Earthquakes in Japan seriously impair industrial activity

Industrial activity in Japan accelerated its decline in April, as the PMI index Markit/Nikkei fell to its lowest level since January 2013 onwards, or to 48 points. Markets predicted a growth of 49.1 to 49.6 points.

According to analysts, the disappointing performance of the sector has been affected by the earthquakes in Kumamoto, which led to the restraint of production capacity.

Component, tracking production, retreat from 49.8 to 47.9 points, marking the strongest contraction of the indicator since April 2014.  New orders also weakened significantly - from 48 to 44.6 points, while new export orders reached their minimum since December 2012, or 44 points.

"After the devastating earthquake, the prospects for the Japanese manufacturing sector seem particularly uncertain." - said economist at Markit Amy Braunbil.

RBS expect GBP/USD at 1.3000

Forex Strategists at RBS comment on the latest report on the labor market in the UK, pointing to weak growth in wages. This indicator is closely monitored by the Bank of England, and minding, that retail sales also came under forecasts, the pound may be difficult to return to the levels of 2015.
Indeed, sterling showed remarkable resilience in the face of disappointing statistics, and, that according to analysts, reflects the excess of speculative short positions in British currency. At RBS warned that a new decline in the US dollar is not excluded and worries associated with such movements may lead to a sharp rise in GBP/USD and drop in EUR/GBP. However, such a correction would not last long and is not intended to be deep.
In the coming week investors' attention will remain directed to the polls on June referendum on membership of the United Kingdom in the European Union.
Strategists emphasize that although the temporary strengthening of the pound against the dollar, the general trend is hardly undergone change. Political uncertainty remains, and at RBS recommend selling GBP/USD in its attempts to grow with the aim of 1.3000. The set level will probably be reached in the next few weeks, predict analysts.

BNP Paribas do not believe in conspiracy agreements against the dollar

Forex strategists of BNP Paribas do not believe in the conspiracy theory that on the meeting of the leaders of the Big ten in February it was decided to countries to limit the strengthening of the dollar, or at least not seek to devalue their own currencies.

Analysts remind that the European Central Bank did not hesitate to cut rates in March and later its governor Mario Draghi emphasized that the institution is ready to adopt further stimulus if necessary. In Japan, representatives of Regulators also convince investors that it is possible to reduce rates if the dynamics of exchange rates goes out of control. Interventions in the market are also not excluded.

Ultimately, however, whatever was discussed at the meeting in February, the fact is that the US dollar weakened significantly, which contributed to the restoration of a number of assets, not least - commodity. And fears of imminent devaluation in China are also dispelled, which supported stock markets and credit instruments.

According to analysts at BNP Paribas, by examining the ratio between risk and expected return, the most appropriate seems the bet on the eventual rise of the dollar against the commodity currencies - such as the pair USD/CAD. The dynamics of the dollar against the currencies of financing, the euro and the yen is not so unambiguous, but probably the strengthening of the dollar will not last long and it will reverse it's direction amid an escape from risk.

By BNP Paribas expect levels of EUR/USD at 1.16 by the end of June, while USD/JPY forecast is for 108.00.

Bank of America: Will the April meeting of the Federal Reserve affect the dollar?

Current market quotations provide zero chance for raising rates at the next few meetings of the Federal Reserve, note forex strategists of Bank of America. Investors have calculated less then one increase in rates by 25 basis points by the end of the year. Minding the short-term outlook, disappointing macroeconomic data and cautious comments of regulators, similar position seems justified.

However, by Bank of America highlight that the global economic and financial picture stabilize, while not improving. Analysts believe that the US central bank will raise interest rates twice by 25 basis points in 2016. The next step in this direction will be taken in the summer, most likely - in June, but if a referendum on Britain's membership of the European Union increase significantly volatility, more likely the raising will happen July.

Could the April meeting of the Federal Reserve to alter the trajectory of the dollar? Hardly, according to the Bank of America. The central bank will remain cautious because the decline in the currency after the March meeting is a positive development. At present, the markets believe that the chance of an increase in rates in June is below 20%. Modest adjustments to the statement of Regulators would have only limited support of the dollar provide strategists.

Societe Generale: Bullish trend in EUR/GBP the past few months ended

EUR/GBP in the last few days remained under sustained pressure. The currency strategists of Societe Generale advised to pay attention to the fact that the technical picture becomes less positive and especially, that passing the lower limit of the bullish channel in December last year is a negative signal fro the pair.

The bank notes that the currency pair is very close to the support in 0.7880/30 pounds (lows for the last month and 50% of the growth on March 3-rd), and a more convincing break below these levels would have confirmed the beginning of a deeper corrective phase.

In this case, EUR/GBP could fall to 0.7650 pounds and Societe Generale believe that for those who dare to open short positions, it is advisable to place stop loss at 0.8000 pounds.

Lloyds Bank: Technical comment for EUR/USD

EUR/USD continues to rise slowly moving away from the area of ​​support 1.1240, the movement is supported by the weakness of the US currency.
Lloyds Bank has a bearish outlook and they believe that this growth is only a correction of the sharp drop from the key resistance at 1.1465. Currently the pair is in the middle of the resistance in 1.1325 - 1.1375 and a break below 1.1240 will open the way for test of 1.0950 and 1.0800.
In the medium term the pair will probably remain in the corridor 1.0450 - 1.1465.
Break above the upper limit is not the main scenario of the bank, but if it happens, the pair will have every chance to test the August maximum over 1.1700 but also to reach 1.2000 to 1.2300 and to form new trade limits.

Technical analysis of EUR/USD for April 19

EUR/USD was indecisive yesterday. The bias is neutral in nearest term but as long as the pair stay below 1.1335, the bearish scenario remains at this phase. The nearest support is 1.1275. A clear break below it could trigger further downside pressure for testing 1.1200. On the upside, a clear break and daily close above 1.1335 will become a threat to the bearish scenario re-testing 1.1500. The main technical outlook remains neutral.

The US dollar fell for a second consecutive day

The dollar started the week slightly, recording a fall against most major currencies after on the meeting in Qatar's capital Doha the main oil producers failed to agree to freeze yields.
Commodity currencies such as the Australian, New Zealand and Canadian dollar, and also the ruble, managed to raise, supported by the rise in oil prices. Black gold managed to erase most of its losses after oil meeting, managing to return over 39 dollars per barrel.
The yen retreated against the dollar. The Japanese currency fell with 0.8 percent to 109.10.
The Australian dollar continued its strong performance, reaching a 10-month high against the US dollar at around 0.7794.
William Dudley, president of the New York Fed, said earlier that US economic conditions are "for the most part positive." However, the Fed still wary of rising interest rates.
On the other hand, according to some economists, the European Central Bank may have run out of ammo. According to them, the institution will have problems in the future weakening of the euro. The single currency rose by 0.27 percent to 1.1312.
The dollar index, which measures the performance of the dollar against a basket of major currencies, fell with 0.26 percent to 94.50.

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The status quo in Syria remains - Assad wins the elections

The party of Syrian President Bashar al-Assad unsurprisingly won a large majority in parliamentary elections in the country.
The vote took place on Wednesday, but official results became clear today.
200 candidates of the bloc "National Unity", part of which is the Baas Party were elected to the 250-member unicameral parliament, said the Central Election Commission.
Turnout was 57.66 percent.
Protesters controlled by the regime territories, however shouting "Down with Assad" and "Get out, Assad."
5.08 million Syrians went to the polls in a total of 8.83 million potential
voters in the country devastated by five years of civil war.
The population of Syria before the outbreak of the conflict numbered 23 million. 13.5 million of them are affected by war in one way or another, according to UN data.

IMF warns on debt bomb in China

The world goes blind to a new crisis as investors began to lose confidence in the ability of politicians to revive economic growth, writes British newspaper "The Telegraph", citing a report by the International Monetary Fund outlook for the global economy.
Warning of loss of policy inaction, the IMF stated that the financial and economic stagnation could worsen if governments do not prevent the formation of malignant feedback because of the fragile trust between weak growth, low inflation and rising indebtedness.
Jose Vinyals, head of financial stability at IMF warned that continued delays could erase 3.9 percent of global gross domestic product compared with current expectations for the next five years amid persistent turmoil in the markets.
According Vinyals bomb hidden in a $ 1.3 trillion risky corporate debt that is ticking in China, also carries potentially serious challenges to financial stability if banks are pushed to the edge.
The loss of investor confidence bodes bad outlook for global markets. If no action is taken, the shares in the UK, the US, Eurozone and China will lose a fifth of its value in the next two years.

Economic shock of lifting the minimum wage in Turkey

Nearly 300,000 employees in small and medium enterprises in Turkey have lost their jobs in January after the increase of the minimum wage in the country.
A total of 379,000 people have lost their jobs in January, 76,000 of them are women.
The report pointed out that 78% of people lost their jobs in the first month of the year were employed in small and medium enterprises.
In January, the minimum wage in Turkey was increased from 1,000 Turkish Liras to 1,300.
Many businessmen have warned then that the change could lead to cuts.
Most job losses were recorded in most developed parts of the country. In Istanbul, 63,000 people were unemployed. Tens of thousands are cuts in Ankara, Izmir and Antalya.
Increase in employment in January was registered in only one of the 81 counties in Turkey - Van, one of the poorest in the country.
In the last quarter of last year it grew by an impressive 5.7% and seems unaffected by the conflict between the state and the Kurdish minority, attacks and worsening relations with Russia.
In Friday the Iranian President Hassan Rohan contracted with Turkish counterpart Recep Tayyip Erdogan cooperation in the fields of tourism and transport. The goal is trade between the two countries to grow to $30 bln from about 10. Rohan said that Iran is ready to fully meet the needs of Turkey's oil and gas needs.

BNP Paribas: The growth of the yen is a temporary phenomenon

The pair EUR/JPY remains under pressure, but forex strategists at BNP Paribas believe the weakness is temporary, and offers attractive opportunities for opening long positions.
Analysts suggest that the growth of the yen reflects the disappointment of speculators, but do not see grounds for achieving new annual highs.
Fed undermined the confidence of the bulls and a key theme this year was the weakening of the dollar amid the silent expectation of increases in rates in the US. By BNP Paribas for example, do not believe that this year we will witness a tightening of monetary policy.
Meanwhile, the Japan Bank recently does not justify the hopes of the bears on the yen. We must not forget, however, that the situation in Japan is far from ideal and despite the showed restrain, regulators probably will be forced to adopt additional stimulus.
By BNP Paribas believe that sales of ¥ look attractive against both the dollar the euro. Experts retained its forecast for the exchange rate of EUR/JPY of Y131 at the end of the year and retain their long positions in the pair with target Y127.

BTMU: EUR/USD likely to remain in the range of $1.1050-$1.1450

Recent attempts of the EUR/USD to resume its growth amid the softer rhetoric of the Federal Reserve failed, note forex strategists  at BTMU.

As a result, the pair continues trading in range, which seems logical amid analysts estimates that "fair" value of EUR/USD is $ 1.11.

In the coming months the upcoming referendum on Britain's membership in the EU is likely to continue to exert pressure on the united currency. However, the softer stance of US regulators would not allow the dollar to advance against its competitors.

By BTMU not expect anything interesting from the next meeting of the European Central Bank, by providing that Mario Draghi will gently hint that the  incentives, made so far, so far should encourage inflationary pressures.

Experts take a neutral position on EUR/USD and forecast trading in the range of $1.1050- $1.1450.

The yen reached a 17-month high against the dollar on Tuesday

The yen was among the big winners yesterday thanks to good data on the growth in the average pay of Japan and the growing concern of investors about the global economic slowdown. Christine Lagarde said in a statement that the world economic picture has worsened over the past six months and called for stronger measures. The pair USD/JPY fell to 110.33, and GBP/JPY is down to 156.20. US data showed that the ISM index of services in the US reported growth last month to 54.2 points, while the trade deficit increased to 47.06 bln dollars.
On Tuesday USD/JPY hit its maximum value since November 2014 and, of course, the financial authorities in the Land of the Rising Sun will hardly accept quietly this turn of events. We have already seen some comments in this regard, but they will hardly be able to substantially change current trends.
According to strategists at BNP Paribas, USD/JPY is likely to continue its downward movement, reaching 108.00 at the end of the second quarter.

Bank of America expect EUR/USD below 1.10 in June and parity at the end of the year

Forex strategists at Bank of America noted that the recent growth of the euro is a sign that the markets no longer pay particular attention to economic data or actions taken from central banks. For investors more important question is what will make regulators in the future?

At present risks to EUR/USD pair appear balanced, comment from Bank of America, but added that they still remain bearish in the medium term and intend to use raise of the pair to open short positions. Experts predict that the Fed will raise rates in June and the difference in monetary policies of the US and the Eurozone will reflect in exchange rates.

Against this background, Bank of America predict a decline of EUR/USD below 1.1000 in June and parity at the end of the year. Strategists added that the danger for Britain to withdraw from the European Union threatens not only the pound but also the single currency. Short positions in EUR/USD look more attractive option for hedging risk than sales of GBP/USD.

Is there still a chance for parity in EUR/USD?

Over the past three weeks bears in the euro suffered a series of strokes. Mario Draghi expressed doubts that rates will be lowered further, data on inflation in the Eurozone was better than expected and the Fed seems to occupy an increasingly cautious position on tightening monetary policy. Against this background, the strong report on the labor market in the US, published on Friday, failed to substantively support the USD.

Despite the unpromising at first sight picture, forex strategists of Goldman Sachs still provide parity in EUR/USD. The bank expect US regulators to raise interest rates in June, giving signal for such intentions after their meeting in April. Until then, the pair will likely remain locked in this range.

Besides monetary policies, however, there are other factors that may outweigh EUR/USD, provoking a sharp decline, but for now investors seem to ignore the dangers, warn from Goldman Sachs.

First, the markets for several months following topic on the possible withdrawal of Britain from the European Union. Political uncertainty undermine pounds, but if the electorate vote in favor of Brexit, this would be a negative factor for the euro as it is likely to appear a sell-off of European assets.

On the other hand, if the UK remains in the EU, the attention will focus on likely raise of rates in the country. In similar developments, from Goldman Sachs expect growth of sterling by about 15% in the subsequent 12 months.

Second, investors seem to have forgotten an old problem on the continent - Greece. The latest news hint of growing tension between the International Monetary Fund, Berlin and Athens. Approaching July 20, the date on which the Balkan country must return ECB 2.2 bln euro. IMF continues with calls for writing off part of the debts. Such a move, however, is politically unacceptable to Germany and other European countries. Greek saga is not new to the market, but the return of the subject in the foreground may impair the attractiveness of European assets in the second half, warn Goldman Sachs.

Commerzbank: Technical comments on USD/JPY

Forex strategists at Commerzbank commented that USD/JPY recovers its downward movement, breaking below support located at Y110.67. As a result, it is very likely scenario testing the lower limit of the current seven weeks channel around Y109.90.

According to analysts, any attempt to increase would encounter difficulties around the levels Y111.45-65. Next resistance is the middle of the channel at Y111.88 and the maximum located on Y113.87.

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Societe Generale: It is not yet ripe for selling EUR/USD

EUR/USD pair demonstrated confident growth four days in a row, as quotations formed a maximum near 1.1410.

Despite the upturn, however, forex strategists of Societe Generale were not convinced that the time is right to enter short positions as it remains the likelihood of continuing increases in the course.

If oil prices continue to become cheaper and if risk appetite gets worse, then sales of the euro would look more attractive. But analysts advise investors to wait because in this formula are present too many "ifs".

ING forecasts for EUR/USD

EUR/USD pair managed to rise lately, but forex strategists of ING noted that they still view with mistrust of pair's successes. Analysts remind that there are no fundamental reasons for the establishment of sustainable movement upwards.
The bank noted that growth was prompted by the revised expectations of investors about the pace of tightening the monetary policy of the Federal Reserve. The direction of future action is not questioned, while European Central Bank continues with stimulus measures and negative interest rates. Against this background, pressure on EUR/USD will probably preserve, although it will not be so strong given that the effectiveness of the instruments of the ECB weakened, while the increase in rates in the US will be very carefully.
By ING advise their clients to consider selling EUR/USD in case of an increase to $ 1.15 and purchases at $1.05/$1.08 area. Analysts adjusted their forecasts for the end of the year from $1.05 to $1.10. At the end of the first quarter of 2017 they provides a rate of $1.15 and $1.20 by December 2017.