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Daily analysis 11.02.2013

, author:

Marcin Lipka

Rumors regarding the common statement on currencies from G7, and softer stance concerning yen from Japanese Prime Minister Taro Aso pushed EUR/USD toward support around 1.3320 at the opening of the Asian session. Markets are tying to position itself before the G20 meeting starting on Friday. The PLN is stronger after another record breaking U.S session and quite hawkish MPC statement.

Macro data (CET- Central European Time):

  • No major macro data which will impact the global currency market

G 7 and G 20 in focus.

The Asian session on EUR/USD started with a strong slide toward 1.3320. The direct reason of such rapid euro depreciation was The Wall Street Journal report regarding the possible G 7 statement on currency rates. According the the Journal there is no clear agreement how the document should look like. Morris Goldstein, a senior fellow at the Washington-based Peterson Institute for International Economics and former IMF economist said that: “I expect them to paper over these differences and say they agree on the need to avoid competitive devaluations and the need to consult with each other, but without creating anything that has force” The sell off at the beginning of the week was also speed up by low liquidity (markets in China and Japan were closed) and some statements from Japanese Prime Minister Taro Aso who wanted to a bit “excuse” himself before the G20 meeting claiming that he was not expecting such a strong yen depreciation. It is possible that before the summit we can see more political statements regarding the currencies (similar what we have already seen from Japanese and French official). Regarding the coming G20 meeting or expected G 7 statement we can expect some pressure on EUR (even a successful push under 1.3300) and some yen strength (toward 90 per USD).

PLN stronger again.

Polish zloty, despite another weak data (unemployment at 14.2% in January) strengthened on Friday and ended the day around 4.1500 per euro. The main reason of the zloty's afternoon rise was another record breaking levels on U.S equities (similar situation we could observe on Hungarian forint and South African rand). Additionally investors are still trying to evaluate the quite hawkish statement form Wednesday's MPC meeting (maximum one rate cut in the 1H of 2013). The Polish currency can also benefit in future from widening (or not decreasing) interest rate differences between EuroZone (Mario Draghi can eventually lower the rates) and Poland. The slide under 4.1500 per euro can initiate the move toward 4.08-4.12 range (it is also supported by technical analysis.

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

EUR/USD 1.3350-1.3450 1.3450-1.3550 1.3250-1.3350
EUR/PLN 4.1300-4.1700 4.1300-4.1700 4.1300-4.1700
USD/PLN 3.0800-3.1200 3.0500-3.0900 3.1000-3.1400
CHF/PLN 3.3700-3.4100 3.3700-3.4100 3.3700-3.4100

Technical analysis EUR/USD: during the Asian session we bounced back from 23.6% Fibonacci retarcement level (around 1.3320). If the 1.3300 does not stop the slide we can expect the test of 1.3260-40 (50 DMA and the December consolidation levels) and in extension toward 1.3070 (38.2% Fibonacci retarcement level). The come back to the bullish trend is possible after reaching 1.3500.

Wykres

Technical analysis EUR/PLN: friday's close around 4.1500 increases the odds for successful test of 4.1500 and move toward 4.1200 (50 DMA and 23.6 Fibonacci retarcement level) and then move toward the range of 4.08-4.1200. The comeback to bullish trend is possible after breaching 4.1800.

Wykres

Technical analysis USD/PLN: no changes are still visible on USD/PLN. The bulls will have push USD/PLN above resistance level (50 DMA - 3.1150) and then over resistance at 3.1400. The breakout of 3.14000 should change the trend and spur move toward 3.25-3.27. We should remember however, that the trend is still bearish and until 3.1400 is broken any level should be used for opening short positions.

Wykres

Technical analysis CHF/PLN: again nothing changes on CHF/PLN. Bears should be waiting until the CHF/PLN moves under 3.3300. Such a slide will initiate the sell signal with the target around recent lows (3.27). The longs are set to open buy positions above 3.41 and wait until 3.4800 is reached (50% Fibonacci retracement level).

Wykres


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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