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EUR/JPY: technical levels Tuesday, April 17, 2012 - 08:15 According to JPMorgan Chase technical analysts, the EUR/JPY is approaching to its support zone (104.25 -104 yen). On the Fibonacci chart, the 50% retracement between a January low and a March high lies at 104.24 yen. Analysts expect the currency pair to bounce from these levels. Strategists at Jyske Bank recommend selling EUR/JPY with a stop-loss at 107.52 yen. In their view, due to strong declines on Friday and Monday this is the first significant resistance for the pair. However, on a daily Ichimoku chart resistance is seen at 106.15-106.30 levels (above the cloud). Moreover, the RSI indicates divergence. Analysts see strong support in the 103.5-104 yen area. Chart. Daily EUR/JPY EUR/JPY: technical levels // FBS Markets Inc. Be successful with FBS

Japan pledged $60 bln to expand IMF’s firepower Tuesday, April 17, 2012 - 07:30 Japan said today that it provide $60 billion in loans to the International Monetary Fund, which acts as a lender of last resort for governments, in order to increase the fund's financial firepower and stop the contagion with the euro zone debt crisis. Japanese Finance Minister Jun Azumi encouraged European authorities to take more action in return. The Fund wants to boost its funding by $600 billion. However, the IMF will face serious difficulties trying to secure firm commitments at meetings of the fund, the World Bank and the G20 this week: the US has showed reluctance to find troubled economies, while such nations as China, Brazil and Russia don’t rush to give commitments either. The IMF Managing Director Christine Lagarde claimed last week that the fund may need less money as economic risks had subsided. Reuters reports that $400-$500 billion sum seems more likely. Euro zone countries have committed about $200 billion and other European Union nations an additional $50 billion. There was speculation that big US bank have been buying on behalf of the IMF over last 24 hours. This process may continue during the European and North American sessions. Image from sodahead.com

Euro down before Europe's data Tuesday, April 17, 2012 - 06:45 The common currency weakened against the greenback before Europe’s data releases. German ZEW Economic Sentiment index is forecasted to decline from 22.3 (a 21-month high) to 19.7. Spain will sell 12-month and 18-month bills today. On the back of the deepening crisis country’s borrowing costs may grow. Yields on the nation’s 10-year notes touched 6.16% yesterday, edging toward the 7% level that may require international help. The euro’s yesterday’s growth (EUR/USD strengthened to $1.3147) is nothing but a short covering. Early Tuesday the common currency trades in the $1.3090 area. Resistance lies at $1.3147 (yesterday's top), $1.3264 and $1.3380 (April 2 maximum), while support – at $1.2994 (yesterday’s low), $1.2880 and $1.2754. Moving below yesterday’s bottom or above yesterday’s high may define a trend of the euro. Chart. Daily EUR/USD Euro down before Europe's data // FBS Markets Inc. Be successful with FBS

RBS: still bearish on EUR/GBP Monday, April 16, 2012 - 11:30 Analysts at RBS claim that the outlook for the single currency versus British pound is still extremely bearish. The specialists point out that EUR/GBP broke lower after the period of sideways consolidation at the beginning of this year. In the medium term for the pair is still at 0.8069. There may be corrections within the downtrend at 0.8192 (the final retracement level from the credit crunch rally), 0.8140 (August 2010 minimum and the level from which the market rallied hard back to 0.8900) and 0.8069 (2010 low and level which has been underpinning price action since then). Chart. Daily EUR/GBP RBS: still bearish on EUR/GBP // FBS Markets Inc. Be successful with FBS

Key options expiring today Monday, April 16, 2012 - 11:00 Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT). Here are the key options expiring today: EUR/USD: $1.3025, $1.3100, $1.3115, $1.3120, $1.3150; GBP/USD: $1.5850; EUR/CHF: $1.2000; USD/CHF: 0.9200; USD/JPY: 80.00; AUD/USD: $1.0280, $1.0350; EUR/AUD: 1.2650; USD/CAD: 1.0000. Photo from Reuters Key options expiring today // FBS Markets Inc. Be successful with FBS

Barclay’s: short-term GBP outlook turned bearish Monday, April 16, 2012 - 10:45 Analysts at Barclay’s stopped being on British pound as it fell versus the greenback below $1.5900. The specialists claim that the pair GBP/USD will now fall to $1.5800 and $1.5770 and then probably to $1.5610. Chart. H4 GBP/USD Barclay Be successful with FBS

BoC is unlikely to raise interest rate Monday, April 16, 2012 - 10:00 The Bank of Canada meets on April 17. The analysts expect the central bank to keep the rates unchanged at 1%. Then the BOC will release full domestic and international assessment April 18. On Thursday, April 12, Canada’s trade surplus declined to C$0.3 billion vs. C$2.2 billion expected and C$1.9 billion in February. However, many analysts believe the economy will continue demonstrating moderate growth. The median forecast in a Reuters poll of 40 economists shows the next interest rate hike will come in the second quarter of 2013. RBC Economics: With U.S. auto sales remaining robust during the first quarter of 2012, we expect the Canada’s automotive and energy export to return to positive growth in subsequent months. We forecast an annualized increase in GDP of 2.5%. The external risks remain sizeable, so the BOC is unlikely to raise the overnight interest rate level. CIBC Economics: The February trade report was downbeat for estimates of Q1 growth, but the quarterly GDP is still expected to grow by 2%. The BOC is becoming less worried about Europe blowing up and more encouraged by U.S. economic performance, but a change in the policy rate soon is unlikely. BMO Capital Markets: As long as the U.S. data remain unstable and the European debt problems unresolved, the BoC will be loathe adding negative drag to the domestic economy by tightening lending conditions. However, some specialists warn the Bank of Canada may change its monetary policy tone to a more hawkish. UBS: The BoC’s growing fears about household leverage and rapid house price gains have led to suggestions that it may even resort to rate hikes purely to mitigate bubble risks. Chart. Daily USD/CAD BoC is unlikely to raise interest rate // FBS Markets Inc. Be successful with FBS

BT: bearish view on euro and Aussie Monday, April 16, 2012 - 09:45 Analysts at fund manager BT Investment Management expect Australian dollar and euro lose versus the greenback to 0.9500 and $1.25 respectively. The specialists note that “the next leg of the European crisis is building now” and all eyes are for Spain. In their view, the ECB will have to resume bond buying. As for Australia’s prospects, the firm says that the nation’s growth is “clearly slowing” due to the negatives from China and Treasurer Wayne Swan’s plans for record budget cuts. Economists surveyed by Bloomberg expect Australian’s GDP to add 3-3.5% in 2012, but BT Investment Management thinks this figure is lower and equals 2.5%. Chart. Daily AUD/USD BT: bearish view on euro and Aussie // FBS Markets Inc. Be successful with FBS

Commerzbank: comments on GBP/USD Monday, April 16, 2012 - 09:00 Analysts at Commerzbank claim that GBP/USD’s uptrend versus the greenback seems vulnerable as the pair didn’t manage to overcome resistance at $1.6000. The specialists say that if sterling breaks below $1.5821 (uptrend line) it will fall to $1.5602 (March 13 minimum) and $1.5415 (January 19 minimum). There will be some support at $1.5805 (April low) and $1.5770 (March 22 minimum). As for resistance, it’s found at $1.5905 (Fibonacci retracement), $1.6037 (March maximum) and $1.6092 (November 2011 maximum). Chart. Daily GBP/USD Commerzbank: comments on GBP/USD // FBS Markets Inc. Be successful with FBS

Comments on EUR/USD Friday, April 13, 2012 - 09:30 The single currency is trading today on the downside versus the greenback as it was unable to overcome resistance of 50-day MA. The pair EUR/USD keeps trading in range between $1.30 and $1.35 within which it has been squeezed since January. Analysts at Commerzbank believe that euro will be able to break out of this range only in case something big happens such as QE3 or the escalation of the debt crisis in Europe. The situation in the euro area’s still uncertain: while Italy survived this week’s debt auctions well enough, Spanish 10-year yields remain dangerously close to 6%. The reaction to the news that Spain banks borrowed 316.3 billion euro from ECB in March up from 169.8 billion euro in February was, however, rather muted as EUR/USD’s still above $1.3100. The European currency was dragged lower mostly by the talk that the ECB may restart its government bond purchase program. On the one hand, such action would ease the stress at bond market; on the other, investors may take such news as a very bad sign. All in all, from the fundamental point of view, the market’s attention which has returned to Europe in the recent weeks will be staying here for now. EUR/USD is now trading between 50-day MA on the upside and 100-day MA on the downside. Chart. Daily EUR/USD Comments on EUR/USD // FBS Markets Inc. Be successful with FBS

RBS: trading updates for GBP/USD Friday, April 13, 2012 - 09:00 Analysts at RBS remain long on British pound versus the greenback placing the target at $1.6033/72 (tweezer top formed in November) and stops at $1.5790. The strategy is to buy GBP/USD on the dips to $1.5850. The specialists warn investors, however, that if sterling breaches support of $1.5790, they should switch to short positions citing a “head and shoulders” mode watching for $1.5666 and $1.5585. Chart. Daily GBP/USD RBS: trading updates for GBP/USD // FBS Markets Inc. Be successful with FBS

Standard Chartered: forecasts for majors Friday, April 13, 2012 - 08:30 Analysts at Standard Chartered updated ctheir currency forecasts from Q2, 2012. The specialists are bullish on the greenback and negative on the single currency as teh euro zone's facing the treat of recession and will likely keep suffering from fiscal issues. Included in the note is their euro exchange rate forecast call. Standard Chartered: forecasts for majors // FBS Markets Inc. Be successful with FBS

Commerzbank: bearish view on euro Friday, April 13, 2012 - 07:45 Technical analysts at Commerzbank stick to their bearish view on the prospects of the single currency versus the greenback. The specialists underline that EUR/USD failed to break resistance at $1.3207 (the 55-day MA). In their view, euro’s decline will resume if it breaks below support line at $1.3035. In this case euro will slide to $1.2974/54 (February minimum and 61.8% Fibonacci retracement) and below that to $1.2624 (January minimum) and finally to $1.2000. Chart. Daily EUR/USD Commerzbank: bearish view on euro // FBS Markets Inc. Be successful with FBS

UBS lowered forecasts for USD/CAD Friday, April 13, 2012 - 06:30 Analysts at UBS think that though the Federal Reserve will start normalizing its policy the next year, the Bank of Canada will start moving in this direction earlier (the reasons – recent strength in Canada’s employment data and the fears about the housing price bubble). The specialists think that such expectations aren’t prices in the exchange rates and expect the greenback to get under pressure versus its Canadian counterpart, so they lowered forecasts for USD/CAD from 1.0100 to 0.9900 in a month and from 1.0300 to 0.9800 in 3 months. Chart. Daily USD/CAD UBS lowered forecasts for USD/CAD // FBS Markets Inc. Be successful with FBS

Friday, April 13: economic news and outlook Friday, April 13, 2012 - 06:15 China’s growth slowed down The market has been expecting Chinese economy to slow down, but the actual data came even worse than the projections: the nation’s GDP added only 8.1% in Q1 vs. the forecast of 8.4% and down from 8.9% increase in the last 3 months of 2011. This is the slowest expansion in almost 3 years. The data has naturally hit Australian dollar (remember Australia exports commodities to China?). Aussie weakened versus all of its major peers, the pair AUD/USD went down from this week’s maximum at $1.0451 reached today to the levels in the $1.0400 area. Fed speakers Fed Bank of New York President William C. Dudley claimed yesterday that it’s “too soon to conclude that we are out of the woods” and that the rates should be held at the minimal level until the end of 2014. Ben Bernanke speaks later today amid the speculation that the Federal Reserve will conduct additional easing as the economic recovery isn’t going as smooth as the central bank thought it would. American currency weakened versus the majority of its peers ahead of the CPI release later today: the pace of consumer prices growth is seen declining from 0.4% in February to 0.2% in March. Slowing inflation would give the Fed more room for another QE. Preparing for additional stimulus from Japan The greenback and the single currency are strengthening against Japanese yen for the third day as the market’s looking forward to more easing from the bank of Japan (though USD/JPY was affected by the weak Chinese data). Today the nation’s ministers will discuss the problem of deflation. Asian stocks: Nikkei +1.2%; HK +1.6%; Shanghai +0.25%. Chart. Daily AUD/USD Friday, April 13: economic news and outlook // FBS Markets Inc. Be successful with FBS

EUR/USD up on US data Thursday, April 12, 2012 - 15:15 On Thursday (16:30 GMT) a bunch of negative data was released in US. US initial jobless claims unexpectedly increased to 380K compared with the forecast 355K. Producer Price Index (PPI) also didn’t come up with the economists’ expectations: 0.0% vs. a forecasted rise 0.3%. The trade deficit contracted to -46.0B vs. forecasted -51.9B, but mostly due to the decline of imports. The currency pair EUR/USD trades in the 1.3175 area (a one-week high). Resistance lies at $1.3200 and $1.3235. On the downside, support might act at $1.3095, $1.3040 and $1.2995. Chart. H4 EUR/USD EUR/USD up on US data // FBS Markets Inc. Be successful with FBS

RBS: trading AUD/USD Thursday, April 12, 2012 - 13:00 Analysts at RBS recommend buying the Aussie vs. the U.S. dollar at the current levels, with a stop at $1.0210 at targeting at $1.0612. Strategists see support at $1.0320 (recent lows), $1.0240 (61.8% retracement from a Dec. 15 low) and $1.0201 levels, and resistance – at $1.0496 (recent support, now resistance) and $1.0612 (23.6% retracement from a Dec. 15 low). According to RBS analysts, the Australian dollar will be the best performing currency in April due to seasonal patterns. Specialists also point that a lot of negative news were priced into the AUD/USD, that’s why they advise to play on the dips now. Chart. Daily AUD/USD RBS: trading AUD/USD // FBS Markets Inc. Be successful with FBS

World Bank trimmed China’s growth forecast Thursday, April 12, 2012 - 12:30 The World Bank reduced forecast for China’s 2012 GBP growth from 8.4% to 8.2% (13-year minimum). According to the economists, there’s “potential for growth to be bumping along the bottom for longer”. “We see cyclical weakness continuing, but that the prospects for a soft landing remain high,” said the specialists noting that Chinese authorities have enough resources to help bolster the economy if risks to the downside accelerate. The main problems of Chinese economy are the decreased external demand for its goods and risks connected with the real estate market. Note that the World Bank increased 2013 forecast for China from 8.3% to 8.6% expecting activity to rebound next year. Official data on the nations Q1 economic growth is released on Friday, April 13. Consensus forecast is a gain of 8.4% down from 8.9% in the final 3 months of 2011. World Bank trimmed China Be successful with FBS

Euro zone: Italian auction, Greece, weak data Thursday, April 12, 2012 - 10:00 EUR/USD reiterated from today's highs at $1.3145 affected by the latest news’ releases. Italian government sold BOT of 4.884 billion euro meeting the targeted amount, though the yields were higher – not an entirely positive picture. Here are the details: - 2.884 billion euro of 2015 BTP yield 3.89 % (from 2.76%) out of a targeted 2-3 billion euro; - 2 billion euro of three-off-the run issues due in 2015, 2020, 2023. The off-the-run sale had been announced for an overall amount of between 1.0 billion and 2 billion euro. The overall bid-to-cover was 2.20. In addition, Greek unemployment rate rose from 21.0% in December to 21.8% in January. Moreover, euro zone’s industrial production declined by 1.8% (y/y) in February. Chart. H1 EUR/USD Euro zone: Italian auction, Greece, weak data // FBS Markets Inc. Be successful with FBS

UK trade deficit wider than expected Thursday, April 12, 2012 - 09:30 Britain’s trade deficit grew to £8.7 billion in February from revised £7.8 billion in January, despite the forecasted gap of £7.7 billion. The export slippage is caused mostly by decreasing trade volumes with non-EU countries (U.S., China and Russia). According to recent surveys, Britain has just returned to a moderate economic growth after the threat of a recession blew over. However, a slowdown in Britain's main trading partner, the euro zone, could weigh on exporters' prospects. The market, however, is reacting on the negative trade balance data oddly: cable climbed to a one-week high $1.5955. Commerzbank: GBP/USD is rebounding near term from $1.5827 level (55-day MA). We expect the pair to find intraday resistance at $1.5935/65 and continue to view the market as having topped at $1.6062. Resistance for the pair lies at $1.5937 (Apr. 11 maximum), $1.6062 (April maximim), and $1.6200 (psychological resistance), support – at $1.5850 (Apr. 11 minimum), $1.5724, and $5600 (lowest since March 12). Chart. Daily GBP/USD UK trade deficit wider than expected // FBS Markets Inc. Be successful with FBS

BNY Mellon: USD/JPY is to get higher Thursday, April 12, 2012 - 08:30 Analysts at Bank of New York Mellon think that Japanese authorities will refrain from active monetary interventions for now using only verbal comments ahead of the next Bank of Japan’s meeting at the end of April. BNY Mellon reminds that the quantitative easing conducted by the BOJ in February was much more effective than the previous intervention. According to the economists, Japanese Ministry of Finance “has (sensibly) tried to keep a degree of unpredictability about its operations in order to preserve their effectiveness.” So, the bank’s main scenario is more asset purchases on April 27 and positive near-term outlook for the greenback. USD/JPY may rise to 83 and 84 yen. Chart. Daily USD/JPY BNY Mellon: USD/JPY is to get higher // FBS Markets Inc. Be successful with FBS

Beige book: no surprises Thursday, April 12, 2012 - 08:00 According to the Beige book report, released on Wednesday, each of the 12 U.S. bank districts keeps expanding at a modest-to-moderate pace from mid-February through the end of March. The Fed pointed at stronger manufacturing sector, consumer spending, better demand for professional business services, increased tourism and some improvement in the real-estate market. The survey also noted that hiring was steady or increased in most of the country. In general, the estimates remain unchanged from previous Beige book release, but with slightly increased optimism on the back of positive March U.S. data. Beige book: no surprises // FBS Markets Inc. Be successful with FBS

AUD/USD grows after employment data Thursday, April 12, 2012 - 07:15 The Australian dollar jumped to a one-week high on the backdrop of the surprisingly positive employment data. Strong labor market figures lower concerns that the RBA will cut interest rates from current 4.25% level. Australia’s 3- and 10-year bond yields increased 8 and 3 basis points respectively. In March 44K new jobs were created in Australia versus 6.4K forecasted and 15.4K decline in February. The unemployment rate remains unchanged at 5.2%, compared with forecasts to grow to 5.3%. BNP Paribas specialists expect the Aussie to trade at $1.0500 level in Q2. Moreover, China’s GDP data on Friday may surprise the market and create additional support for AUD/USD. However, analysts at Commerzbank remain bearish on the Aussie vs. the greenback. In their view, there is a strong resistance on the $1.0405 level. They expect the pair to weaken to $0.9863 (Dec. 15 minimum). Early Thursday AUD/USD strengthened to $1.0391, the highest level since April 3. Chart. Daily AUD/USD AUD/USD grows after employment data // FBS Markets Inc. Be successful with FBS

Short-term outlook for loonie Thursday, April 12, 2012 - 07:00 Canadian dollar hit yesterday the minimal level against its US counterpart since the end of January: USD/CAD posted high at 1.0051 before returning today to the parity level. On the fundamental part, CAD has its main drivers rising equities and oil prices in action. The current fluctuations are by the approaching release of the Bank of Canada’s monetary policy report (the central bank will meet on April 17 and publish quarterly report on April 18). From the technical point of view, there may be a “double top pattern” confirmed in case of steady trading back below the neckline of the pattern at 1.0010, so we may expect more bearish moves today. Scotia Capital: buying loonie seems OK for now, though one should close USD/CAD shorts if the pair closes above 1.0050/1.0070 breaking out of the range within which it has been stuck for months. RBS: bullish on CAD versus euro and US dollar. As conditions in Canada, the United States and the world as a while have improved, the BOC should revise up the domestic and international outlook. Data to watch: Canada’s February trade balance (forecast: 2.2 billion surplus), New housing price index (forecast +0.2% m/m in February). Chart. H4 USD/CAD Short-term outlook for loonie // FBS Markets Inc. Be successful with FBS

Key options expiring today Thursday, April 12, 2012 - 06:15 EUR/USD: $1.3050, $1.3120, $1.3170, $1.3175; USD/JPY: 81.00, 81.45, 81.50, 82.00; EUR/GBP: 0.8320; AUD/USD: $1.0250, $1.0300. Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT). Photo Brendan Mcdermid / REUTERS Key options expiring today // FBS Markets Inc. Be successful with FBS