GBP/USD and EUR/USD

here the USD lite fx indexs...D1

USDX D1.... break through close above BRN 80.00....

Price 1.2932 and Price 1.2906 as Important POINT VALUE

Europe Raises Bar, Japan Dithers

Friday, October 26, 2012 at 6:25 AM
Marc Chandler

http://3.bp.blogspot.com/-1bZObV8WkI.../s200/jump.jpg

The US dollar is narrowly mixed against most of the major foreign currencies as the week winds down. The big mover is the Japanese yen which is showing some resilience. Initially in Asia, the greenback had extended its recent gains to almost JPY80.40 before reversing to return toward yesterday's lows near JPY79.80. A break of this area, and especially a close below there, which would trace out a potential key reversal would signal a consolidative or corrective phase has begun. Such a phase could see the dollar return to the JPY79 area initially.

The ostensible triggers for the yen's recovery are two-fold. First, Japanese inflation, really deflation, was a little less than expected, with the September core CPI coming in at -0.1% rather than -0.2%. Second, as already hinted, the government is proposing JPY422 bln in new fiscal stimulus. However, on both scores, there is less than meets the eye.

While core national CPI did not fall as much as expected, it is still the fifth consecutive month of negative core CPI readings and the October reading for Tokyo was unchanged at -0.4%. The underlying details suggest that deflationary forces are still evident.

There is less to the fiscal stimulus than it may initially appear. Recall that given the strength of the opposition and the weakness of the Noda government, the stimulus would not come in the form of a supplemental budget, since that would require a new parliamentary vote, but from the reserves of the current budget. It is not what the Japanese would call "fresh water" but rather more like recycled water. In addition, it is too small to make a difference. National Policy Minister Maehara estimated it is worth about 0.1% to GDP.

Neither the CPI, nor the fiscal developments (hard to really call it stimulus) do not remove, but rather add to the pressure on the Bank of Japan to extend its asset purchase plan next week. Although there is some talk of JPY20 trillion extension, most indications, including the BOJ's modus operandi, seems to favor a JPY10 trillion increase. There is also some speculation that the BOJ will shift its language from referring to the 1% inflation target to calling it a goal, to further underscore its intent.

There are three important developments in Europe to note. First, the bar to tap the ESM may be higher than previously anticipated. A spokesman for Merkel's CDU party said that the Irish request to have the ESM purchase legacy debt would be considered a new aid package and be subject to new conditionality.
Germany and the creditor nations have insisted that bad debts held by banks before the establishment of the new supervisory mechanism, that is the legacy debt, will not be covered by the ESM (debt mutualization). Ireland was recognized as an exception. But these new terms will make it more difficult and will do little to tempt Spain's Rajoy from (finally) asking for formal assistance. In fact, this has been the worst week for Spanish bonds since August, with the 10-year benchmark yield up almost 30 bp.

The second development are reports suggesting that Greece is close to securing a package that would include being granted two additional years to bring its deficit to 3% of GDP. However, time is money and where the extra 30 bln euros or so will come from is not clear. Indeed, reports in the German press suggest a Bundestag majority may prove elusive. Merkel has had to rely on the opposition SPD to pass key legislation to support the periphery, but as the campaign for next year's election gets under way, the SPD may be less willing and Merkel's CDU even less supportive of more assistance to Greece.

Thirdly, S&P downgraded France's largest bank and revised its outlook for 10 other French banks to negative from stable. This has not been sufficient to undermine French sovereign bonds, where the 10-year benchmark yield is off 3 bp, while the peripheral yields are higher. However, we suspect this is the proverbial canary in the coal mine.

We have argued that France shares more in common with southern Europe than northern Europe. In this crisis, the key axis is between creditors and debtors. The end of the credit cycle cannot be complete until all debtors are dealt with. The adjustment comes first to small and vulnerable countries, Greece, Ireland and Portugal. Spain is being addressed now. Italy, to borrow a phrase from American baseball, is on deck. France is in the hole. Soon, perhaps after the elections next spring and after Spain is on a more formal program (next year it faces record issuance and arguably no LTRO to help), Italy will have its turn at bat. Then France moves to the on-deck circle.

Although a prisoners dilemma exercise would suggest Spain and Italy should ask for assistance at the same time, political considerations appear to be preventing such cooperation. Therefore, we have suggested that when Spain does formally seek assistance, Italy will come under pressure. Italy is the Maginot Line, to change metaphors, protecting France. As Italy comes under pressure, France is likely to become decoupled more from Germany.

Multi Levels for EURO in H1 time frime

Friday October 26, 2012

GREEN Levels Colour (with Prices) is SMALL Levels move.
PUPLE Levels Colour (with Prices) is MEDIUM Levels move.
BLUE Levels Colour (with Prices) is BIG Levels move.

Broken Lines Colour (without Prices) is IMPORTANT Levels.

Multi Levels for POUNDS in H1 time frime

Friday October 26, 2012

GREEN Levels Colour (with Prices) is SMALL Levels move.
PUPLE Levels Colour (with Prices) is MEDIUM Levels move.
BLUE Levels Colour (with Prices) is BIG Levels move.

Broken Lines Colour (without Prices) is IMPORTANT Levels.

Multi Pairs FX in Bar Trend + Power Graph

Friday October 26, 2012

Dynamic Trend : Looking for Any Pairs Trends, from H4 to M1 time frime
Daily Dynamic : Looking for Any Pairs Trends, from D1 to D4 time frime

Australia: Manipulating by not Intervening?

Friday, October 26, 2012 at 8:53 AM
Marc Chandler

http://4.bp.blogspot.com/-kCg6h_SlJu...ag-1423509.jpg

The Wall Street Journal brings to our attention the fact that the reserves at the Reserve Bank of Australia have risen sharply over the past two months. Its reserves have risen by A$863 mln over the past two months after rising by about A$147 mln in all of Q2.

Typically when reserves increase, it is due to action by the central bank. However, as the Wall Street Journal points out, this is not the case in Australia. Its reserves rose due to the inaction of the RBA. It simply did not convert the foreign currency inflows as it typically does.

Yet report claims that this inaction itself is tantamount to intervention. We demur. The claim collapses an important distinction between passive and active reserve accumulation. It risks obscuring the distinction between managing and manipulating. Its equivalency claim conflates reserve management with intervention. The absence of intervention becomes another type of intervention.

Nevertheless, the signal is clear and the RBA has been explicit. Its currency is too strong. Not only have some board members expressed an interest in a weaker currency, but the RBA cited the Australian dollar's strength as an important consideration behind the rate cut earlier this month. On a trade-weighted basis, the Australian dollar has risen another 2% in recent weeks. The value of the WSJ piece is not in its claim about intervention, but showing another way in which the RBA is demonstrating its displeasure with the Australian dollar's strength.

Economic data since the RBA meeting has been mixed. On one hand, it has reported a much larger trade deficit and softer retail sales. On the other hand, auto sales, house prices, employment and CPI were firmer than expected.

The global headwinds have not changed very much. The euro area likely contracted in Q3 and that contraction appears to have carried over into Q4. China's economy may have bottomed in Q3, but a wide berth is needed given the suspect nature of Chinese economic data. The US economy appear fragile as the fiscal cliff is approached and within yesterday's durable goods order report, a sharp slowdown in capital expenditures has caught the attention of many observers. Nor is next week's employment data expected to be particularly robust.

The case for another RBA rate cut remains intact. The changed behavior of the RBA in dealing with its fx inflows reflects its frustration with the persistent strength of the Australian dollar. Even with 2% year-over-year inflation in Q3, Australia offers relatively high real interest rates and will continue to do so even if the RBA cuts the cash target rate in early November from 3.25%.

In addition to its relatively high interest rates, easily the highest in the G10, central banks adding Australian dollars to their reserves is another supportive factor. The RBA's decision to allow foreign currency balances to build is a modest offset. Modest because the RBA's reserve increase seems minor (less than $1 bln over two months) compared with the number of central banks that have indicated they were diversifying some of their reserves into Australian dollars.

Against the dollar, the Aussie reached a 6-7 month high in mid-September near $1.0625. By early October it had been sold down to around $1.0150. It has recovered, but has faltered near the 50% retracement, which comes in just below $1.04. This area marks resistance now having failed twice. On the downside, trend line support drawn off this month's lows comes in near $1.0265.

Multi Levels for AUSSIE in H1 time frime

Friday October 26, 2012

GREEN Levels Colour (with Prices) is SMALL Levels move.
PUPLE Levels Colour (with Prices) is MEDIUM Levels move.
BLUE Levels Colour (with Prices) is BIG Levels move.

Broken Lines Colour (without Prices) is IMPORTANT Levels

Multi Pairs FX in Bar Trend + Power Graph

Friday October 26, 2012

Dynamic Trend : Looking for Any Pairs Trends, from H4 to M1 time frime
Daily Dynamic : Looking for Any Pairs Trends, from D1 to D4 time frime


NOTICE :
This time "Special Edition" for Aussie - AUD/USD Pair

Whats your view on teh Aussie Dollar Tsar friend?? btw its me bguguen your long lost friend...

http://www.forexfactory.com/showthre...11#post6134411

i'm tired of their bs. let's leave it at that.

There's a bullish divergence too, IMHO these could be the next movements..

I knew... you're Bro

Tomorrow I will be giving my View in HERE, Bro
I'm already too tired, especially in 2 Days sleep deprivation.

It would be nice if give your View first
I want to know the progress of your Analysis...

Dear pkimnyc,

I'm so glad to see you again in Here, Sis...

You're Welcome to make Post in GBP/USD and EUR/USD thread's
Feel free like your Home, Buddy.

I hope you like provide the Analysis and your Views on this thread. Because you're one Best of Analyzer & Trader who I know.
And... make Newbie & Junior Members in learning and Trade, can continued their Study. We're need you !



Best Regards,
Tsar

Personally i dont know, i would like audusd to go up to test the monthly downwards trendline, so i can short it back to daily ema200 but what i really want is to see parity... :-/

i think up first then down

hey man whats this indi with the dynamics? is a way i can get it.? thanks

Any CHART with Time Frime ?



MEMO :
No Problem for Post Aussie - AUD/USD Chart. B'cause these CASE 'Special Edition' & it will make the effect GBP/USD & EUR/USD Pairs.

Here you will find one. At the time I posted I wanted to respect strictly your own rules. If it's not prohibited by the rules governing this thread to build bridges and try connect people, here you go:
http://www.forexfactory.com/showthre...07#post6137707

No, no, no. I'm not sponsored by Nokia to connect people