M. Hewson: euro ai minimi contro il franco
Moneta unica ai minimi contro il Franco Svizzero a causa delle pessime notizie del weekend relative ai tagli che le agenzie di rating hanno operato sul debito greco e all’outlook sull’Italia: è probabile che l’incertezza sull’eventualità della ristrutturazione di Atene non duri più di qualche giorno. Il focus sul differenziale dei tassi con il Dollaro questa volta non ha aiutato l’Euro, il cui collo di bottiglia è rappresentato da quota $1,4360. Appare evidente lo scollamento tra le intenzioni dei governanti e quello del corpo elettorale, con una previsione di incremento delle proteste in Europa per i tagli alla spesa annunciati.
FOREX MORNING COMMENT
London – 23th May 2011
Concerns about the fiscal situation in Europe continue to weigh on the single currency as markets worry less about economic data and more about fallout from deteriorating sentiment with respect to sovereign debt as the euro hit record lows against the Swiss franc.
Comments by the German Bundesbank on Friday that Q1 growth in Germany was probably overstated had already started to weigh on the single currency but the selloff accelerated after Fitch downgraded Greece to ‘B+’; with a negative outlook, saying that an extension of Greek bond maturities would be considered a default. This was followed later on by a surprise move by S&P to downgrade Italy to “negative” watch, citing weak growth prospects as well as concern that political deadlock would slow down the pace of fiscal reform.
Given that the markets have been choosing to focus on yields, at the expense of sovereign debt concerns, the single currency might have been able to shrug these factors off. The reason it wasn’t able to is because that it is increasingly becoming apparent that despite political determination to try and ride out these fiscal storms by way of austerity, voters do not appear to be showing the same enthusiasm. The
weekend elections in Spain could well see the ruling socialists lose significant ground as voters’ tire of endless austerity measures in order to prop up senior bondholders and satisfy the EU and ECB appetite for fiscal consolidation. French, German and euro zone purchasing manager data for May due out later is expected to show that the major economies continue to perform fairly well, but for now it is not these economies that investors are concerned with. Greece PM Papandreou said at the weekend that Greece must avoid a debt restructuring and with the ECB vehemently opposed to such a move, room for manoeuvre amongst EU policy makers is shrinking by the day, while discord appears to be increasing.
Greece is expected to present further details later this week on its latest fiscal plan so that the IMF and EU will continue to bankroll the country.
EURUSD – the final barrier to a move higher towards 1.4600 managed to rebuff the single currency’s upward momentum on Friday. The trend line neckline resistance of an inverse head and shoulders that comes in at 1.4360 continues to limit upside momentum, as does, to a lesser extent the 55 day MA at 1.4305. The break below trend line support at 1.4250, from the recent lows at 1.4045 comes has shifted the focus back towards a test and break of the 1.4000 area and 200 week MA. A break below this key level would then shift the focus towards 1.3905 initially which is 50% retracement of the 1.2870/1.4940 up move and then on to 1.3660 which is the 61.8% retracement.
GBPUSD – the 55 day MA continues to cap any sterling rallies towards the 1.6300 area, and while the pound continues to struggle near this key barrier a move lower seems the most likely outcome. A move above 1.6300 targets 1.6380. The next support level remains around the 1.6060 level, which is trend line support from the lows last May at 1.4230. The key support from the February and March lows remains between 1.5960 and the 1.6000 area.
EURGBP – the 0.8850/70 turned out to be a tougher nut to crack than first thought and the subsequent break below 0.8780 keeps any thoughts of a possible break higher back to one side as the recent ranges remain intact. The next key support low remains around the 0.8670/80 level and the last two week’s lows. A break of this key support area would then target the 0.8620 area which is 61.8% retracement of the recent up move from the February lows at 0.8355 to the highs earlier this month at 0.8940.
USDJPY – last weeks failure to break above the 55 day MA at 82.01 makes the yen susceptible to pull backs towards the 81.20/30 break area from last week. The longer term objective remains for a higher dollar but the inability of US bond yields to rally could well make this a rather tedious task. A close above the 55 day MA at 82.05 is needed to target a move targeting the 200 day MA at 82.80. Longer term support remains around the 80.55 area which is trend line support from the all-time lows at 76.25.