Daily analysis 30.11.2012

, author:

Marcin Lipka

Better then expected data from Japan boosted EUR/USD, and allow to test the 1.3000 mark. Today investors should pay attention to the German parliament voting regarding the Greek bailout, and Polish GDP data at 10.00 CET.

Macro data:

  • 10.00 CET: GDP from Poland
  • Voting in German parliament concerning the Greek bailout
  • 15.45 CET: Chicago PMI from the States

Data from Japan was a pretext for the EUR/USD rise. Voting in Germany.

From the early morning the market is testing 1.3000 level. The reason for the risk on sentiment was better then expected data from Japanese economy. The industrial production reading exceeded expectations (survey: (-1.8% m/m), actual: (+1.8%)) and supported the common currency. It is, however worth to mention the market is clearly “looking for” reasons to climb further. I did underline it in previous analysis. There is high probability that we can end the week above the 1.3000 mark what undoubtedly will be strong bullish signal, and EUR/USD would be able then to test September/October highs in the following week. I am not expecting any problems regarding the German voting. I presume that market's view is similar but it can be used to push euro dollar further upside by several pips.

One of a few opportunities for PLN to break away from global sentiment.

The Polish GDP reading at 10.00 CET can have substantial, but rather short term effect (up to 1 day) on the zloty. The market survey shows that economy expanded by 1.8% y/y. Better then estimate data (low probability) should support the PLN for the following reasons. Firstly it will show the strength of the economy (what usually is positive for emerging currencies), and secondly it decreases the odds for deeper then 25 bps rate cut. The other scenario is weak but not catastrophic reading (between 1.6% and 1.8%). In my opinion this is the most probable reading. It can cause the short term depreciation up to 0.02 PLN to EUR. The zloty's strongest reaction will spur very weak data. If GUS shows that Polish economy expanded by less then 1.5% then EUR/PLN pair can rise up to 4.1200. The sliding value of zloty will not stop in one day, because such low reading will fuel the expectations for for the deeper rate cut (50 bps) at the December 5th MPC meeting.

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

EUR/USD 1.2950-1.30500 1.3050-1.3150 1.2850-1.2950
EUR/PLN 4.1100-4.0900 4.1000-4.0800 4.1200-4.1000
USD/PLN 3.1800-3.1500 3.1500-3.1200 3.2100-3.1800
CHF/PLN 3.4000-3.3800 3.3900-3.3700 3.4200-3.3900

Technical analysis EUR/USD: the situation still favors bulls. The target for the following week is around highs in September and October (1.3150). Until EUR/USD stays above 1.2900 (23.6% Fibonacci retracement level and 50 DMA) the up trend tendency dominates.


Technical analysis EUR/PLN: yesterday's slide under 4.09 confirms the bears sentiment. The next target is 4.08 and then 4.06. Only the breakout above 4.1200-4.1250 will give signal for the trend change.


Technical analysis USD/PLN: Today's rate is only 0.015 PLN away from the first target (3.1300). The next target is 3.1000. Only the breakout above 3.1900 favors the bulls.


Technical analysis CHF/PLN: the PLN strength won yesterday on the CHF/PLN. The scenario is bearish now with the first target of 3.36 and then even 3.3300. The bullish signal is closing above 3.4150.


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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 Sp. z o.o is prohibited.

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