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Daily analysis 01.02.2013

, author:

Marcin Lipka

Another record high levels on EUR/USD (above 1.3600) and on EUR/JPY (above 125). The final Chinese PMI reading and some trading issues supported the common currency. Today the markets will focus on final PMI data from Europe and macro reports from U.S (NFP, ISM). The zloty is still weak around 4.2000. Also Polish PMI will be in focus.

Macro data (CET- Central European Time):

  • 9.00 CET: Polish manufacturing PMI (survey 48.8)
  • 9.48 CET: French manufacturing PMI (final reading; survey: 42.9)
  • 9.53 CET: German manufacturing PMI (final reading; survey 48.8)
  • 9.58 CET: EuroZone manufacturing PMI (final reading; survey 47.5)
  • 14.30 CET: Nonfarm Payrolls from U.S. (survey 165K)
  • 14.30 CET: Unemployment rate from U.S (survey 7.8%)
  • 16.00 CET: U.S. Maufacturing ISM (survey 50.6%)

EUR/USD is above 1.3600, and EUR/JPY over 1.2500.

Thursday was pretty calm on the currency market and many investors expected at least a slight correction after a solid moves in last days. However the bulls seems to be stronger that many have thought and during the Asian session we breached another round level of 1.3600 and trading now around 1.3620. Some nice summary of recent situation gave, cited by Reuters, Jesper Bargmann Asia head of G11 spot FX for RBS: “Money is going back to Europe... So we're seeing the longer-term investors leaving safe haven bets, particularly the yen, but we've seen it in sterling as well, we've seen it in Swiss franc” He also said that:” The euro also pushed higher as trades took aim at and breached option barriers at 125.00 yen and $1.3600 euro. The move on yen could be also accelerated by the process of choosing a new BOJ governor. The Japanese Economy Minister Akira Amari told reporters that Abe may be narrowing the list of candidates who can replace the current Central Bank chief. Additionally Bloomberg reports that a potential candidate for the position, Kikuo Iwata, said yesterday that “deflation and the stronger yen can be overcome with monetary policy alone”.

Data in focus: PMI, NFP, ISM.

Today we get a big set of data. The PMIs from Europe are just final reading so the major change is not expected. However any upgrade on French or German PMI can be interpreted by investors as a positive signal. Before the U.S session starts the NFP and employment rate will hit the wires. Regarding the FED policy better-then-expected reading is suppose to weaken EUR/USD (higher chances of withdrawing the QE earlier). It is quite possible that we can receive a bit upbeat report due to quite strong weekly jobless claims (except the last one). The ISM index should be rather neutral for the currencies.

Polish PMI in focus.

The zloty is weak but rather stable before PMI reading. The market survey shows a slight improvement in the managers index (from 48.5 to 48.8), but the recent dire data from production and retails sales sets rather pessimistic mood. If we get the PMI around 49 it can support a bit EUR/PLN (around 0.01-0.02 PLN to euro). On the other hand the value below 48.5 can put pressure on PLN and push the pair toward 4.22-4.23. At the beginning of the next week the market will be trying to prepare to MPC meeting and rate decision. The 25bps cut is suppose to be priced in but the conference will be again the key and any indications of more dovish approach can weaken PLN further.

Expected levels of PLN according to the EUR/USD value:

EUR/USD 1.3550-1.3650 1.3650-1.3750 1.3450-1.3550
EUR/PLN 4.1700-4.2100 4.1600-4.2000 4.1800-4.2200
USD/PLN 3.0500-3.0900 3.0300-3.0700 3.0700-3.1100
CHF/PLN 3.3600-3.4000 3.3600-3.4000 3.3700-3.4100

Technical analysis EUR/USD: the 5 year chart looks very bullish. Breaking from rising triangle and 200 MA shows that the 1.4000 level is in the range. Now the strong support is around 1.3500 and then 1.3300 which should not be breach.

Wykres

Technical analysis EUR/PLN: the situation on EUR/PLN has not changed. The zloty is still weak and there is more chance for the new highs then falling under 4.1500. The target is still 4.2300 and in extension 4.2500. Only the fall below 4.1500 should favor the sell side.

Wykres

Technical analysis USD/PLN: the pair was not able move above 3.1400 and in consequence we move under 3.1000 which was a good moment to open short positions (indicated in previous analysis) with target of 3.05. However the comeback above 3.1400 will generate the buy singla with the target even at 3.25-3.27.

Wykres

Technical analysis CHF/PLN: we didn't not move above 3.41, so the base scenario is the range trade between 3.3600 and 3.41. The breakout above 3.41 can result even in a move toward 3.4800 (50% Fibonacci retracement level). The slide below 3.3300 should activate the bears.

Wykres


Wykres

This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without the written permission from Cinkciarz.pl Sp. z o.o is prohibited.

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