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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]
