Market Drivers - Currencies: Today's Comment Today's Chart - EUR/USD

MARKET DRIVERS – CURRENCIES
FX Research • 19.07.2010 • Jyske Markets
Today’s Comment this means that Hungary now has been cut Today’s Chart – EUR/USD
off from access to the remaining part of the
EUR was under slight pressure overnight as
loan package, and the uncertainty about the
it was revealed that the EU and the IMF have
future process and implications has not only
for the time being suspended the routine
put HUF under pressure, it has apparently
evaluation of Hungary as part of the loan 4-hour chart
also to some extent rekindled the
programme that was established for the 1,30
nervousness about the debt problems in
Hungarians back in 2008. The EU and the
Europe prior to the release of the results of
IMF do, however, state that considerable
the stress test of the European banking 1,28
progress has been noted for the Hungarian
sector on Friday. If the markets fairly quickly
economy, but further initiatives are still
calm down, it cannot be ruled out that the 1,26
needed to bring Hungary back on track with
euro will again climb to higher levels against
respect to strong and sustainable economic
the US dollar. For the time being, however, 1,24
growth. In this respect the IMF states in the
we have chosen to maintain our negative
press release on Saturday that difficult
view of the euro until we get a clearer 1,22
decisions must still be made, not only in
indication of the implications of
respect of revenue but also it will be
development in Hungary over the coming 1,20
necessary to take a closer look at spending.
days. Also, today Greece will present its
Even though, according to the press release,
budget, and if it meets expectations, it may
the discussions that the EU and the IMF 1,18
reduce the nervousness.
have had with the Hungarian authorities 7 Jun 14 Jun 21 Jun 28 Jun 5 Jul 12 Jul 19 Jul
over the past weeks were constructive and Today’s Key Events
that in many respects agreement was N/A Public budget (GRC) EUR/USD Moving Average (50) Moving Average (233)
reached there is still a number of issues that 10:00 Current account (EUR)
remain open. Even though the IMF states 16:00:00 NAHB housing market index
that it will continue to work with the (USD)
Hungarian authorities to find a solution, the Monday night
negotiations have for the time being been Source: Bloomberg/Jyske Bank
07:00 Leading economic indicator, final
interrupted and the IMF representatives (JPY)
have returned to Washington. In actual fact
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Currency Spot Short-term market drivers Technical levels 1-month

target
Majors
EUR/USD 129.02 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR - Resistance 130.00 next 131.00
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends - Support: 124.80 next 124.00 123
The Fed’s quantitative easing keeps the USD value low; higher government debt does not result in increases in the US market rate as it should +
USDDKK 577.46 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR + Resistance 597.09 next 600.94
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends + Support: 573.21 next 568.83 606
The Fed’s quantitative easing keeps the USD value low; higher government debt does not result in increases in the US market rate as it should -
EURGBP 84.27 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling + Resistance 84.60 next 86.00
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted - Support: 83.25 next 81.00 82.50
We expect that the quantitative easing came to an end in February and that the BoE will start normalising its monetary policy in H2 -
GBPDKK 884.21 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling - Resistance 895.10 next 919.96
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted + Support: 880.82 next 866.48 903
We expect that the quantitative easing came to an end in February and that the BoE will start normalising its monetary policy in H2 +
EURJPY 111.86 Focus on debts in Southern Europe has caused pressure on the single European currency and shifted the balance of power between EUR and JPY - Resistance 113.00 next 114.40
Risk of renewed risk aversion supports JPY slightly - Support: 109.15 next 107.50 110
Decent growth in recent months; the economy is, however, still fragile; low growth ahead and deflation may once again be a theme +
JPYDKK 6.66 Focus on debts in Southern Europe has caused pressure on the single European currency and shifted the balance of power between EUR and JPY + Resistance 6.83 next 6.93
Risk of renewed risk aversion supports JPY slightly + Support: 6.59 next 6.51 6.77
Decent growth in recent months; the economy is, however, still fragile; low growth ahead and deflation may once again be a theme -
EURCHF 135.18
Please refer to the publication, CHF: stil moving upwards -
CHFDKK 551.12
Please refer to the publication, CHF: stil moving upwards -
Currency Spot Short-term market drivers Technical levels 1-month

target
Scandinavia
EURNOK 813.70 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels - Resistance 815 next 824
Norges Bank was one of the first ones to raise its interest rate. Even though we may be in for a slow start, we foresee 3% in the 1-year term - Support: 812 next 804 800
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK +
NOKDKK 91.54 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels + Resistance 91.76 next 92.67
Norges Bank was one of the first ones to raise its interest rate. Even though we may be in for a slow start, we foresee 3% in the 1-year term + Support: 91.42 next 90.42 93.10
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK -
EURSEK 951.57 Still risk that SEK will suffer a blow in the event of risk aversion - Resistance 965 next 980
Riksbanken expresses optimism about the economy and thinks Sweden has been through the worst part of the crisis + Support: 935 next 925 980
After GDP for Q2, Q3 and Q4 2009 has been revised up, an interest-rate hike in July is very likely +
SEKDKK 78.27 Still risk that SEK will suffer a blow in the event of risk aversion + Resistance 79.69 next 80.55
Riksbanken expresses optimism about the economy and thinks Sweden has been through the worst part of the crisis - Support: 77.21 next 76.03 76.00
After GDP for Q2, Q3 and Q4 2009 has been revised up, an interest-rate hike in July is very likely -
Current Strategies
Currency Strategy Description of Strategy Date of Entry Target Stop READ
Entry Level Loss MORE
Due to deflation in Japan, BoJ will keep rates unchanged for quite som time into 2011
USD/JPY Option Widening of the interest-rate spread to the US and the euro zone, among others, will put the yen under pressure 16-12-2009 89.68 106 N/A CLICK HERE
In the long term, the dollar will strengthen due to a faster economic recovery and stronger rate hikes in the US
Please note: We point out that FX investment is currently associated with extraordinarily high uncertainty.
But for long-term risk tolerant investors, there may be good investment opportunities in these turbulent
times. This recommendation is only relevant for very risk-tolerant clients with the right risk profile and the
overall financial strength to cope with any loss that may be incurred.
Disclaimer & Disclosure

Jyske Bank is supervised by the Danish Financial Supervisory Authority.
The research report is based on information which Jyske Bank finds reliable, but Jyske Bank does not assume any
responsibility for the correctness of the material nor any liability for transactions made on the basis of the information
or the estimates of the report. The estimates and recommendations of the research report may be changed without
notice. The report is for the personal use of Jyske Bank's customers and may not be copied.
This is a recommendation and not an investment report.
Conflicts of interest
Jyske Bank has prepared procedures to prevent conflicts of interest. These procedures have been incorporated in the
business procedures covering the research activities of Jyske Markets, a business unit of Jyske Bank.
Jyske Bank's FX, money market and commodity analysts may not hold positions in the instruments for which they
prepare research reports, but Jyske Bank is permitted to hold positions and/or have interests in the instruments for
which such reports are prepared. The analysts receive no payment from persons interested in individual research
reports.
Read more about Jyske Bank's policy on conflicts of interest at www.jyskebank.dk/terms
Risk
FX, money market and/or commodity investment involves risk. Movements in the credit market, the sector and/or the
news flow, etc. regarding the issuer may affect the exchange rate/the interest rate/the price of the commodity. See the
front page of the research report for our view of the risk associated with the currency/interest rate/commodity
investment. The risk factors and/or the sensitivity calculations stated in the report should not be regarded as
exhaustive.
Update of the research report

Analyses, recommendations, and ad hoc publications are not updated. A new publication will instead be published if
and when it is found necessary. Market comments are updated daily.
See the front page for the initial date of publication of the report.
All prices stated are the latest trading prices at the time of the release of the research report, unless otherwise stated.

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MARKET DRIVERS – CURRENCIES

FX Research • 19.07.2010 • Jyske Markets

Publisher Editor: Read more:

Currency Spot Short-term market drivers Technical levels 1-month

Currency Spot Short-term market drivers Technical levels 1-month

Disclaimer & Disclosure

This is a recommendation and not an investment report.

Read more about Jyske Bank's policy on conflicts of interest at www.jyskebank.dk/terms

Update of the research report

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