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                                 The 2009 Year End Special Roberto Jbili FX Insight

22-12-2009

Fundamental Insight

The outperformance of USA Economy over other large economies indicate that USD economy is decoupeling from the other economies which underperformed the USA economy coz they gave their won cash to USA in a step which does not not helped a lot in overall score.

The GDP of USA today is around 3% when in Germany is -4.7%, UK -5%, Japan was performing well doing to the Oil pricing into demand for industrial activity which was confirmed in USA peer exporter via performance of companies like Catepillar.

The outperformance of USA economy over EuroZone indicate that problem remain in the credit side and that there will be a large correction in the housing market over medium to long term and that Housing reports will correct global stock markets.

Any negative data may came from USA related to housing, after pricing the Global Help to USA will have a very negative impact into investment confidence.

We expect that Housing data will lead stock market down. in the future the cash will not help Europe to sustain high real estate prices doing to a large rise in Oil which will limit the positive impact of bull market rally healthly economic conditions or better said, the recovery.

Based on above, we like to seprate our currency forecast in long and short term trading, again the fundamental analysis of timing came that markets was up via rise in housing which was confirmed by rise in materials and will be down via downside in materials, the same pattern of rise will the pattern of downs in many charts long or short term. Positive and negative housing data.

We like the outperformance of Energy vs Materials in the short to medium term which will sustain the Euro and limit USD anticpated bear commodities strong performance.

The markets will have confidence again in some new housing data which will build the exit of large investors as they enter to trade to close the pattern rally.

More Fundamental Facts

A- The Ignorance of NZD to latest markets rally, or the underperformance of NZD to stock markets, and here we note the NZD performance to Dow performance above 10.000 does not reflect the currency swap in making the USD stronger vs major currencies, it reflect the carry trade and via the carry trade which reflect the credit market crisis, it show that the world is unsure or has little confidence in the actual economic enviroment and about the positive impact of the currency swap and central banks help to FED to sustain the USA economy.

We confirm that the move will fail to pass the credit crisis without having an large correction in the real estate prices in Europe. To note, the Globe must also has liquidity and cash to perform like the USA economy.... HOW all the the Global economies will perform well if they gave all the cash to USA!

From where all this cash! the GDP of the USA is larger than the EC, USA spend more cash than the whole Euro Zone!

Simply we cant move cash from here and there and make economies perform at same level at same time, when cash will be returned, the USA economy will again build negative sentiment in Europe which will not be able to perform well since USA will build political tension in Iran since they will need cash to sustain the US economy.

This tension will be built by making Russia very nervos in Oil drop pattern with Central banks exit which will be explained later.

Iran, will remain an very sensative point to future Global politics, to note that the USA want to exit the cash from the market via Soros to build the war with Russia in Iran in a congress lead by his friends.

Agaim, the cash confirm the Iran war,...the stability of Oil from Aug to Dec show that the Globe suffer from cash limit since the cash is held by investors which does not invest in democratic party leadership and the point today is that Democratic party is leading the Globe inside the Republic leadership from point of economic view. this point caused the actual credit crisis from point of political view, republic party asked Japan to limit the cash after they lost the race in congress for the favor of democratic party and this show that there is an connection between republic party and 11 Sep attacks confirmed by the exit of Mike Blommberg from the republic party to democratic party.

Again the oil was not up coz there was no cash in markets at the size in which USA need to exit the problem, Oil signaled that the Global recovery or bear market rally is strong in USA and weak in Eurpe, please note GDP Growth in Europe and USA.

This point was noted  by the Euro drop from 1.52 to 1.38 in which via Roberto Jbili fundamental points of trading, the Euro was sold to buy USD and then with USD to buy Oil and they timied this orders with the Fed currency swap to lower the value of Euro.

Finally we note that Gov in Europe like Italy Berlusconi and Germany Merkel helped a lot

the cash lending to USA and all are about Soros case and political parties which belong to him (democratic polticial parties in face to republic Roman Franco parties which belong to Republic party in the USA.

Technical Insight

We like Carry trade, materials currencies to underperform energy currencies, the downside of metals to be short term lived and priced in USD via demand on USD to buy Oil and positive sentiment about USA economy for some investors inside the USA, not like outside the USA which trace at deep view the housing market inside the USA to anticipate the coming crisis in European real estate.

AUD/JPY CHART

NZD/JPY CHART

AUD/CAD CHART

EURO/NZD CHART

USDMXN: Flat, traders will start to build for the long term rally to above 15.

AUDNZD: Flat, The Gold will bring the pair to 1.22.

AUDCHF: To 0.85 then a rise to 0.98 levels in line with USD/JPY to 1vs1

NZDJPY: The NZD will fall to 0.57 levels then will rise to 0.72 The credit crisis and all the cash withdraw from markets lead by central banks will give the JPY an value, this value is composed by the cash which Japan hold and make Japan Currency reach. the NZD vs Market performance at the pattern of drop which will lead the USD/JPY to 0.67 may lower NZD/JPY to more than 0.35!

EURONZD: The Euro will rise to 2.25-2.30 levels then wil drop to 2.10 levels before an rally to 2.50. The Euro performance in this chart indicate: 1-that when Euro will rise to 2.30 market will correct, 2- the drop to 2.1o that USD will rise vs JPY to 1. vs 1 then the rally to 2.50 will conmfirm the exit from central banks. the drop at that time of Euro vs USD will limit the impact of JPY Global gain confirmed by out target to 0.67.

AUDJPY: The AUD vs JPY will be flat. The drop of Gold will not price the coming drop of JPY vs USD in line with stock markets performance. USD will be traded 1 to1 Vs JPY after a rise from below 0.88 levels, the drop to below 0.88 will strat from 0.93 levels. The AUD will drop to 0.73 levels then will rise to 0.80 levels then the AUD will drop to 0.50 levels since the JPY will rise to 0.67 vs USD when the central banks wil make the exit strategy and credit problems will arise again.

AUDCAD: The NO upside again for the AUD vs CAD, this confirm our view for the large Oil rise to above 100 $ levels then another rise, the rise of Oil will came in face of Gold drop, this will make this chart the most safer. AUD will drop to below 0.75 then to below 0.60.

Economic Data by Blommberg, IHT, Il sole 24 Italy

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