001 versus US dollar[/COLOR]
British currency fell to 1.4500 zone on Friday, then recovered to 1.4800 yesterday getting into resistance range at 1.4770/1.4870 where double Fibonacci and the February minimum are found.
Technical analysts at Commerzbank believe that pound may get out of this area climbing to 1.5001 level that represents 6-month resistance line or even upper to 1.5240/50 area containing the double Fibonacci retracement.

[COLOR="green"]Moody’s: Greece's rating cut[/COLOR]
Moody’s Investors Service reduced Greece’s credit rating to non-investment grade from A3 to Ba1. The country is trying to deal with its huge budget deficit. That means that the risk of Greek default is regarded to increase although it’s still not high and general outlook seems to be stable, claimed the specialists.
Currency strategists at UBS AG in Singapore keep targeting euro at $1.15 in 3 months. They note that austerity measures conducted by Greece in order to receive 110 billion-euro ($134 billion) aid package from the European Union and the International Monetary Fund will harm economic growth. As a result, the current situation won’t be able to improve for a long time.
Strategists at Commerzbank AG in Frankfurt claimed that the downgrade made invertors return to their bearish view on the single currency breaking its upward movement.

[COLOR="green"]Nomura: Australia's rates won't be lifted until the yearend[/COLOR]
Australia’s currency declined from June 14 maximum at 0.8666. It happened due to the expectations that the Reserve Bank of Australia won’t change interest rates until at least the fourth quarter strengthened after the central bank claimed that euro area’s debt crisis would undoubtedly affect the growth of world’s economy.
Currency specialists at HiFX underline that risk aversion has high impact on investors. According to the economists, huge budget deficits of European countries are unprecedented that increases uncertainty about how shortfall problems will be solved.
Analysts at Nomura Australia Ltd. in Sydney claim that the RBA will be looking forward to second-quarter CPI to make the decision about rates. As a result, the specialists are sure that interest rates won’t be lifted until August or even the yearend.
New Zealand’s dollar was also down for the first day in four following the downward dynamics of Asian commodity stocks that fell after Greece’s credit rating was reduced.

[COLOR="green"]Citigroup: Britain has more chances to cut deficit that euro zone[/COLOR]
According to British new budget forecasting office (Office for Budget Responsibility, OBR) created by Prime Minister David Cameron's new coalition government, in the next few years the country will need to borrow less than expected. Never the less, long-term growth is also thought to be less significant than it was estimated before.
Growth forecasts were cut from the previous government's 3.25% to 2.6% for 2011. In 2012 and 2013 UK growth rate will be equal to 2.8% and 2014 – to 2.6%, while March projection stated 3.5% advance for each of these three years.
As for the improved borrowing forecast, the OBR decreased total net borrowing expectations by £23 billion ($33.45 billion) to a total of £544 billion for the five financial years to the spring of 2015. Such assumptions are explained by anticipated stronger tax receipts and a lower unemployment rate.
Economists at Citigroup believe that the main problem for the United Kingdom is fiscal sustainability. The forecast showed that the country has more chances to solve this issue than the indebted European nations.

[COLOR="green"]Euro and pound are gaining[/COLOR]
European markets jumped up and euro and pound are rising getting towards yesterday’s maximums. It’s happening despite Moody's downgrade of Greece's sovereign debt and negative euro area economic data with the ZEW economic expectations Index losing almost 20 points to 28.7. British Consumer prices’ rose in May only by 0.2% compared with expected 0.3% monthly increase.
The single currency was supported at 1.2165 level and climbed above 1.2250 area trading versus the greenback. Sterling advanced from today’s minimum at 1.4680 to 1.4750 area.

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[COLOR="Green"]Jim Rogers: buying euro and oil[/COLOR]
Well-known investor Jim Rogers confessed today that he bought the single currency on Friday and Monday making this decision on the euro’s rebound that followed yesterday stock markets growth.
According to the specialist, reforms should cover not only the country level, but also the level of the entire union. In addition, Rogers recommended buying oil for the long-term period as the demand for it will increase due to the reduction of drilling opportunities since US administration is thinking about restricting offshore operations after huge BP oil spill.
Euro managed to reach 2-week maximum versus the greenback at the beginning of the European session. Never the less, investors were worried about the situation in Spain and, as a result, Europe’s authorities had to reassure the market that the EU, the International Monetary Fund and the US Treasury weren’t regarding the possibility of providing a credit line for the country. Economist Nouriel Roubini claimed yesterday that Spanish crisis could be much more dangerous than the Greek one as Spain is one of the four largest EU economies with such serious problems as 20% unemployment.

[COLOR="green"]Russian may add Australian and Canadian dollars to international reserves[/COLOR]
Russia may is likely to start using Australian and Canadian dollars for its international reserves that were equal to $458.2 billion on June 4 being the third biggest in the world. Such decision may be explained by high volatility of the greenback and the single currency.
Loonie and Aussie aren’t usually regarded as international reserve currencies as they have limited liquidity. However, these currencies showed the best results during the last year. They are connected to the demand for raw materials that rose on the expectations of global economic recovery. Canadian dollar added 10% versus US dollar and 23% versus euro, while Australian dollar – 8.6% and 21% respectively. Ruble advanced by nearly 11% against euro and 0.2% versus dollar.
In November Russian reserves consisted of 47% US dollars, 41% euro, 10% sterling and 2% Japanese yen. In 2006 the share of American currency was higher, at 50%, while euro represented 40% and pound and yen together accounted for 10%. The country was trying to diversify its reserves as the greenback weakened versus euro by 34% during 2.5 years. The current situation is quite opposite with the European currency that decreased by 22% since November 25 as investors lost confidence in it because of euro zone’s debt crisis. According to last month forecast of BNP Paribas, the greenback will represent more than half of Russia’s foreign currency reserves by the end of 2010.

[COLOR="green"]BNP Paribas: euro’s growth was a correction[/COLOR]
European currency declined versus the greenback as investors were worrying about debt crisis affecting Spain. There was a speculation that the country would be provided with a credit line for 250 billion euro ($307 billion).
Strategists at BNP Paribas in London underlined that euro wasn’t able to keep trading above $1.235 level that indicated its ability to grow. According to the specialists, previous rebound of the single currency is nothing more but correction and the downtrend is going to continue in the near term.
Currency analysts with Danske Bank A/S in Copenhagen expect euro to fall to $1.15 in three months.

[COLOR="green"]USD/JPY: comments[/COLOR]
The greenback rose from yesterday’s minimum at 91.05 and reached 91.80 at European opening. Then the pair USD/JPY reversed again declining below 91.50. As a result, dollar was trading today in range between 90.85 and 92.10 versus yen.
The pair is likely to advance when it’s above 91.08. If dollar manages to rise above 92.02, it may head towards resistance at 92.90.
If US dollar keeps moving down, support levels will be found at 91.05 (June 15 minimum) and 90.85 (June 8 minimum). If the rate goes up, resistance levels will be at 91.80 (session’s maximum), 92.10 (June 7/14 maximums) and 92.25/35 (intra-day levels).


[COLOR="green"]Bank of Nova Scotia: CAD declined on the risk aversion[/COLOR]
Canadian dollar went down from its maximal closing level in more than a month at C$1.0254 affected by the decline of demand for riskier assets. Strategists at Bank of Nova Scotia in Toronto note that risk aversion is getting higher with the advance of yields of indebted European nations.
Loonie that’s depending on the economic growth was as usual following global equities dynamics. Futures on Standard & Poor’s 500 Index that lost 0.4%. In June Canadian dollar rose by 1.5%, while S&P 500 Index increased by 2.4%.

[COLOR="green"]EUR/USD: trade comments[/COLOR]
At the beginning of the week it was thought that European currency’s trend versus the greenback had reversed upwards. The main bullish activity was provided by central banks such as Russian and Swiss ones.
Today traders were selling at 1.2340 and 1.2315 accusing central banks of unsuccessful attempts to place 1.2360/65 stops for the following decline. Now the stops are situated below 1.2250.
Some pessimistic factors that investors previously ignored have become influential on the price, for example, investors are greatly concerned by the fact that Spain may need financial help.

[COLOR="green"]UBS: demand for yen increased[/COLOR]
Japanese currency was gaining versus the majority of its counterparts as investors raise demand for it as a safer asset. It happened due to the concerns about euro zone’s debt crisis and the expectations that the pace of US economic rebound will reduce.
Strategists at UBS AG in Stamford claim that bad news have now much stronger impact on the market that the positive ones.
US dollar is down against yen for the third consecutive day. Housing starts decreased by 10% showing the most significant decline since March 2009. Building permits surprisingly dropped to one-year minimum.


[COLOR="green"]George Soros: euro area will face recession in 2011[/COLOR]
According to well-known billionaire investor George Soros, euro area will face recession in 2011. The economist believes that the crisis is the fault of European lawmakers. The measures conducted to fight the crisis resulted in exclusive circle.
Mistakes made during the launching of the single currency become now clear. Soros thinks that euro crisis may provoke the crisis of the whole European Union. The main problem is in absence of adjustment mechanism or plan letting the countries leave the European Economic and Monetary Union.
Germany made other countries adopt the mechanism of using $1 trillion to bailout euro zone economies and forces the rest of the euro region to agree to its standards of trade surplus and high savings for all European countries. However, it’s not possible to act as a lender and have trade surplus without another country to get a deficit. Here is the danger of the current situation: budget discipline intrusion in time when demand is insufficient and banking system remains weak leads to the exclusive circle, notes Soros.
Germany in this case won’t have any problems as weak euro will help the economy, but the rest of Europe will suffer from the long-term stagnation. European banking system will have to deal with confidence crisis. Soros doesn’t eliminate the possibility of euro zone’s collapse.

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[COLOR="green"]Saxo Bank: daily currency forecast [/COLOR]
EUR/USD: the pair may rise above 1.2350 or fall below 1.22. The target level is set at 1.2420. It’s recommended to stop below 1.23 and 1.2165 respectively.
USD/JPY: resistance lowered to 91.40, while the next support is found at 90.85.
EUR/JPY: if euro gets below 111.90, it is likely to extend its decline to 111.50. The pair will be fluctuating in range between 111.50 and 112.50 making only slight bias.
GBP/USD: if pound falls below the near-term support at 1.4680, it may continue decreasing to 1.4615. Otherwise, the pair will be trading in range between 1.4680 and 1.4750.
AUD/USD: the trend for the pair is regarded as neutral. The next support for Aussie is found at 0.8575, while below this level the pair would fall to 0.8510 or stay in range between 0.8575 and 0.8665.
USD/CAD: the trend for the pair is regarded as neutral. The greenback found the near-term base at 1.0225 and will be trading again between it and 1.03.

[COLOR="green"]Citigroup: growth pace of Australia’s economy will decrease[/COLOR]
Australian currency declined from its 4-week maximum versus the greenback reflecting the reduced demand for higher-yielding assets that fell as Asian equities and US stock futures were down. Commodities’ prices including crude oil’s and copper’s also decreased affecting investors’ appetite as raw materials represent more than half of Australian exports.
According to Citigroup forecast, the growth pace of Australia’s economy will decrease from 3.5% to 3.25% in 2010. The specialists believe that the central bank will raise interest rates only once more in 2010 as inflation won’t exceed the central bank’s target.
New Zealand’s dollar managed to compensate its former decline on the expectations that the country’s central bank will lift up interest rates at its second meeting in July. Strategists at ANZ National Bank Ltd. in Wellington believe that the increase in the Reserve Bank of New Zealand’s rates would cause the restart of carry trade.
In June Australian dollar added 1.7% versus US dollar, while New Zealand’s currency strengthened by 2.5% as concern over Europe’s debt crisis eased. The key interest rate is equal to 4.5% in Australia and 2.75% in New Zealand.

[COLOR="green"]Goldman Sachs: the SNB left the key rate at minimum[/COLOR]
The Swiss central bank (SNB) decided to leave its key interest rate at 0.25% in line with economists’ forecasts.
In addition, the SNB loosened its policy that previously focused on preventing franc from excessive appreciation versus the single currency as the deflation risk seems to be down. Switzerland’s monetary authorities claim that even though strong franc affects the country’s exports, the advance of the national currency is compensated by the growth in foreign demand. Franc gained 8% versus euro during the past six months.
Economists at Goldman Sachs Holdings Inc. in Frankfurt note that it’s possible to see the need of rate increase in terms of the current Swiss levels inflation and economic growth. However, European environment makes it necessary for the SNB continue monetary easing.
According to the forecast of the central bank, Switzerland’s economic growth will be equal in 2010 to 2%, while the average inflation level – to 0.9%.

[COLOR="green"]Mizuho: euro should rise above 1.2300[/COLOR]
European currency rose from last week’s minimum at 1.1875 and reached 1.2355 level on Wednesday.
Technical analysts at Mizuho claim that if the pair EUR/USD rises above 1.2300, it would be much easier for the pair to show further advance. The specialists forecast that the single currency will consolidate in its current trading area. If the week is closed above 1.2300, euro will rise higher.
If euro’s rate goes up, resistance levels will be found at 1.2338, 1.2355 and 1.2388. If the pair declines, support levels will be 1.2255, 1.2200 and 1.2168/1.2140.

[COLOR="green"]Pimco: the Fed won't change rates in the long term[/COLOR]
Economists at Pacific Investment Management Co. believe that the Federal Reserve will leave its key interest rates at the current levels for a very long period of time. According to the specialists, global demand will be harmed by the euro zone’s austerity measures and deflationary fiscal policy.
Pimco managing $1.1 trillion of assets expects that the world’s economic growth will be below average, while the regulation will be strengthening and unemployment staying above natural rate during the next 3-5 years.
The Federal Open Market Committee’s meeting will take place on June 22-23 in Washington.

[COLOR="green"]Commerzbank AG: dollar may rise to 93.50 yen[/COLOR]
Technical analysts at Commerzbank AG claim that the greenback may rise to 93.50 (78.6% Fibonacci retracement of May decline) trading versus yen if it manages to stay above support area between 90.97 (support line inclined upwards) and 90.85 yen (last week’s minimum). If the pair is able to overcome 93.50 level, it may advance to 95.00.
USD/JPY is currently trading at 91.20/30.

[COLOR="green"]Pound jumped on retail sales growth[/COLOR]
British currency bounced by 0.2% almost to the month’s maximum versus the greenback. It happened as UK retail sales gained in May 0.6% while the economists were looking forward to only 0.1% increase. As a result, investors’ sentiment about the country’s economic growth improved.
Before this sterling declined after Bank of England claimed that inflation may fall as economic growth slows down making investors think that the central bank would keep rates at minimal level for a long time.

[COLOR="green"]Spain organised successful bond auction [/COLOR]
The single currency fell from yesterday' maximum at 1.2355 to today’s minimum at 1.2245. then euro bounced by 150 pips to the 3-week maximum at 1.2380 area.
Such advance of the European currency can be explained by sufficient demand for Spanish debt. The country was able to sell on today's auction long-term government bonds of 3.479 billion euro. As a result, market’s confidence to euro increased.
The analysts believe that Spain will rest in the center of investors’ attention. The results of Spanish banking system’s stress test are to be released later today.

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[COLOR="green"]
Ueda Harlow: pound may rise to 137 yen[/COLOR]
Analysts at Ueda Harlow Ltd. claim that British pound may rise to one-month maximum at 137 yen representing the bottom line of the ichimoku cloud if it overcomes the key 136.40 yen level.
The specialists note that there are growth signals on the ichimoku chart such as short-term conversion line at 133.20 yen crossing a longer-term baseline at 131.60.
Sterling can possibly strengthen getting above the neckline to 139 yen level, but it may have difficulties as the economic fundamentals will create downward pressure on the pair in the long-term period.

[COLOR="green"]ANZ National Bank: AUD and NZD gain[/COLOR]
Australian and New Zealand’s currencies approached today maximal levels versus the greenback as investor’s sentiment about the situation in Europe improved.
Economists at ANZ National Bank Ltd. in Wellington note that the strong positive driver was provided by the decision of European authorities to release the information about banking system’s conditions announcing banks stress tests’ results.
Strategists at National Australia Bank Ltd. in Sydney claim that Australian dollar needs increases in copper prices and US stocks to rise above key resistance at 87.25 cents.
This week Aussie gained 2.1% against US dollar, while kiwi managed to add 2%.

[COLOR="green"]Commerzbank: euro may reverse at1.2445/1.2570 area[/COLOR]
European currency went up from June 7 minimum rising above 1.2410.
Technical analysts at Commerzbank believe that euro is likely to reverse at 1.2445/1.2570 zone and restart moving down. The specialists place intraday support at 1.2210 and 1.2145.
If the single currency strengthens, the pair EUR/USD may climb above 1.2900 retracing to the 1.2951.

[COLOR="green"]Standard Bank: gold may rise to $1,300 an ounce[/COLOR]
Analysts at Standard Bank Plc expect gold to rise in 2010 to the record maximum at $1,300 an ounce.
According to the specialists, investor’s demand for euro and dollar will decline as developed economies may show worse growth pace than the emerging ones such as China. Standard Bank economists believe that the United States will never regain its dominance in the world economy, while billionaire investor George Soros foresees severe recession in Europe.
As a result, due to the absence of immediate replacement for the greenback and the single currency market players are likely to turn to gold. Concerns over the value of American and European currencies may induce Russian, Chinese and Indian central banks to add gold to their reserves.

[COLOR="green"]BNP Paribas: euro may show the maximal weekly growth in 2010[/COLOR]
The single currency is likely to show the maximal weekly growth versus the greenback in a year. It happened as the concerns about low economic growth of the euro region declined due to the stock markets’ positive dynamics.
Analysts at Standard Bank Plc in London think that investors will try to preserve the gains of the single currency. Currency strategists at BNP Paribas in London note that Spanish bond auction turned out to be more successful than it was expected. As a result, risk appetite went up and the pair EUR/USD managed to overcome resistance at $1.2350 level.

[COLOR="green"]Credit Agricole: yen's gaining versus US dollar[/COLOR]
Japanese yen will show the second consecutive weekly advance versus the greenback.
Yen is gaining as Japanese Prime Minister Naoto Kan promised to reduce country’s public debt that is the second biggest in the world. The Prime Minister representing Democratic Party of Japan also increased the general optimism claiming that he will consider opposition party’s idea of consumption tax increase. In order to end stagnation period country’s 40.7% corporate tax will be diminished and the government will promote environment and healthcare industries.
Analysts at Credit Agricole Corporate and Investment Bank in Tokyo believe that the main objective of Japanese structural reforms will be in securing funding sources and the national currency is likely to benefit in this situation.

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[COLOR="Green"]UBS: yuan finally rose[/COLOR]
The People’s Bank of China finally ended 2-year period of yuan’s peg to the greenback. As a result, the currency gained 0.42% rising to 6.7976 per dollar as of 5:30 p.m. in Hong Kong. The yuan reference rate was kept at 6.8275 to prevent short-term speculative capital moves and excessive fluctuations. Chinese currency is now let to diverge by 0.5% from the official rate making the rate more flexible.
According to Chinese central bank, yuan’s growth will help to restrain inflation and turn investment from export-manufacturing to service industries. In addition, such actions of the bank will decrease critical attitude of the USA and G-20 that accused China of using undervalued currency to stimulate exports.
Strategists at UBS AG expect yuan to add nearly 4% this year and 5% next year. The 14 analysts surveyed yesterday by Bloomberg claim that yuan is likely to advance by 1.5% against the dollar to 6.7 by the end of 2010.
Philippine central bank Governor Amando Tetangco commented that the change in monetary policy reflects the recovery of China’s economy that may have a very positive impact on the entire Asian region attracting more foreign capital.

[COLOR="green"]Citigroup: euro zone will fight the crisis[/COLOR]
Economists at Citigroup Inc. claim that the European Union’s bailout program is the evidence that European leaders are really trying to stop the debt crisis and restore confidence in euro. The specialists are quite optimistic and believe that in the end the euro zone will be able to solve its financial problems.
According to Citigroup, Europe’s governments made a right step deciding to release the information of banks’ stress tests citing the fact that similar measures were very helpful in the United States in 2008.

[COLOR="green"]Citigroup: euro will lose 9% in case of Greece’s default[/COLOR]
Economists at Citigroup Inc. expect that the single currency will lose approximately 9% versus the greenback in case of the Greece’s default. Such assumption is made on the basis of quanto credit swaps analysis with the help of which it’s possible to bet on currency volatility and sovereign debt risk.
According to the specialists, investors may use quanto swaps to bet that euro will fall. They can benefit from buying insurance on euro zone’s government debt in dollars and selling protection on the same bonds in the European currency.
The European authorities are regarding the possibility of forbidding default swaps as they are thought to strengthen the fiscal crisis. Citigroup analysts project that if France doesn’t manage to pay back investors euro may contract by 28|%, if Spain – by 20%, Italy – by 17% and if Germany – by 25 %.

[COLOR="green"]Morgan Stanley: yuan's growth will cause decline in US Treasuries[/COLOR]
Economists at Morgan Stanley believe that China will reduce pace of purchasing US dollars for its international reserves. This is likely to happen as the termination of yuan’s peg to the greenback mean that the positive sentiment about the world’s economic recovery is strengthening.
The specialists claim that while the revaluation’s short-term bearish impact on Treasuries may be restrained by the positive influence it has on risky assets, in the long-term the amount of dollars possessed by China will go down and so the country would use less dollars to transfer in American Treasuries.

[COLOR="green"]Robert Mundell: more flexible yuan will harm world's economy[/COLOR]
Nobel Prize winner Robert Mundell is sure that China’s decision to make its exchange-rate more flexible ending the period of protection from the crisis will harm both its and the world’s economy.
The economist believes that yuan’s connection to the greenback was acting at the main indicator of financial stability in the region. Mundell claims that exporting nations of Asia used to orient their monetary policy on this currency pair. Chinese and American currencies belong to two of their biggest customers. He underlined that China could deal with the balance-of-payments surplus and foreign-exchange reserves’ advance even in terms of a fixed exchange rate.

[COLOR="green"]Bank of Montreal: CAD rose to 5-week high versus USD[/COLOR]
Canadian currency rose to the 5-week maximum versus the greenback. The demand for loonie as the asset linked to growth was helped by the confidence in the world’s economic rebound that increased after China allowed yuan to appreciate. In addition Canada finds itself in the centre of attention due to the G-20 and the G-8 summits.
Traders at Bank of Montreal in Toronto claim that China’s actions resulted in the revival of risk appetite. The commodities gained with crude oil, Canada’s largest export, rising to 6-week maximum at $78.87 a barrel. Gold for immediate delivery set today new absolute maximum at $1,265.30 an ounce and copper added 1.8% to $6,548.5 a metric ton.

[COLOR="green"]HSBC: yuan can decline to 6.80 per dollar by the end of 2010[/COLOR]
Analysts at HSBC Holdings Plc claim that yuan’s likely to be rather volatile and we’ll observe periods not only of yuan’s appreciation but also of Chinese currency’s depreciation versus the greenback.
The specialists forecast that yuan can decline to 6.80 per dollar by the end of 2010. HSBC believes that the shift in China’s monetary policy was made due to the political reasons in order to ease the tension with the United States.
HSBC economists are looking forward to yuan’s peg to several currencies that may happen earlier than they originally expected.

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[color=#33CC00]
Lithuania plans to enter euro zone in 2014[/color]
Lithuania that survived European Union’s second-deepest recession in 2009 set the target of euro adoption at 2014. The country aims to reduce deficit to 3% of GDP by 2012. To attain this goal it would be necessary to reduce spendings by 5% of GDP. During the last year and first half of this year Lithuanian government already conducted severe austerity measures cutting the budget by 12% of GDP.
The country’s Prime Minister Andrius Kubilius referred to entering the euro area as Lithuania’s strategic objective. Lithuanian authorities are sure that the monetary union will be able to get out of the debt crisis. Kubilius underlined the need of more coordinated fiscal and economic policies in Europe in order to prevent from having such problems in future.

[color=#33CC00]Commerzbank: euro will decline to 1.2204/1.2145[/color]
The single currency rose from 1.1875 at the beginning of June to yesterday’s maximum at 1.2465.
Technical analysts at Commerzbank believe that the pair EUR/USD has reached the target of its upward correction at 1.2445/1.2570 area representing 2009 minimum and 38.2% retracement of April’s decline to 1.2570. As a result, the specialists expect euro to go down to 1.2204/1.2145 where 20-day MA and May 19 minimum are found.
After lowering to 1.2204/1.2145 European currency may climb to 1.2920/6 zone.

[color=#33CC00]Mizuho: AUD and NZD down due to economic decline prospects[/color]
Australian and New Zealand’s currencies fell from monthly maximum affected by the negative sentiment that European banks’ funding problems will harm the rebound of world’s economy. In addition, Aussie and kiwi got under pressure due to the decline of Chinese yuan caused by the speculation of the country’s central bank intervention to the forex market in order not to let the national currency appreciate too much.
European Central Bank President Jean-Claude Trichet said nations which broke European Union’s fiscal rules may face tougher punishments and mentioned such measures as more strict fiscal reporting requirements or a limitation or even suspension of voting rights.
Strategists at Mizuho Trust & Banking Co. in Tokyo claim that fiscal consolidation is likely to provoke contraction of world’s economy that would diminish demand for commodity currencies such as Australian and New Zealand’s dollars.

[color=#33CC00]Ria Capital Market: pound declined on Osborn’s announcements[/color]
British currency went down reacting on the speculation that the government’s intention to balance the budget by the end of its first term will have a negative impact on the economic growth.
The Chancellor of the Exchequer George Osborne announced that the government will cut the deficit to 20 billion pounds by 2015-2016 reducing spending by 30 billion pounds every year.
The 10-year gilt yield hit 8-month minimum at 3.41% as spending reduction performed by Osborne made British debt more attractive for investors and diminished the possibility of UK losing its AAA rating. Strategists at Ria Capital Market Ltd. regard such policy as the evidence government’s efforts to improve the fiscal situation.

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[COLOR="Green"]Societe Generale: buy yuan options[/COLOR]
Analysts at Societe Generale SA recommend investors to use options in order to benefit from the volatility of Chinese currency in the next month caused by the euro zone’s debt crisis.
According to the specialists, the possibilities of yuan’s decline and advance are equal, so it’s necessary to buy straddles that unite call and put options. On Monday yuan had the biggest gain since 2005, while yesterday it survived the most significant fall in 18 months.
Societe Generale strategists claim that the pair USD/CHY will trade the same way as the other dollar pairs if the concerns about the severe European situation rise again.

[COLOR="green"]Deutsche Bank: euro will fall to 1.10 in a year[/COLOR]
Analysts at Deutsche Bank FX research team expect the European currency to fall to 1.2000 during the next 3 months and to 1.1000 area in a year.
Euro has already hit the 4-year minimum below 1.19 and the specialists claim that we observe the long-term downtrend. Further depreciation seems to be quite likely as the cheap levels aren’t attained yet. Deutsche Bank says that euro’s purchasing power parity versus the greenback is equal to 1.15-1.20 that is close to the current trading area. When the single currency was launched its rate began from 1.18 zone.
In addition, interest rate differentials between the United States and the European Union are thought to go up in the middle term as the FED may raise rates faster than the ECB. As a result, this will have a negative impact on euro as well.

[COLOR="green"]BNP Paribas: euro will decline in the middle term[/COLOR]
The single currency dropped to one-week minimum versus the greenback and yen. It happened due to the groeth of investors’ concerns about financial condition of the European banks. French bank Credit Agricole SA claimed that will write down the value of its stake in Greek Emporiki Bank by 400 million euro ($490 million). On June 21 Standard & Poor’s Ratings Services outlined that Spanish banks will have many difficulties in 2010 and 2011 due to the rise in credit losses and weak revenue generation.
The data released today by Markit Economics showed that the composite index based on a survey of euro-area purchasing managers in services and manufacturing declined from 56.4 in May to 56.
Strategists at BNP Paribas SA in London bet on euro’s decline in the middle term. They note that the demand for yen is rising as it represents less risky asset.

[COLOR="green"]National Australia Bank: UK rates won’t be raised in 2010 [/COLOR]
The minutes of the June 10 meeting of Bank of England’s Monetary Policy Committee published today showed that while 7 members voted for keeping the key interest rate at 0.5%, policy maker Andrew Sentance declared in favor of increasing the rate for the first time in almost 2 years.
Sentence offered to hike rates to 0.75%. The economist underlined that inflation rate continues to grow after recession. In April annual pace of British consumer price advance reached 17-month maximum. In May inflation rate was equal to 3.4%, while the government’s limit is situated at 3%.
Central bank’s governor Mervyn King warned, however, that inflation is caused only by energy-cost and exchange-rate fluctuations. Bank of England officials predict it will fall in the aftermath of the economic slump.
The economists at National Australia Bank in London claim that the current vote division will be stable for some time with Sentence as the only advocate of rates hike and the majority of members for the monetary easing. The specialists don’t expect that rates will be up in 2010.

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[COLOR="Green"]RBS: euro will lose 20% versus the greenback[/COLOR]
Analysts at RBS Securities Japan Ltd. in Tokyo expect the single currency to lose 20% trading versus the greenback. The specialists claim that the attempts of European countries to cut sovereign debt will harm economic growth and trigger deflationary pressure.
According to RBS, as far as it’s possible to judge by interest rates and inflation differential euro is still expensive against US dollar and may remain so even after 20% depreciation.
European currency declined by 14% in 2010. The economists say that European economy may eventually benefit from euro’s decline. RBS forecasts that euro area’s economy will gain 1.2% in 2010 and 1.3% in 2011, while the US one is thought to grow by 3.4% and 4.3% respectively and Japan – by 3.2 % and 1.8%. In Europe Germany that accounts for one third of the currency union’s economy will be at the head of fighting the crisis.

[COLOR="green"]Commerzbank: GBP/USD – neutral/positive trend[/COLOR]
British currency hit its minimum at 1.4685 in the beginning of the week and then gained strength rising to Asian session’s maximum at 1.5000 on Wednesday.
Technical analysts at Commerzbank claim that the trend for the pair GBP/USD is now regarded as neutral/positive as long as pound stays above the 20-day MA at 1.4674. The specialists underline that sterling climbed above resistance at 55-day MA and ruined 6-month downtrend.
If the pair goes up, Commerzbank places key resistance zones at 1.5240/50 (double Fibonacci retracement) and 1.5445 (the top of the 7-month channel). If the rate approaches to the latter, pound is likely to reverse.

[COLOR="green"]USD/CAD: comments[/COLOR]
The greenback rose versus its Canadian counterpart from Monday’s minimum at 1.0135 to the new 2-week maximum at 1.0460. During Asian trade and at the beginning of the European one USD/CAD consolidated at 1.0400 reflecting the Fed’s decision to keep the main interest rate at the minimal level on the deterioration of financial environment.
The analysts claim that the uptrend is still intact. The situation, however, would be more certain if US dollar could climb above 1.0375 and 1. 0311. Support levels are found at 1.3075, 1.0315 and 10311. If the rate goes up, resistance levels will be found at 1.0418, 1.0455 and 10500.

[COLOR="green"]BNY Mellon: yen’s gaining after the Fed’s announcement[/COLOR]
Japanese currency advanced versus the greenback as investors’ demand for it as a safer asset went up.
According to yesterday’s report, US new homes sales contracted in May by 33%. Such slump can be explained by the expiration of tax credit that means the market is still vulnerable without government’s help. Currency strategists at Bank of New York Mellon Corp. in London commented on the discouraging US data saying that the country’s economy isn’t yet steady on the rebound’s path and yen is going to benefit from such outlook.
Explaining their decision to keep the key interest rate at the record minimum the Federal Reserve officials claimed that the country’s economic recovery would be slow and financial conditions worsened due to the external situation.

[COLOR="green"]China: yuan’s revaluation won’t help the US[/COLOR]
Chinese Foreign Ministry Spokesman Qin Gang claimed today that yuan’s revaluation won’t solve US economic problems such as unemployment, overconsumption and low savings rate. Chinese authorities keep being against turning this issue to the object of political tension.
Even now when China’s currency is no more tied to the greenback, US lawmakers try to make the President Barack Obama continue pressuring China. The Congressmen try to permit legislatively the tariffs on imports to let American companies compensate the advantages that weak yuan gives Chinese producers.

[COLOR="green"]Should Greece quit the euro area?[/COLOR]
Economists at Standard & Poor’s claim that it could be better for some European countries to leave the euro zone than suffer a lot of problems staying in the monetary union. According to them, there is the serious risk that other EU countries will get involved into the crisis.
The specialists at Germany’s Ifo economic institute believe that renouncing the single currency would be a better way out for Greece than the necessity to cut budget by 14% of GDP.
European Central Bank, on the other hand, regards the austerity measures as the sole opportunity for Greece to deal with the crisis.
The median forecast of 8 economists surveyed by Bloomberg showed that in 2010 Greece’s economy will decline by 3.9%, while the total euro area’s economy will expand by 1.1%.

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[COLOR="Green"]Morgan Stanley: pound forecast's raised[/COLOR]
Analysts at Morgan Stanley increased their sterling forecasts for 2010 and 2011 versus the greenback and the single currency.
According to the specialists, pound will reach $1.43 by the end of 2010 and $1.52 by the end of 2011, while the previous estimate was only at $1.29 and $1.41 respectively. Morgan Stanley expects now sterling to climb to 81 pence per euro by year-end and to 77 pence by the end of 2011, while before they thought that British currency would trade at 90 and 83 pence respectively.
The forecast change is explained by the budget released on June 22 and the prospects of inflation rate growth. The new budget supposes such austerity measures as levy on banks, a higher sales tax and spending cuts. British government plans to reduce the budget shortfall by 113 billion pounds ($169 billion). The country’s inflation rate went up to 17-month maximum at 3.4% in May while the upper limit is set at 3%.

[COLOR="green"]Bof T Mitsubishi: euro and pound will fall versus dollar[/COLOR]
Analysts at Bank of Tokyo Mitsubishi UFJ expect European and British currencies to decline versus the greenback in the coming months. It’s likely to happen, claim the specialists, as fiscal tightening performed by these countries will slow down their growth pace in comparison with the United States.
Bank of Tokyo Mitsubishi mentioned that the austerity measures are done in order to reassure the ratings agencies that, in their turn, acted to provoke financial crisis.

[COLOR="green"]Mizuho: loonie's rising on high oil price[/COLOR]
Canadian dollar rose versus its US counterpart for the first time this week. It happened due to advance of crude oil by 1.2% to $77.41 per barrel on the Nymex and the evidence of American economy’s growth pace slowdown. Strategists at Mizuho Financial Group Inc. claim that loonie will benefit while commodity prices are high.
Some central bank are regarding now the possibility of using loonie as a reserve currency to diversify the reserves declining the share of euro, dollar and yen as this currencies are associated with high debts. Analysts at UBS AG expect the International Monetary Fund may to add Canadian dollar in a basket of currencies it uses in transactions.

[COLOR="green"]Bank of Montreal: risk aversion strengthens yen[/COLOR]
It’s the sixth day in a row when Japanese yen’s rising versus the single currency. Yen’s supported by the expectations that G20 nations won’t be able to find the way out for the indebted euro zone’s countries at this weekend’s meeting.

Strategists at Bank of Montreal in Toronto claim that the market is again dominated by the risk aversion. The specialists point out that there are 2 main strategies. On the one hand, European countries promote austerity measures, while the United States are in favor of spending and stimulus policy. Bank of Montreal says that it’s possible that the summit will produce no outcome.

[COLOR="green"]Bank of Nova Scotia: Canada’s rate unlikely to be raised[/COLOR]
It’s possible to assume watching the derivatives trading that the Bank of Canada won’t lift its key interest rate at each of this year’s four remaining meetings devoted to monetary policy. Yields on December 2010 bankers’ acceptances lost yesterday 6 basis points hitting the minimal level since May 26.
Bank of Nova Scotia’s data shows that the probability that the central bank will increase borrowing costs by 25 basis points at a July 20 meeting dropped from 80% at the start of the week to 67% yesterday.
Economists at Bank of Montreal claim that the recovery of Canadian economy will be slower that it was expected. Canadian retail sales contracted in April falling five times below the forecast and inflation also decreased in May. The specialists believe that the Bank of Canada may raise the rate at its next meeting but then stop for a period of time in order to stimulate the economy.

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[COLOR="Green"]John Taylor: bailout won't save Europe[/COLOR]
March forecast of John Taylor, famous investor managing the world’s largest currency hedge fund FX Concepts LLC, has come true as US dollar strengthened from $1.35 to $1.20 per euro.
Now Taylor believes that US currency may take pause for some time before the new surge that may come if it’ll become clear that the European bailout isn’t helping euro region to get out of the crisis.
The plan of financial help for the indebted euro zone’s countries creates false confidence among the investors that will lead to the serious shock in September. The economist predicts that be the end of 2010 euro will fall to $1. According to his estimates, the holders of euro will be very lucky if the rebound of the single currency lasts during July.

[COLOR="green"]Millennium Asset Management: dollar won’t rise versus euro [/COLOR]
Specialists at Millennium Asset Management in London claim that $1.20 level corresponds to the fair value of euro. As a result, they’ve removed one of the arguments in favor of euro’s depreciation.
More than that, note the specialists, the greenback’s growth prospects were connected with the outstanding performance of American economy that isn’t realizing. On the other hand, investors seem to be concerned about possible double dip recession in the United States.
According to Commerce Department’s data released on June 25, US first quarter economic growth pace of was equal only to 2.7% in comparison with 3% last month’s consensus. The underlying problems of the country’s economy are in smaller advance in consumer spending and a bigger trade deficit.

[COLOR="green"]Technical Alpha: pound will rise to $1.53/56[/COLOR]
Technical analysts at Technical Alpha in New-York expect pound to rise versus the greenback as it overcame the key cloud’s resistance on the daily Ichimoku chart. The specialists underline that on June 23 British currency went above the upper and lower lines on the chart for the first time in six months.
The target of sterling’s advance lies between the long-term downtrend resistance line at $1.53 and 50% Fibo retracement of the fall from August 2009 to May 2010 at $1.56. Technical Alpha supposes that cloud area on the chart, which acts as support when prices are above may let pound have the minimal July levels between $1.4878 and $1.4580.

[COLOR="green"]Westpac: Aussie will decline to 84 cents[/COLOR]
Analysts at Westpac Banking Corp. expect Australia’s currency to lose 4% against US dollar dropping to 84 cents. As a result, the specialists recommend selling Aussie versus the greenback on its current advance to 88.15 cents. The trade should be stopped if AUD exceeds 89 cent level.
According to Westpac, the decline of Australian dollar may be caused by the slowdown of Chinese economy.

[COLOR="green"]BNP Paribas: euro will decline on fiscal tightening[/COLOR]
Strategists at BNP Paribas SA believe that the efforts of euro area’s governments to conduct fiscal tightening measures while the United States keeps being loyal to monetary easing will result in euro’s decline.
The specialists believe that to assure European economic and fiscal recovery relatively more powerful economies will need to accept higher exchange rates. The single currency is likely to be used for funding while Asian and commodity currencies are going to benefit. The analysts claim that any euro’s attempt to rise above $1.24 would represent selling opportunity for investors.

[COLOR="green"]Bof NY Mellon: yuan’s free trading is likely is the next few years[/COLOR]
Strategists at Bank of New York Mellon Corp. believe that the euro zone’s debt crisis can make China authorize yuan’s free trading.
The country’s now hesitating about its euro investments as much as it’s concerned about dollar holdings. The sole way out in this case is to stop increasing the amount of its foreign-exchange reserves. This, in its turn, would require currency liberalization as it won’t be necessary for the People’s bank of China to perform daily market interventions.
Never the less, free floating of Chinese currency isn’t a matter of a short-term period as country’s authorities won’t regard the matter seriously during the next few years.

[COLOR="green"]JPMorgan Chase: EUR/USD forecast’s raised[/COLOR]
Strategists at JPMorgan Chase & Co. improved their forecast for EUR/USD as it’s now quite evident that the United States won’t increase interest rates in the near future.
JPMorgan Chase predicts that the single currency will trade at $1.25 area until the second quarter of 2011 resting flat versus the greenback. The previous forecast was that euro will start declining by the end of this year dropping to $1.20 and getting down to $1.18 by the end of the first quarter of 2011.

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[COLOR="Green"]Standard Chartered: dollar will rise to 95 yen[/COLOR]
Analysts at Standard Chartered Plc expect the greenback to hold key support at 88.50 yen and gain 6% to the maximal level since August. Standard Chartered team’s using key closing lows at the bottom of the range in order to define key support levels.
US currency is very likely to rise to 95 yen level representing the top of a range since December. According to the specialists, risk-reward will make investors buy USD/JPY in hope for the pair’s returning upwards after losing 2.1% in June.
The median forecast of economists surveyed by Bloomberg showed that dollar may strengthen to 97 yen by the end of 2010.

[COLOR="green"]Saxo bank: daily currency forecast[/COLOR]
EUR/USD: it’s recommended to sell European currency while the pair’s rising to 1.2270 stopping above 1.2290. The target level is set at 1.2210.
USD/JPY: it’s advised to sell dollars while the pair’s advancing to 89.10 putting stops above 89.50 with the target at 88.60.
EUR/JPY: it’s recommended to sell the single currency while the pair’s going up to 108.08 putting stops above 108.25 with the target at 107.
GBP/USD: the trend for the pair is regarded as neutral.
AUD/USD: it’s recommended to sell Aussie while the pair’s rising to 0.8660 putting stops above 0.8690 with the target at 0.8600.
USD/CAD: the greenback is expected to rise to 1.0440, so it’s necessary to buy dollars at 1.0360/80 zone.

[COLOR="green"]Standard Chartered: dollar forecast is cu[/COLOR]t
Analysts at Standard Chartered Plc reduced their forecast for US dollar as the premium provided by American rates decreased under the impact of Treasuries’ advance.
The yield differential between 10-year Treasuries and the same Japanese government bonds narrowed, so investors haven’t much stimulus to prefer the first. In addition, Group of 20 meeting established the target for decreasing budget deficits and inflation remains weak. For Switzerland, on the contrary, deflation risks have almost disappeared and the Swiss National Bank won’t need to intervene to the market.
As a result, the specialists lowered projection for USD/JPY from 98 yen in the third quarter and 100 yen by the end of 2010 to 93.5 and 95 yen respectively and from 1.25 francs by September 30 and 1.23 francs by December to 1.19 and 1.17 respectively. The specialists underline that Japanese yen and Swiss Franc will benefit helped by market volatility and uncertainty.

[COLOR="green"]Commerzbank: EUR/CHF will keep falling[/COLOR]
Analysts at Commerzbank AG expect Swiss franc to rise to the record maximum versus the single currency. Such forecast is based on the assumption that the country’s central bank won’t intervene in the market selling the national currency as inflationary risks strengthen.
Money supply surged in May and Swiss economy keeps recovering, so the concerns about possible deflation have vanished and EUR/CHF is projected to trade within downtrend. Swiss franc has already extended by 6.9% versus euro during this quarter.

[COLOR="green"]JPMorgan: euro will decline till the end of 2010[/COLOR]
Specialists at JPMorgan expect that the greenback will trade at $1.20 per euro by the end of 2010. US dollar will decline against its Australian and Canadian counterparts to 92 and to 95 cents respectively.
JPMorgan’s second-quarter client survey showed that American, European and Japanese companies suppose that euro’s downtrend versus US currency will prolong through the rest of 2010. The majority of respondents believe that the single currency will stay below$1.30, while the average estimate lowered from $1.34 in the March to $1.22.
Strategists at Standard Bank Plc expect that the single currency will decline not only versus the greenback, but against several currencies. Euro dropped by 0.45% versus US dollar in June and lost 2.4% against its main competitors as show Bloomberg Correlation-Weighted Currency Indices.

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[COLOR="Green"]NTT SmartTrade: weak US growth prospects[/COLOR]
The greenback declined for the first time in 3 days trading versus the single currency affected by the concerns about US economic recovery prospects.
According to the economists’ survey conducted by Bloomberg, the index of the Institute for Supply Management-Chicago Inc. fell from 59.7 in May to 59 this month. Analysts at NTT SmartTrade Inc. claim that the rebound of American economy seems to be weak that is very negative for US dollar.
US currency weakened from $1.2188 in New York yesterday to $1.2219 per euro at 6:48 a.m. in London.

[COLOR="green"]Commerzbank: pound's growth won't last long[/COLOR]
Analysts at Commerzbank AG claim that the advance of British currency won’t last long as the spending cuts performed by the country’s government will have a negative impact on UK’s economic growth. As a result, the Bank of England would have no other way but to keep rates at the minimal level.
The specialists underline that sterling was supported last week by emergency budget that helped to increase investors’ confidence in pound and the fact that one member of the central bank’s Monetary Policy Committee voted for the rate hike that provoked the expectations of possible rates’ hike. Commerzbank believes that such speculation came untimely and points at the current austerity measures performed by British government.
As a result, the strategists expect that pound’s decline will begin when the country’s central bank will confirm their assumptions.

[COLOR="green"]Barclays Capital: clients bet on euro's decline[/COLOR]
The survey performed by Barclays Capital among its clients showed that the single currency will keep declining versus the greenback in the third quarter of this year although it’s not likely to collapse.
The majority of respondents believe that euro will be trading within the downtrend, while only 4% think that the European currency will gain. The idea of euro’s collapse is shared by less than 10% of interviewed. Most clients of Barclays Capital prefer light positions.

[COLOR="green"]UBS AG: EUR/CHF may fall to 1.30[/COLOR]
Analysts at UBS AG believe that Swiss franc may strengthen versus the single currency and the pair EUR/CHF is likely to fall below 1.30. Such forecast is based on the assumption that investors will increase their demand for franc as a safer currency and Switzerland’s central bank won’t intervene to the market.
The fact that Swiss national bank isn’t selling the national currency means that franc can appreciate to the level that will harm the country’s economy.
Franc rose by 3.9% versus euro since June 17 when the SNB announced that deflationary risks have almost vanished.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

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[COLOR="Green"]Citigroup: euro will rise to $1.25[/COLOR]
Technical analysts at Citigroup Inc. expect the single currency to rise to $1.25. The specialists believe that euro’s trading range will narrow and the pair will be driven up above its 2-month downtrend. Support at $1.2154, think the analysts, will hold the pair from declining. Citigroup places resistance at $1.2363 and $1.2490-$1.2510.
European currency lost 13% getting down from $1.3667 on April 15 to the 4-year minimum at $1.1877 on June 7 and then recovered to $1.2398 on June 28.

[COLOR="green"]European banks still at risk despite ECB’s lending[/COLOR]
Yesterday the European Central Bank lent 131.9 billion euro ($161 billion) to 171 undisclosed firms for 3 months, while the analysts were projecting that 200 billion would be required. Never the less, euro zone banks are still vulnerable and need ECB support.
The region’s central bank’s attempting to make a gradual reduction of stimulus that was being used since Lehman Brothers Holdings Inc.’s collapse in 2008 when financial firms began to avoid crediting each other. Now debt crisis in Greece, Portugal and Spain is strongly harming investors’ confidence. Greek banks, Spain’s 45 savings banks, or cajas, and Germany’s state-owned Landesbanken have problems getting short-term refinancing forcing ECB to keep funding financial sector, claim investors at Zurich-based Swisscanto Asset Management.
Specialists at Schroders Plc. claim that although ECB actions managed to calm the market, some Spanish, Portuguese, Greek and Irish banks will still refinance their significant balance sheets on their own.

[COLOR="green"]Barclays: euro rose after ECB announcement[/COLOR]
The single currency rose supported by the ECB’s announcement that eased concerns about European banks’ refinancing abilities.
Euro zone banks have to repay 442 billion euro ($543 billion) of an expiring 12-month funding. In order to make this process smoother the European Central Bank allowed banks to use a 6-day refinancing operation getting unlimited loans at a fixed rate of 1%.
Currency strategists at Barclays Plc in London note that market sentiment improved and claim that the funding operations have currently the most significant impact on the euro rate.

[COLOR="green"]Brown Brothers Harriman: GBP/USD is down for the third day[/COLOR]
British currency is contracting versus the greenback for the third day in a row. It happened as the demand for riskier assets went down affected by the negative recent data that the rebound of the world’s economy will be weak, claim strategist at Brown Brothers Harriman Ltd. in London.
According to the survey of British companies performed by Markit Economics and the Chartered Institute of Purchasing and Supply, UK manufacturing growth declined with index falling from 58 in May to 57.5 in June. It’s also expected that US PMI released today by Institute for Supply Management fell from 59.7 in May to 59 in June as it’s expected by the economists interviewed by Bloomberg.

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[adria]

Thanks for the analysis. Your updates seems to be very helpful.

[FBSanalytics]

Originally Posted by adria

Thanks for the analysis. Your updates seems to be very helpful.

Adria, you are welcome!

Thanks for reading our analysis.

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[FBSanalytics]

[COLOR="Green"]RBC Capital Markets: euro will have to struggle to gain [/COLOR]
Analysts at RBC Capital Markets believe that more successful than expected European Central Bank’s tenders may improve market’s sentiment about the single currency and make investors stop betting on euro’s decline.
Never the less, the specialists keep forecasting the downtrend on euro and expect European currency to struggle. RBC Capital Markets notes that the tenders switched from macro and model accounts on EUR/USD, EUR/CAD and EUR/AUD into wholesale short covering.

[COLOR="green"]Deloitte: concerns about British recession rise [/COLOR]
The survey conducted by Deloitte LLP showed that the confidence of chief financial officers at major British currency companies dropped to 12-month minimum due to the fears that the budgets reduction with spending cuts and tax increases of 113 billion pounds ($172 billion) will lead to economic recession.
Only 24% of CFOs seem to be optimistic, while in the first quarter this figure was equal to 40%. In addition, 38% of respondents believe that double-dip recession is possible, while at the beginning of the year such opinion was shared by 33%. However, it’s necessary to mention that CFOs’ sentiment about the availability of credit went up almost to maximal level since 2007.
Deloitte specialists comment that the results of survey demonstrate the increase in concerns about further growth of British economy accompanied by better corporate credit and liquidity outlook.

[COLOR="green"]UBS: EUR/CHF rebound won't last long[/COLOR]
Strategists at UBS AG expect that the single currency’s recovery versus Swiss franc won’t last long. It may happen due to the central banks’ demand for franc as a reserve currency and Switzerland’s better fiscal outlook and economic growth in comparison with euro zone's countries. In addition, the risk that the Swiss National Bank will intervene to the market has almost disappeared.
On July 1 the pair EUR/CHF fell to the absolute minimum since 1999 at 1.3074 francs and recovered rising today above 1.33. UBS analysts keep their 3-month euro forecast at 1.35 francs, although they see the risks of decline. All in all, European currency dropped by 10% versus franc since the beginning of 2010.

[COLOR="green"]Mizuho: yen's up versus dollar and euro[/COLOR]
Analysts at Mizuho Corporate Bank claim that after the pair USD/JPY closed last week at one of its all-time lowest levels it will continue declining as least during a month.
As for EUR/JPY, last week the single currency hit its minimal level versus yen and is likely to trade volatile during its consolidation within recent ranges this week. While the European currency’s gaining versus many of its counterparts, there’s a spike low on its weekly charts versus yen. It’s also necessary to mention the potential ‘wedge’ formation at the bottom of bear market since October 2009.



[COLOR="green"]Merrill Lynch: yen forecast up[/COLOR]
Analysts at Bank of America Corp.’s Merrill Lynch increased forecasts for Japanese yen versus dollar and euro. The specialists’ judgment is based on the expectations that US interest rates will be lower and risk appetite will fall on the uncertain prospects of the world’s economic growth. As a result, yen will be able to gain on the risk aversion.
Merrill Lynch believes that yen will reach 90 per dollar by the end of 2010, while the previous estimate was at 97. Japanese currency will trade at 104 per euro by year-end while the previous projection was at 112 yen. As for the third quarter, yen forecasts were lifted from 94 to 89 versus dollar and from113 to 107 versus European currency. The forecast for 2011 was also revised from 106 to 97 versus the greenback and from 117 to 107 against euro.

[COLOR="green"]Helaba: euro will keep growing[/COLOR]
Technical analysts at Helaba Landesbank Hessen-Thueringen in Frankfurt expect euro to keep rising versus the greenback in the near term as it managed to close above the weekly level of $ 1.2495.
Such assumption is confirmed by the daily momentum indicators such as the MACD that is on the verge of issuing a buy signal, which points to a stronger recovery phase for the euro. In order to hold growth prospects euro has to stay above $1.2407.

[COLOR="green"]Commerzbank: euro’s advance is not likely[/COLOR]
The single currency went down from 6-week maximum versus the greenback at $1.2612 as the market expects that the European Central Bank will have to keep interest rates at the minimal level as the austerity measures have a negative impact on the euro zone’s economic growth.
Economists surveyed by Bloomberg expect that the benchmark rate will be left at the current 1% level at the ECB’s policy meeting on July 8.
Analysts at Commerzbank AG in Frankfurt claim that European economy is too weak and not ready to the rates increase. According to them, the probability of euro’s near-term advance against dollar isn’t high.

[COLOR="green"]ACM Markets: USD/JPY in narrow range at 87.75 area[/COLOR]
The pair USD/JPY is trading in the narrow range with 87.75 in the centre. It’s likely to keep fluctuating this way as US trade is closed because of the Independence Day. US dollar started rising at the Asian session but didn’t manage to get above 88.00. The following 40 pips decline drove the greenback to the daily minimum at 87.62.
Strategists at ACM Markets claim that Friday’s doji candle may mean that the bearish dynamics of the past 2 week can be a correction.

Resistance levels lie at 88.35 (back side of 3-month downtrend), 88.95 (20 May minimum and recent pivot), then 89.50 (28-29 June maximum). Support levels are found at 87.33 (reaction minimum after Friday’s payrolls data), 86.97 (Thursday’s minimum and 84.82 (2009 minimum).

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

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[COLOR="Green"]TD Securities: euro will fall to $1.13 in the third quarter[/COLOR]
Currency strategists at TD Securities Inc. in Toronto expect that the single currency will keep declining. According to the specialists, it’s possible that euro hits parity with the greenback. This may happen because as the European Central Bank is increasing the volumes of government bond purchases. The ECB started buying bonds on May 10 realizing a part of the rescue package in order to help indebted euro zone countries to get out of the crisis.
TD Securities forecasts euro to fall to $1.13 in the third quarter, to $1.08 – by the end of 2010, approach $1 in 2011 and then rebound. The analysts note that it will be very difficult for the European economies to raise their internal competitiveness level.

[COLOR="green"]Deutsche Bank: central banks' demand for euro declined[/COLOR]
Strategists at Deutsche Bank AG in London note that many central banks switched to other currencies than euro while forming their currency reserves. According to the specialists, since the single currency was launched it was supported by the demand of the central banks that were trying to diversify their reserves. Now the pair EUR/USD will be left without such support for the next few years.

[COLOR="green"]Standard Chartered: euro will fall to $1.10-$1.12 in the third quarter[/COLOR]
Analysts at Standard Chartered in Singapore claim that the recent rebound of the single currency doesn’t mean that the market’s sentiment has changed. Investors are simply getting ready to renew their bearish bets.
In addition, claim the specialists, euro rate will be affected by the slow economic growth of the European region in result of the fiscal tightening measures. Standard Chartered underlines that week euro will be profitable for North European exporters.
According to the analysts’ forecast, the common currency will fall to $1.10-$1.12 in the third quarter and then rebound to $1.30 by 2012.

[COLOR="green"]CIBC: euro will fall to $1.18, then rebound[/COLOR]
Analysts at CIBC in Toronto expect euro to weaken to $1.18 in the third quarter and then rise to $1.20 by the end of 2010 and to $1.24 in the middle of 2011.
The specialists believe that the next half of the year will play the role of defining period and a turning point for the pair EUR/USD. The problems of US growth dynamics will be in the centre of market’s attention. As a result, says CIBC, the Federal Reserve won’t be able to turn soon from monetary easing to the tightening of financial conditions. In case domestic demand doesn’t manage to support US expansion, there will be a necessity of weaker dollar to increase trade benefits.
Regarding futures trade, it’s possible to conclude that most traders don’t think that the Fed will lift up rates Fed until the second quarter of 2011.

[COLOR="green"]Wells Fargo: euro will end the year at $1.20[/COLOR]
Analysts at Wells Fargo in New York expect the single currency to trade within the downtrend during the second half of the year. The specialists claim that euro will depreciate versus Australian, New Zealand’s and Canadian dollars in the medium term. According to Wells Fargo, European currency will trade at $1.20 by the end of 2010 and may hit $1.08 be the end of 2011.
Strategists at Bank of Tokyo-Mitsubishi UFJ Ltd. in London claim that during the next half of the year investors will remain extremely concerned by the prospects of world’s economic growth. As the outlook for the global economy is getting worse, it’s recommended to choose the greenback rather than the currencies of countries that are conducting austerity measures.

[COLOR="green"]Nordea: euro will reach 1.25 by the end of 2010[/COLOR]
Currency analysts at Nordea Bank AB in Copenhagen expect the single currency to trade at $1.25 by the end of 2010 and then decline to $1.15 in 2011.
The specialists claim that currency forecasting got less difficult during the last year than at the beginning of the global financial crisis. According to them, in March 2009 there was danger of another collapse such as Lehman Brothers’ bankruptcy, while since December risk appetite has contracted, so the rates became determined mostly by fundamentals and rate differentials.

[COLOR="green"]Bank of Tokyo-Mitsubishi: sell pounds versus yen[/COLOR]
Strategists at Bank of Tokyo-Mitsubishi UFJ Ltd. in London advise investors to sell pounds versus Japanese yen. Such recommendations are based on the expectations of declining pace of Britain’s economic growth caused by austerity measures such as spending cuts. As a result, the Bank of England will have to keep the benchmark interest rate at the minimal level to stimulate the economy. The specialists forecast that sterling will lose 8% against yen lowering to 123 yen per pound.

[COLOR="green"]BNP Paribas: key Australian rate didn't change[/COLOR]
Australian dollar gained today versus all of its 16 major counterparts. It happened as the Reserve Bank of Australia left its key interest rate unchanged for the second consecutive month in a row and announced that business investment is likely to rise. Currency strategist at Commonwealth Bank of Australia in Sydney note that investors were looking forward to more bearish news.
According to Australian monetary authorities, the current level of the rate seems to fit the situation in the near-term. In addition Australia’s trade surplus climbed to A$1.65 billion ($1.4 billion) in May due to Asian demand for coal and gold. Strategists at BNP Paribas SA in London believe that there’s a lot of optimism about the Australia’s economic outlook.

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[COLOR="Green"]Westpac: dollar may rise to 90 yen [/COLOR]
Analysts at Westpac Banking Corp. expect the greenback to gain versus Japanese yen. Such forecast may be explained by the yield differential between Treasuries and Japanese government bonds. 2-year US yield exceeds the similar Japanese rate by more than 50 basis points.
As a result, the specialists advise investors to buy dollars as American currency is likely to rise to 90 yen. It will be necessary to stop trading if US dollar falls to 86 yen level.

[COLOR="green"]Bank of Korea: Greek default's very possible[/COLOR]
Economists at the Bank of Korea are sure that it’s very possible that Greece won’t be able to repay its obligations as its economy’s contracting making the country’s debt being too high. Korean analysts expect the borrowings of European country to reach 149% of GDP by the end of 2013 that is more that Greek government will be able to maintain. In 2010 Greece’s borrowing will be equal to 133% of GDP.
According to the Bank of Korea, although default is not inevitable, it will certainly result in severe turmoil on the world’s financial markets.

[COLOR="green"]Krugman: US economy needs more stimulus[/COLOR]
Nobel Prize-winning economist Paul Krugman believes that the United States should make all their efforts using all possible fiscal and monetary measures in order not to let the economy return to the recession. The specialist supports the idea of more stimulus that, according to him, is necessary to prevent the problems US and Japan had in1990s.
While many of American policy makers are worried that growing US deficit may cause the same loss of confidence as in the euro zone, Krugman is concerned about whether both short and long-term stimulus measures would be taken to decrease the deficit and whether the authorities will be able to act efficiently.
Krugman suggests using modest tax increases and reasonable spending cuts particularly on health care. The Nobel Prize winner points to the deterioration of the labor market and is in favor of measures to raise employment level as the number of working people dropped in June by 125,000.

[COLOR="green"]China: holdings of US Treasuries[/COLOR]
China’s monetary authorities commented on reduction of its US Treasuries’ holdings claiming that this process shouldn’t be associated with political nature, but only with the market conditions. China regards US debt as safe enough with high liquidity and low trading costs.
Chinese Prime minister Wen Jiabao claimed that United States have to take concrete steps to convinve investors that dollar assets are safe after President Barack Obama increased spending to help the economy end the period of recession. According to the White House forecast, US budget deficit will reach this year $1.6 trillion that is 10.6% of GDP. Moody’s Investors Service Inc. noted on May 25 that if the USA doesn’t take measures to cut the deficit, its top Aaa credit rating may be downgraded.
China has the biggest foreign-exchange reserves in the world and holds the largest amount of US Treasuries overseas. The country’s investments in American securities declined from $939.9 billion recorded in July 2009 to $900.2 billion in April 2010.

[COLOR="green"]Bank of Montreal: CAD won’t deviate from its current range[/COLOR]
Canadian dollar gained today against its American counterpart for the first time in three days after falling close to C$1.0680. Loonie as the currency connected with growth was helped by the increase in global equity and commodity markets.
Analysts at Bank of Montreal in Toronto believe that initial support will be found at C$1.0550. The specialists claim that the pair USD/CAD isn’t likely to deviate much from its current range ahead of the Bank of Canada’s rate announcement on July 20. In June Canadian key interest rate was lifted up from 0.25% to 0.5%.
Strategists at CanadianForex Ltd. expect Canadian dollar to trade between C$1.02 and C$1.08 during the next three months.

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[COLOR="Green"]ICAP: in August Australian rates will be raised [/COLOR]
Australian currency climbed to one-week maximum versus US dollar. Aussie advanced as the growth of country’s employment beat the forecast exceeding it in 3 times. Australia’s employment rolls increased in June by 45,900, while the economists surveyed by Bloomberg News were looking forward only to 15,000 gain.
Labor market improvement may raise inflation pace. According to the Reserve Bank of Australia’s estimate, inflation is likely to exceed its target. As a result, economists at ICAP Australia Ltd. in Sydney are sure that Australian central will lift up interest rates possibly in August.
Strategists at Australia & New Zealand Banking Group Ltd. in Sydney claim that the country’s economy keeps extending and the positive growth dynamics will help Australia since there are poor advance prospects for the world’s economy and make the national currency benefit.

[COLOR="green"]Bank of Tokyo-Mitsubishi: euro won't exceed $1.30 level[/COLOR]
Analysts at Bank of Tokyo-Mitsubishi UFJ Ltd. in London claim that the single currency may stop gaining as it’s getting close to a very strong resistance made by euro’s 16% decline since December at $1.2750.
As a result, the specialists believe that European currency won’t manage to get above $1.30 level. Bank of Tokyo-Mitsubishi is bearish on euro in the long-term. According to the analysts, the common currency will possibly drop below parity with the greenback if Greece or had to restructure its debt or one of the euro zone countries left the monetary block.

[COLOR="green"]KBC Bank: EUR/USD will gain above 1.2454[/COLOR]
Analysts at KBC Market research Desk claim that the pair EUR/USD is gaining strength as it managed to climb to the 2-month maximum at 1.2695 zone.
The specialists note that the single currency’s now approaching the key resistance at 1.2695/ 1.2702 area representing daily channel top of December maximum/broken daily flag bottom of year’s minimum). KBC expects that while euro’s trading above 1.2454 the pair will grow.
Support is found at 1.2601 (daily short-term MA), 1.2566/1.2553 (daily envelope bottom/hourly reaction minimum), 1.2479/1.2467 (this week’s minimum/previous reaction maximum) and 1.2419/1.2405 (weekly envelope bottom/daily Medium Term Moving Average/ break-up hourly).

[COLOR="green"]Goldman Sachs: Aussie will rise to 95 Canadian cents[/COLOR]
Economists at Goldman Sachs Group Inc. claim that Australian dollar may gain against Canadian one as Australia will benefit from Chinese economic growth, while Canada may be affected by the slowdown of US economy.
As a result, the specialists advise investors to buy Aussie looking forward to its advance to 95 Canadian cents. It’s necessary to place stops below 88.5 Canadian cents.
According to Goldman forecast, Australian central bank will raise its key rate from the current level of 4.5% by 25 basis points in 2010 and 75 basis points more in 2011.

[COLOR="green"]Commerzbank: dollar may rise to 90.60[/COLOR]
Technical analysts at Commerzbank AG claim that the greenback may strengthen to 90.60 yen if it manages to hold above support area between 87.15 representing December 2008 and January 2009 minimums and 87.00 yen that is 78.6% Fibo retracement of the growth from November 2009 to May 2010. The pair USD/JPY may climb to 89.23/89.93 where 38.2% and 50% Fibo retracements of the decline from the June maximum are found.

[COLOR="green"]RBC: Bank of England won’t raise the rate[/COLOR]
British pound declined versus the single currency falling to the 2-week minimum. It happened under the impact of negative economic data that means that the pace of UK economic growth’s getting down affected by government spending reduction.
According to Halifax, UK house prices lost 0.6% in June. Manufacturing production added 0.3% in May after April decline by 0.8% but turned out to be below expectations of 0.5% increase.
Currency strategists at Royal Bank of Canada claim that the tightening of the fiscal policy discouraged the expectations of interest rate hike. Bloomberg survey shows that economists expect that the Bank of England’s benchmark interest rate will be left at the current minimal level of 0.5%.

[COLOR="green"]IMF: global growth forecast’s up[/COLOR]
The International Monetary Fund lifted up its forecast for the growth of the world’s economy in 2010 from 4.2% according to April prediction to 4.6%. Such advance will be the most significant since 2007.
The Fund specialists noted that the advance in the first half was above expectations. The risks to the recovery became higher due to the European crisis and are compensated by growth pace of such countries as Brazil, China and India. Among advanced economies the United States and Canada are regarded as best performers.
The IMF underlines that the most important now is to restore financial market’s confidence without affecting economic rebound.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

[FBSanalytics]

[COLOR="green"]Bank of Tokyo-Mitsubishi: dollar may rise to 90 yen[/COLOR]
Analysts at Bank of Tokyo-Mitsubishi UFJ Ltd. claim that the greenback is likely to advance to the maximal level since June 23 at 90 yen in case it overcomes the key area between 88 and 89 yen.
The specialists claim that US dollar has rebounded from its 7-month minimum and become supported by its 5-day MA that turned upwards.
American currency will face the main resistance in July at 88.86 yen level representing 23.6% Fibo retracement of a decline from May 5 maximum of 94.99 yen to the July 1 minimum at 86.97 yen. The next target level of USD/JPY is at 89.65 yen (21-day MA) and 90.03 yen (38.2% Fibo retracement).
If the 5-day MA intersects above the 21-day one making the “golden cross” formation, the pair’s upward trend will strengthen moving towards the 200-day MA at 90.78 yen.

[COLOR="green"]Saxo bank: daily currency forecast[/COLOR]
EUR/USD: if the single currency trades above 1.2670, it may rise to 1.2750. Otherwise, the pair can fall to 1.2600.
USD/JPY: the greenback will be slowly getting upwards to face resistance at 89.0. Support level’s found at 88.40.
EUR/JPY: European currency may attempt overcome resistance at 112.50 on its way to 113.30. If the pair doesn’t manage to advance, it may fall to 111.70.
GBP/USD: pound’s expected to rise to 1.5250, so it’s necessary to buy sterling below 1.5120 stopping below 1.5095.
AUD/USD: Aussie may extend to its previous high at 0.8860, so it’s recommended to buy Australian currency from 0.8690 to 0.8735.
USD/CAD: the pair’s expected to trade between 1.0400 and 1.0480.

[COLOR="green"]TD Securities: AUD advances as risk appetite improves[/COLOR]
Australian currency’s showing the biggest weekly 4.3% advance in 9 months versus the greenback as the market’s sentiment towards the rebound of the world’s economy improved lifting up the demand for riskier higher-yielding assets. New Zealand’s dollar’s also up adding 3.3% this week that’s the most since May 2009.
Investors’ concerns about economic recovery also eased after ECB’s President Jean-Caude Trichet claimed that euro zone’s economy is strong enough and there’s no need for pessimism.
Analysts at TD Securities Ltd. in Singapore expect that the interest rates in Australia will be raised in the near-term and this information will make the national currency benefit as it isn’t yet included in price.

[COLOR="green"]Mizuho: EUR/JPY may advance to 113.43[/COLOR]
Technical analysts at Mizuho Corporate Bank expect that Japanese currency will be trading in 88.50 area, particularly, inside a ‘rectangle’ formed by 87.00 and 88.50/89.00 levels. The pair USD/JPY was showing lower maximums and minimums during last 3 weeks. The specialists believe that it may advance before further slump in July.

As for EUR/JPY, notes Mizuho, the trade seems to be rather volatile. According to the analysts’ forecast, the European currency will demonstrate corrective rebound against the trend on the bears’ market. As a result, the pair may attempt to rise to June’s maximum at 113.43.

[COLOR="green"]KBC Bank: EUR/USD technical comments[/COLOR]
Technical analysts at KBC Bank claim that EUR/USD is trading in the overbought area. According to the specialists, support levels are found at 1.2647/34 (daily envelope/short-term MA), 1.2620 (hourly reaction minimum), 1.2553 (hourly reaction minimum) and 1.2479/58 (reaction minimum/medium-term MA). Resistance levels are situated at 1.2713 (reaction
maximum), 1.2726/30 (broken flag bottom), 1.2757/63 (1st target off), 1.2454 (daily envelope) and 1.2780 (weekly envelope).


[COLOR="green"]US Treasury: no currency manipulators among trading partners[/COLOR]
US Treasury Department finally released yesterday its report on international exchange rate policies that was originally scheduled on April 15. According to the published data, none of the main trading partners of the country was named currency manipulator.
US authorities claimed it’s not clear yet whether the changes in Chinese monetary policy will help to revaluate yuan to the proper level rebalancing the world’s economy. Treasury Secretary Timothy F. Geithner underlined that United States are going to watch closely yuan’s appreciation during the next 3 months to make sure that China’s loyal to its new policy. Geithner was also speaking about the possibilities of increasing of the amounts of American export to China that would help improving the situation at US labor market.
Economists at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York claim that China managed to gain time by removing yuan’s peg to the greenback claiming that the country’s exchange rate policy is as careful as it should be because Chinese faults may affect the global economy.

[COLOR="green"]BNP Paribas: euro under negative pressure[/COLOR]
The single currency went down from its 2-month maximum versus the greenback. Strategists at BNP Paribas note that euro’s recovery began to lose its pace. The specialists claim that the pair EUR/USD will meet rather strong resistance at $1.27 level.
According to BNP Paribas, the outlook for the European currency’s negative. In the medium term euro will be under pressure of concerns about the growth of European economy and euro zone banks’ stress tests.
One more negative factor for euro that is regarded as a funding currency is the demand for high-yielding commodity currencies, for example, Australian dollar.

[COLOR="green"]CAD jumped as jobless rate decreased [/COLOR]
Canadian dollar bounced after the data showed that the country’s unemployment rate dropped by 0.20% and became equal to 7.9% that’s the minimum in 1.5 years. As a result new increase in Canada’s interest rates became more possible.
The greenback lost 0.75% falling versus loonie from 1.0416 at today’s opening to hit the minimum at 1.0334. CAD/JPY rose from 84.72 at the trade opening to new 2-week maximum at 85.66 zone. EUR/CAD slumped by 110 pips to new 1-week minimum at 1.3102.

[COLOR="Green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

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[COLOR="Green"]Ueda Harlow: Prime Minister Naoto Kan lost elections[/COLOR]
Japanese currency hit 2-week minimum versus the greenback. It happened after the election results showed that Democratic Party of Japan headed by Prime Minister Naoto Kan that got 44 seats in the upper house of parliament lost to the opposition Liberal Democratic Party that won 51 seats.
The main reason of Kan’s losing voters’ confidence was the proposition to increase 5% sales tax that put the problems of huge national debt in the center of attention.
Specialists at Standard & Poor’s say that such situation can possibly affect Japan’s debt rating making it more difficult for the authorities to conduct necessary reforms of the public sector and the taxation system.
Analysts at Ueda Harlow Ltd. in Tokyo claim that foreign investors may start selling yen at the signs of political instability.

[COLOR="green"]UBS: sterling will fall to $1.40[/COLOR]
Analysts at UBS expect sterling to fall to $1.40 versus the greenback. As a result, the specialists advise investors to sell pounds against dollars stopping the trade if British currency appreciates getting higher than $1.5270.
UBS claims that there are many factors to make investors being bearish on sterling. According to the analysts, the Bank of England isn’t likely to lift up interest rates as the rest members of the Monetary Policy Committee won’t support Andrew Sentence’s initiative.
In addition, last month’s positive influence of the new budget is already included in pounds rate and can support it no more. More than that, the predicted amounts of budget reduction will affect the pace of UK economic growth.

[COLOR="green"]Mizuho: euro may appreciate to 1.28[/COLOR]
Technical analysts at Mizuho Corporate Bank claim that last week the single currency was struggling hard versus the greenback and managed to close on Friday at 1.2638 that’s above the 9-week MA and first Fibonacci resistance.
The specialists suppose that the pair will be following a rather stable road upwards. This week EUR/USD is likely to consolidate in 1.2600 area. It’s possible that euro will gradually appreciate to 1.2800.
As for the pair EUR/JPY, the specialists believe that this week it will trade sideways above 109.50 but won’t rise above 114.00.

[COLOR="green"]Capital Economics: Europe will benefit from euro zone’s collapse[/COLOR]
Specialists at Capital Economics believe that euro zone’s collapse will stimulate the economies of the European countries saving them from stagnation. Currency union’s break up would help to raise competitiveness and economic growth pace not only for its weaker members, but for the region as a whole.
Indebted Europe’s nations are now suffering from austerity measures needed to reduce huge budget deficits. If Italy, Spain, Ireland, Portugal and Greece drop euro and return to their national currencies, they would be able to let the latter depreciate helping to increase the amounts of exports, claim Capital Economics.
In Germany’s case restored deutsche mark would gain, so the domestic demand would also advance having a positive impact on employment and economic growth. As a result, imports from euro countries will be also supported and European economy will get rebalanced.

[COLOR="green"]Top banks are bearish on euro despite its rebound[/COLOR]
Only a month ago such large financial institutions as Paribas SA, Royal Bank of Scotland Group Plc and UBS AG claimed that the single currency’s moving to the parity with the greenback speaking about the high risk of euro area’s collapse. If someone bought euro at the 4-year minimum of $1.1877 hit on June 7 would have gained 6.4% when it rose to $1.2641 on July 9. Euro’s depreciation was also quite beneficial for European, especially German, exporters.
Strategists at UBS admit that the negative forecasts very too strong. Even though bond markets of the currency union are still very weak, there’s no more risk of the euro zone’s break up. Never the less, analysts keep expecting that debt crisis may spread from indebted Greece and Spain to Germany and France. The specialists note that the macroeconomic fundamentals are against euro. Fiscal tightening measures will lead to the decline in the region’s economic growth pace forcing the ECB to keep the rate at the minimal level affecting euro in the second half of 2010.
The expectations of BNP Paribas haven’t changed. According to the bank, the ECB’s monetary easing policy will diminish the demand for the European currency making its rate decline to $1 by March 2011.
Strategists at RBS Securities believe that European bailout program can do nothing more but put off the crisis and that by the end of 2011 euro will fall to $1.10. If the crisis expands after the Greek default, the common currency may slump below the parity.

[COLOR="green"]Ishimoku
Weekly GBP/USD.[/COLOR]
Bull didn’t manage to maintain the rebound at the pound’s market. The bottom line of the Cloud and horizontal Kijun-sen (4) didn’t let the prices further up. In addition, the candle formed the week before last turned out to be the model of the “hanging man” that was also confirmed by the last black candle.
It’s possible that the market’s rebound has finished and the downtrend may resume in the near-term.


[COLOR="green"]Daily GBP/USD.[/COLOR]
As expected, on the daily chart the prices tried to rebound from the level of Tenkan-sen line. Never the less, all attempts were in vain. As a result, on Friday bears decided to take initiative and began confidently pulling the market downwards. The Turning line (3) may fail supporting the rate and the lowered Senkou Span B (2) is one of the main signs of pound’s decline versus the greenback in the near time.
That’s why it’s recommended only to sell this week.


[COLOR="green"]Weekly USD/JPY.[/COLOR]
The pair USD/JPY has suddenly started to correct downwards and formed on the candle chart “piercing pattern”.
Never the less, Ishimoku Cloud keeps extending downwards due to the falling Senkou Span (1), while Tenkan-sen and Kijun-sen formed the “dead cross” figure.
It’s possible that upward correction won’t last for a long time – only before the prices meet the Turning line (3). After Tenkan-sen generates resistance the downtrend will be resumed.


[COLOR="green"]Daily USD/JPY.[/COLOR]
On the daily chart the market, as it was expected, consolidated at the beginning of the week around the opening prices. However, on Wednesday bulls managed to change the situation in their own favor: the market pushed off from 87.00 and jumped upwards breaking inside Tenkan-Kijun channel (3, 4).
Never the less, this rapid progress is regarded only as correction as the general situation remains downward: Ishimoku Cloud is descending; Chinkou Span lies under the prices chart.
That’s why at the beginning of the next week the prices may keep sluggish rebound up to the middle of Tenkan-Kijun channel. However, after that the rate will return to the Turning line (3).


[COLOR="Green"]Weekly USD/CHF.[/COLOR]
It was the fifth week that ended by the total bulls’ defeat. The bulls didn’t managed even slightly restore the franc’s market. The rate moves towards the bottom line of the Ishimoku Cloud inside which it’s found now.
Tenkan-sen (3) and Senkou Span A (2) declined even stronger pointing at the negative sentiment of the market. Never the less, the “golden cross” formation (5) is still in its force.


[COLOR="green"]Daily USD/CHF.[/COLOR]
There was one more belt-hold line on the daily chart that may work this time and reverse the market upwards.
There are 2 stimulating moments. Firstly, the prices are now near rather strong support at the bottom line of the Cloud at 1.0500. In addition, Chinkou Span that had a maximal deviation from the price chart is likely to make bears stop their trade.
That’s why it’s possible that prices rebound this week and break through the Turning line (3).


[COLOR="Green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]

[adria]

Hey there,

The Dollar was mixed versus the majors, weakening versus the higher yielding currencies as risk appetite rose again. U.S equity markets rose on a market optimism posting their sharpest weekly gains since October. Earnings’ season starts and S&P companies are expected to show an impressive gain of 27% from last year’s 2nd quarter earnings. The current assessment is that the Dollar will remain choppy until a major Sentiment change occurs. NASDAQ and Dow Jones rallied by 5% and 5.28% respectively. Gold (XAU) finished unchanged closing at 1210$.Crude oil gained by 5.48% closing at 75.25. Looking ahead,Trade Balance is expected on Tuesday. Retail Sales and FOMC Meeting Minutes will be released on Wednesday. Weekly Unemployment Claims and PPI are expected on Thursday. CPI and University of Michigan Consumer Sentiment will be released on Friday.

[FBSanalytics]

[COLOR="Green"]JPMorgan Chase: AUD и NZD will rise to 9-week maximums[/COLOR]
Analysts at JPMorgan Chase & Co. claim that Australian and New Zealand’s dollars are likely to advance to 9-week maximums or even more in case they manage to get above June maximums.
Aussie is expected to rise to 200-day MA at 89.76 US cents and then toward 90.78 cents close to 76.4% Fibo retracement of decline from 2010 maximum in April to the minimum in May. The currency meets important resistance close to June maximum at 88.59 cents.
Kiwi may strengthen to 72.15 cents and then to 73.30 cents close to the April maximum. The New Zealand’s dollar’s 200-day MA lies at 71.19 cents and it exceeded last month’s maximum of 71.60 cents on June 23. Resistance for the currency is situated between 71.20 and 71.60 cents.

[COLOR="green"]Pimco: US bonds are safer than European[/COLOR]
Specialists at Pacific Investment Management Co. admitted to have been transferring funds from European debt to US Treasuries during several past months as they regard the latter as safer assets. In addition, Pimco advises investors to turn to the bonds in Canada, Australia, China, South Korea, Brazil and Mexico avoiding the ones of Greece, Portugal, Spain and Italy.
According to the analysts, the United Stated is still regarded as flight-to-quality country, while the greenback keeps being the world’s most important reserve currency and it’s very unlikely that the situation may change in favor of euro.
Treasuries’ 2010 advance was due to concern about possible defaults in some euro zone countries and US inflation rate that hit the minimal level in four decades that helps to preserve the value of a bond’s fixed payments.

[COLOR="green"]Mizuho: yen's trading sideways[/COLOR]
Technical analysts at Mizuho corporate Bank note that Japanese currency was trading sideways during the last 5 days versus all of its counterparts. According to the specialists yen’s rate is likely to continue moving in the same manner.
The specialists think that the pair USD/JPY will be trading above 87.00. Yesterday’s small spike maximum against first Fibo resistance means the temporary maximum in 89.00 area, while daily and weekly MAs suggest a short position.
As for the pair EUR/JPY, it’s also stuck in rather small zone and will be trading flat above 109.50, but not higher than 114.00.

[COLOR="green"]Moody's: Portugal's credit rating’s decreased[/COLOR]
The single currency survived significant decline today after ratings agency Moody's decreased Portugal’s credit rating by 2 steps to A1 that means growing debt burden and weak economic growth prospects. As a result, the concerns about indebted peripheral euro zone countries strengthened again.
Currency strategists at Royal Bank of Canada Europe Ltd. claim that the downgrade will once again turn the market’s attention to the European debt problems. Even though this information didn’t shock investors it made a negative pressure on euro.
In addition, German investor confidence declined for a third month in July. ZEW index of investor and analyst expectations fell from 28.7 in June to a 15-month low of 21.2, while economists surveyed by Bloomberg were looking forward only for a decline to 25.3%.

[COLOR="green"]Wolfgang Schaeuble: stress tests will restore investors' confidence[/COLOR]
One more factor of euro’s decline is the concern about euro zone banks’ stress tests results. European Union regulators are examining the strength of 91 banks to determine whether they can survive potential losses on sovereign-bond holdings.
European authorities are trying to make banks refinancing themselves in the market before applying for the state support. German Finance Minister Wolfgang Schaeuble claimed today that banks that fail stress tests will “in the worst case” need government aid to strengthen their balance sheets noting that the tests will make the current situation clearer.
EU finance ministers will gather in Brussels today to discuss the procedure of stress tests and the disclosure of its findings.
Analysts at Tokyo Tomin Bank Ltd. claim that it may happen that stress tests won’t be enough to restore investors’ confidence in European banking system and economy in general affecting euro rate.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]