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Daily analysis 30.01.2013

, author:

Marcin Lipka

EUR/USD is reaching 1.3500 and S&P500 the new 5 year highs. Today the key event for currency market is the FOMC statement. It is also worth to pay attention to GDP data from U.S and ADP employment report. The Polish zloty is depended on global markets and will tomorrow focus on PMI data.

Macro data (CET- Central European Time):

  • 14.15 CET: ADP form the States (survey 165k)
  • 14.30 CET: GDP from the U,S (survey: +1.1%)
  • 20.15 CET: FOMC statement

Robust sentiment is spreading around risky assets.

Tuesday was a good confirmation of wide spread positive sentiment. S&P 500 reached another 5-year highs and EUR/USD closed just shy below 1.3500 mark. The similar situation is on German and British equities. It is also wroth to mention that yields on 10-year U.S treasuries reached 2% first time since April 2012. It shows that much more investors are moving the assets from safe havens to more risky instruments (stocks and high yields both governmental (Spanish, Italian, Portuguese, and Irish) and corporate bonds). It is quite possible that after such a rally we can see some kind of correction move, but it will be be probably just a short stop in the long term trend.

FOMC in focus.

The news of the day will be statement after two day FED meeting. The market is getting more positive that FOMC will reassure investor regarding further monetary stimulus (both concerning ultra low rates and QE). The recent jump on EUR/USD causes that some part of the info is already priced in but it does not mean that at 20.15 are will not see the strong rise on the common currency. Analysts surveyed by Bloomberg predict that the overall QE3 value will reach 1.14 billion USD and will end at the beginning of 2014. The confirmation of this prediction in today's statement or emphasizing the threshold (6.5% unemployment) should boost the EUR/USD to the new highs.

The zloty is still weak despite neutral GDP reading.

Polish Statistics Office (GUS) published yesterday the GDP reading. It matched the analysts' estimates (2.0% y/y) but does not give much relief to PLN. Just after the data hit the wires the zloty strengthen by 0.2% but the rally faded quickly and then EUR/PLN moved toward 4.21 mark. The bullish opening in the States and EUR/USD rise helped the zloty to finish the day around 4.1850. Investors recently are really focused to macro data and try to evaluate the future interest rate cut. Currently the market anticipates that in the 1H of 2013 we will have two 25bps easing moves (in February and in March). Any deviation from the current prognosis will weaken PLN (deeper or more rate falls) or strengthen the Polish currency (in the scenario of some breaks).

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

EUR/USD 1.3450-1.3550 1.3550-1.3650 1.3350-1.3450
EUR/PLN 4.1400-4.1800 4.1300-4.1700 4.1500-4.1800
USD/PLN 3.0700-3.1100 3.0500-3.0900 3.0900-3.1300
CHF/PLN 3.3400-3.3700 3.3300-3.3600 3.3400-3.3700

Technical analysis EUR/USD: today EUR/USD reached the mid term target of 1.3500 which was set the technical analysis (mentioned December 5th 2012 /eng/news/daily-analysis/daily-analysis-05.12.2012 . Looking at 5 year chart the next targets can be set around 1.3900-1.4000 after breaking 200 week MA (1.3528). The strong support level is around 1.3300. The move under 1.3300 can extend the correction even toward 1.3000.

Wykres

Technical analysis EUR/PLN: 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: tries to break down 3.1000 level. If it happens then the chances to reach 3.05 is quite high. On the other hand the rise above 3.1400 can move the USD/PLN toward 3.25-3.27.

Wykres

Technical analysis CHF/PLN: CHF/PLN is balancing on 3.3600 level, but only when we fall below 3.3300 the shorts are preferred. On the other hand the rise above 3.4100 will generate the buy signal.

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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