DAILY REPORT
FXDaily, Forex Club Research
DAILY REPORT
Andrei Tratseuski, Currency Analyst
Wednesday, July 27, 2011
Pair
Fundamentals
EUR/USD GBP/USD USD/JPY AUD/USD USD/CAD USD/CHF NZD/USD Gold Oil S&P 500
Technical Analysis
Objective/Comments US Debt Ceiling UK GDP at 0.2% Danger Zone All-Time High Up on hawkish BOC Risk Aversion Vehicle Potential Interest rates Hike Today Near All-Time High Risk Appetite Play Rally Continues
Key Resistance 1.4550 1.6450 78.00 1.1050 0.9480 0.8100 0.8800 1625 100.00 1350
Key Support 1.4400 1.6300 77.00 1.0850 0.9400 0.8000 0.8600 1600 96.75 1310
Headlines
Quick Digest
Risk Appetite is leveling off, yet Commodity Backed Currencies and Risk Aversion Vehicles are Dominating.
AUD Reserve Status Schaeuble Undermines EUR How Will the USD Act?
DISCLAIMER: This presentation and the information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. Forex Club is merely providing this presentation for your general information. This presentation and its information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon this forum or any information contained within. In addition, any projections or views of the market provided by the author may not prove to be accurate. Forex Club LLC and Andrei Tratseuski will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Forex trading involves substantial risk of loss and is not suitable for all investors. © 2011 Forex Club, LLC. All rights reserved.
www.fxclub.com
Head Office th 120 Wall Street 16 Floor New York, NY 10005 USA
Phone 1.212.458.0392
Office Hours 9am – 5pm. (EST)
Contact Us [email protected]
FXDaily, Forex Club Research
What if US Defaults? Schaeuble’s Comments Cause Weakness Risk appetite rally stalled temporary on Wednesday largely in part due to comments from German Finance Minister Wolfgang Schaeuble. Mr. Schaeuble reinforced that problems in the Euro-zone are far from over. The yields of Spanish and Italian Bonds rose higher in the process, down pressing the Euro in the meantime. Whenever yields of peripheral nations rise, the Euro tends to lose value as more risk is associated with holding a bond. Reflecting slight negative notations in regards to the debt concerns, CDS prices of Italy and Spain also inched higher. Debt Ceiling The debt ceiling remains a primary concern for the time being as a political stalemate in the United States needs to be resolved by August 2nd. A lack of adjusting the debt ceiling threshold would spell catastrophic for the United States economy. As noted in earlier writings, the United States will lose its triple-A credit rating and produce a temporary default. Despite a political gridlock, many market participants believe a last second solution is going to be enacted by the U.S. government. Nonetheless, some still hold that the United States might be sustainable of losing the triple-A credit rating despite an extension of the debt ceiling. An Alternative to USD Currency as a Reserve The Swiss franc, the Australian Dollar, and the New Zealand Dollar are all making all-time highs against the greenback. In the meantime, the Japanese Yen and Canadian Dollar are structuring lower levels in broad USD weakness. Market participants are navigating away from exposure to both the Euro and the United States Dollar, an obvious choice for them are commodity oriented currencies and historical safe havens. The Australian Dollar which possesses the highest interest rates in a G10 universe is an obvious choice for risk appetite play; further advances are fueled by Australian alternative currency reserve status. The New Zealand Dollar is appreciating at a robust pace as market participants begin to price in eventual interest rate hike from the RBNZ. There is a slight chance of the RBNZ to hike rate by 50 basis points later today, the least a hint of a potential rate hike in September will be released. The Canadian Dollar continues to appreciate as hawkish BOC comments and high oil prices are allowing the currency to rally. Durable Goods Sales reinforced a rationale that the United States economy is cooling off going into the second half of the year. A current projection of the Federal Reserve of 2.7 to 2.9 percent is seemingly likely at current juncture of time. With weak housing and labor markets, the U.S. economy will continue to weigh down its currency in the second portion of the year.
Sources: Bloomberg & Forex Club Research
DISCLAIMER: This presentation and the information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. Forex Club is merely providing this presentation for your general information. This presentation and its information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon this forum or any information contained within. In addition, any projections or views of the market provided by the author may not prove to be accurate. Forex Club LLC and Andrei Tratseuski will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Forex trading involves substantial risk of loss and is not suitable for all investors. © 2011 Forex Club, LLC. All rights reserved.
www.fxclub.com
Head Office th 120 Wall Street 16 Floor New York, NY 10005 USA
Phone 1.212.458.0392
Office Hours 9am – 5pm. (EST)
Contact Us [email protected]
DAILY REPORT
Andrei Tratseuski, Currency Analyst
Wednesday, July 27, 2011
Pair
Fundamentals
EUR/USD GBP/USD USD/JPY AUD/USD USD/CAD USD/CHF NZD/USD Gold Oil S&P 500
Technical Analysis
Objective/Comments US Debt Ceiling UK GDP at 0.2% Danger Zone All-Time High Up on hawkish BOC Risk Aversion Vehicle Potential Interest rates Hike Today Near All-Time High Risk Appetite Play Rally Continues
Key Resistance 1.4550 1.6450 78.00 1.1050 0.9480 0.8100 0.8800 1625 100.00 1350
Key Support 1.4400 1.6300 77.00 1.0850 0.9400 0.8000 0.8600 1600 96.75 1310
Headlines
Quick Digest
Risk Appetite is leveling off, yet Commodity Backed Currencies and Risk Aversion Vehicles are Dominating.
AUD Reserve Status Schaeuble Undermines EUR How Will the USD Act?
DISCLAIMER: This presentation and the information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. Forex Club is merely providing this presentation for your general information. This presentation and its information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon this forum or any information contained within. In addition, any projections or views of the market provided by the author may not prove to be accurate. Forex Club LLC and Andrei Tratseuski will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Forex trading involves substantial risk of loss and is not suitable for all investors. © 2011 Forex Club, LLC. All rights reserved.
www.fxclub.com
Head Office th 120 Wall Street 16 Floor New York, NY 10005 USA
Phone 1.212.458.0392
Office Hours 9am – 5pm. (EST)
Contact Us [email protected]
FXDaily, Forex Club Research
What if US Defaults? Schaeuble’s Comments Cause Weakness Risk appetite rally stalled temporary on Wednesday largely in part due to comments from German Finance Minister Wolfgang Schaeuble. Mr. Schaeuble reinforced that problems in the Euro-zone are far from over. The yields of Spanish and Italian Bonds rose higher in the process, down pressing the Euro in the meantime. Whenever yields of peripheral nations rise, the Euro tends to lose value as more risk is associated with holding a bond. Reflecting slight negative notations in regards to the debt concerns, CDS prices of Italy and Spain also inched higher. Debt Ceiling The debt ceiling remains a primary concern for the time being as a political stalemate in the United States needs to be resolved by August 2nd. A lack of adjusting the debt ceiling threshold would spell catastrophic for the United States economy. As noted in earlier writings, the United States will lose its triple-A credit rating and produce a temporary default. Despite a political gridlock, many market participants believe a last second solution is going to be enacted by the U.S. government. Nonetheless, some still hold that the United States might be sustainable of losing the triple-A credit rating despite an extension of the debt ceiling. An Alternative to USD Currency as a Reserve The Swiss franc, the Australian Dollar, and the New Zealand Dollar are all making all-time highs against the greenback. In the meantime, the Japanese Yen and Canadian Dollar are structuring lower levels in broad USD weakness. Market participants are navigating away from exposure to both the Euro and the United States Dollar, an obvious choice for them are commodity oriented currencies and historical safe havens. The Australian Dollar which possesses the highest interest rates in a G10 universe is an obvious choice for risk appetite play; further advances are fueled by Australian alternative currency reserve status. The New Zealand Dollar is appreciating at a robust pace as market participants begin to price in eventual interest rate hike from the RBNZ. There is a slight chance of the RBNZ to hike rate by 50 basis points later today, the least a hint of a potential rate hike in September will be released. The Canadian Dollar continues to appreciate as hawkish BOC comments and high oil prices are allowing the currency to rally. Durable Goods Sales reinforced a rationale that the United States economy is cooling off going into the second half of the year. A current projection of the Federal Reserve of 2.7 to 2.9 percent is seemingly likely at current juncture of time. With weak housing and labor markets, the U.S. economy will continue to weigh down its currency in the second portion of the year.
Sources: Bloomberg & Forex Club Research
DISCLAIMER: This presentation and the information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. Forex Club is merely providing this presentation for your general information. This presentation and its information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon this forum or any information contained within. In addition, any projections or views of the market provided by the author may not prove to be accurate. Forex Club LLC and Andrei Tratseuski will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Forex trading involves substantial risk of loss and is not suitable for all investors. © 2011 Forex Club, LLC. All rights reserved.
www.fxclub.com
Head Office th 120 Wall Street 16 Floor New York, NY 10005 USA
Phone 1.212.458.0392
Office Hours 9am – 5pm. (EST)
Contact Us [email protected]
