My Forecasts

10:25GMT Why EURs held on not making new lows (may be the longterm trend for GBPs)
Deutsche Bundesbank President Axel Weber dropped a big hint Tuesday about how the European Central Bank would continue to keep the Greek banking system afloat if the government's sovereign debt is downgraded further. Weber said the ECB could expand the system of discounts--or "haircuts"--it imposes against certain classes of collateral when it lends to the banking system. "It's not necessarily the only solution to have a level of rating at which we cut off access to the central bank," Weber told the TV platform Reuters Insider after a press conference at the Bundesbank. "We could take higher haircuts for (paper with) lower ratings." There are two particularly sensitive events that the ECB has to negotiate as it returns to a "normal" monetary policy stance. The first one comes on July 1, when the mammoth EUR442 billion 12-month tender that did so much to settle the money market last year will expire without being replaced. In theory, the end of that refinancing could remove at a stroke all the surplus liquidity that banks have needed to reassure themselves that they can carry out their daily business. In practice, though, the ECB has already ensured that the process will be smoothed--by a six-month tender at the end of March and a special term tender around the end of June. By contrast, until Tuesday, no one had indicated how the ECB intends to deal with the other great test facing it at the end of the year. On Dec. 31, the ECB intends to revert to its original, stringent criteria regarding the collateral against which it is prepared to lend. Until the crisis, the ECB had insisted that sovereign debt must have at least one international rating of A- to be eligible as collateral, but it lowered this threshold to BBB-, the traditional dividing line between investment-grade and junk, as the weaker members of the euro zone saw their debt downgraded because of the impact of the crisis on their budget deficits. Greece's well-documented problems with its budget deficit have already caused it to be downgraded below the A- threshold by Fitch Ratings Agency and Standard & Poor's Corp., leaving Moody's Investor Service as the only one to rate it above the original, tighter threshold--and Moody's, too, has warned that it may need to downgrade Greece again if the deficit-reduction measures promised by Prime Minister George Papandreou's government don't work. Until Tuesday, only Austrian National Bank Governor Ewald Nowotny had acknowledged that a problem was looming. ECB President Jean-Claude Trichet pointedly refused to answer questions on the subject at the ECB's regular monthly press conference last Thursday. Even Nowotny hadn't advanced much beyond saying it was "intolerable" that a single rating agency could effectively decide whether a euro-zone member state had access to ECB liquidity or not. Greece's problems with the ECB's collateral framework are two-fold: on the one hand, it would raise the credit costs of a country that will still have to borrow nearly 9% of its gross domestic product this year even if everything goes right. The ability to post bonds as collateral for credit is a decisive factor in a bond's overall attractiveness, and bonds that fail to meet this criterion habitually have to pay a much higher interest rate. More importantly, the loss of eligible collateral status would severely restrict the ability of Greek banks, which are traditionally the biggest holders of their government's debt, to borrow from the ECB, and this at a time when they are heavily dependent on it precisely because other banks have become less willing to lend to them. "I think that is something that needs to be discussed, but at this juncture there's no problem," Weber said. "Greece has unlimited access to refinancing operations with banks, and banks can use the collateral issued by the Greek government to refinance with the central bank." The ECB has since its inception imposed haircuts on some of the non-sovereign quality debt it accepts as collateral. The system assumed greater importance in 2008, when the ECB needed to provide far greater levels of financing in an environment in which fewer and fewer debt securities appeared trustworthy. As of today, it still doesn't apply haircuts to debt issued by sovereign states within the 16-country area, but applies a sliding scale of haircuts up to more than 20% for non-sovereign-debt.

08:55GMT Lookout for JPYs direction in Pattern Charts section.
04:30GMT Change of direction in all our pairs.. now the day's trend shows DOWN. Update - my mistake only GBPs changed direction EURs Uptrend is still holding. Wait for pre-"Data" 7 & 9:30GMT and T'mrrows US trade data will define the long-term trend..
02:30GMT GBPUSD lower risk towards 1.4915 but if players launch their attack it should land near 1.5135 very soon. Compare Liquidity of USDJPY & GBPJPY - a hint GBP for direction
00:00GMT Good Morning Friends, General direction is up for almost all of our pairs. JPY crosses expecting wild moves but UPtrend should win over down. Don't forget the fundamentals for today. Data release will be the key for the success.