Fundamental review of the Forex market for November 25, 2013
November 25, 2013 7:30 am
EUR/USD, GBP/USD.
On Friday, instead of consolidation, the euro formed a fully-fledged rebound. The British pound rose to the double top with highs in early and late October. It was observed amid strong economic data on Ifo Business Climate index in Germany in November, 109.3 vs. 107.4 in October. In fact it may mean that after weak data on PMI in France, which came on Thursday, and most importantly, a 0.1% decline of GDP in France in the third quarter; the investors may regard the only economy in the Eurozone, which registers increase and the investors hope for it. However, it is the current reaction, such perception of the situation cannot be observed with the investors. In fact we observed the next speculation amid lack of more important indicators. In the current situation danger for the bears may be hidden in the bulls’ desire to continue the speculations.
On Sunday, Nicola Sturgeon, the Deputy First Minister of Scotland, said that in case of positive voting during the Scottish independence referendum which is scheduled for September 18, 2014, the complete leaving the United Kingdom will take place on March 24, 2016. In the near future the residents of Scotland will be provided with a detailed plan of the separation process and the perspectives after the independence is gained, so-called White Paper. Though, it is too early to worry about the sustainability of the British economy, this event may have timely psychological pressure.
At 13:30 UTC+4 data on the UK BBA Mortgage Approvals in October, forecast 45.2K vs. 43.0 in September. At 19:00 UTC+4 data on pending Home Sales in the US is revealed; forecast 2.2% vs. -5.6% in September.
We expect local continuation of the growth for the euro and the pound; the euro will rise to 1.2575/95 and the British pound will rise to 1.6260 and we are preparing for the reverse to the downside.
AUD/USD.
Little time has passed since the last announcement of the Reserve Bank of Australia about a desirable decline of the Australian dollar. On Friday Governor of the Reserve Bank of Australia Glenn Stevens announced the possible currency intervention aimed at decrease of the “high” currency arte of the Aussie. We do not consider that until the second decade of December, when the Fed’s decision of the QE programme is announced, the RBA will take any measures. If QE3 is preserved with current volumes we may consider such a unpopular, ineffective in the medium-term decision. Until that we can observe only verbal interventions; however, if the weakening of the US dollar continues, then oil, ore and metals in the local situation may restrain the growth of the Australian dollar without any interventions. The major factor of the oil decline is settlement about Iranian nuclear programme, according to it Iran refuses the uranium-enrichment process, degrades 200 kg of the enriched uranium up to 5%, provides the International Atomic Energy Agency (IAEA) with the control over its nuclear programme and gets dampening of international sanctions.
Our bearish targets for AUD/USD are 0.9085/115, 0.8950/80, and 0.8840/70.
We also expect the weakening of the Australian dollar in its cross-rates. In particular, AUD/CAD to 0.9450/80, as the balance of these two commodity rates is shifted towards more stable Canadian dollar.
USD/JPY.
On Friday, the Japanese yen rose 11 points, which did not change the whole picture of the expectations of the wide-range sideways movement with upward pressure. After the neutral report of the Bank of Japan, the investors’ attention is completely switched towards the US stock market. They say about market correction for 5-8%. We consider that the US monetary policy may force the investors to sell shares in order to force then to pay taxes for this year. Meanwhile, if QE3 is trimmed since December along with the appointment of new Fed’s governor may be perfect condition that the New Year rally this year may not be observed.
At the moment nothing happens and we may see the price in the area of the next target 102.30 and then 102.60 but it becomes more risky to buy day by day.
The material has been provided by InstaForex Company – www.instaforex.com
EUR/USD, GBP/USD.
On Friday, instead of consolidation, the euro formed a fully-fledged rebound. The British pound rose to the double top with highs in early and late October. It was observed amid strong economic data on Ifo Business Climate index in Germany in November, 109.3 vs. 107.4 in October. In fact it may mean that after weak data on PMI in France, which came on Thursday, and most importantly, a 0.1% decline of GDP in France in the third quarter; the investors may regard the only economy in the Eurozone, which registers increase and the investors hope for it. However, it is the current reaction, such perception of the situation cannot be observed with the investors. In fact we observed the next speculation amid lack of more important indicators. In the current situation danger for the bears may be hidden in the bulls’ desire to continue the speculations.
On Sunday, Nicola Sturgeon, the Deputy First Minister of Scotland, said that in case of positive voting during the Scottish independence referendum which is scheduled for September 18, 2014, the complete leaving the United Kingdom will take place on March 24, 2016. In the near future the residents of Scotland will be provided with a detailed plan of the separation process and the perspectives after the independence is gained, so-called White Paper. Though, it is too early to worry about the sustainability of the British economy, this event may have timely psychological pressure.
At 13:30 UTC+4 data on the UK BBA Mortgage Approvals in October, forecast 45.2K vs. 43.0 in September. At 19:00 UTC+4 data on pending Home Sales in the US is revealed; forecast 2.2% vs. -5.6% in September.
We expect local continuation of the growth for the euro and the pound; the euro will rise to 1.2575/95 and the British pound will rise to 1.6260 and we are preparing for the reverse to the downside.
AUD/USD.
Little time has passed since the last announcement of the Reserve Bank of Australia about a desirable decline of the Australian dollar. On Friday Governor of the Reserve Bank of Australia Glenn Stevens announced the possible currency intervention aimed at decrease of the “high” currency arte of the Aussie. We do not consider that until the second decade of December, when the Fed’s decision of the QE programme is announced, the RBA will take any measures. If QE3 is preserved with current volumes we may consider such a unpopular, ineffective in the medium-term decision. Until that we can observe only verbal interventions; however, if the weakening of the US dollar continues, then oil, ore and metals in the local situation may restrain the growth of the Australian dollar without any interventions. The major factor of the oil decline is settlement about Iranian nuclear programme, according to it Iran refuses the uranium-enrichment process, degrades 200 kg of the enriched uranium up to 5%, provides the International Atomic Energy Agency (IAEA) with the control over its nuclear programme and gets dampening of international sanctions.
Our bearish targets for AUD/USD are 0.9085/115, 0.8950/80, and 0.8840/70.
We also expect the weakening of the Australian dollar in its cross-rates. In particular, AUD/CAD to 0.9450/80, as the balance of these two commodity rates is shifted towards more stable Canadian dollar.
USD/JPY.
On Friday, the Japanese yen rose 11 points, which did not change the whole picture of the expectations of the wide-range sideways movement with upward pressure. After the neutral report of the Bank of Japan, the investors’ attention is completely switched towards the US stock market. They say about market correction for 5-8%. We consider that the US monetary policy may force the investors to sell shares in order to force then to pay taxes for this year. Meanwhile, if QE3 is trimmed since December along with the appointment of new Fed’s governor may be perfect condition that the New Year rally this year may not be observed.
At the moment nothing happens and we may see the price in the area of the next target 102.30 and then 102.60 but it becomes more risky to buy day by day.
The material has been provided by InstaForex Company – www.instaforex.com
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