Technical Analysis - USDCAD bearish breakout to be started

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Something Interesting in Financial Video February 2014

Sergey Golubev, 2014.02.10 11:15

06: DURABLE GOODS

This is the 6th video in a series on economic reports created for all markets, or for those who simply have an interest in economics. In this lesson we cover the Durable Goods report.

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Previous parts:

• 01: NON FARM PAYROLL (Part 1) - ECONOMIC REPORTS FOR ALL MARKETS
• 02: NON FARM PAYROLL (Part 2)- ECONOMIC REPORTS FOR ALL MARKETS
• 03: TWO MORE UNEMPLOYMENT REPORTS
• 04: PRODUCER PRICE INDEX
• 05: ISM MANUFACTURING

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Durable Goods Orders (DGO) is an indicator of orders placed for relatively long lasting goods. Durable goods are expected to last more than three years, e.g.: cars, furniture, appliances, etc.

This indicator is important for the market because it gives an idea of the consumers' confidence in the current economic situation. Since durable goods are expensive, the increase in the number of orders for them shows the willingness of consumers to spend their money on them. Thus, the growth of this indicator is a positive factor for economic development and leads to growth of the national currency.

• Release Frequency: monthly.
• Release Schedule: 08:30 EST, the fourth week.
• Source: U.S. Census Bureau of the Department of Commerce.

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USDJPY M5 : 47 pips price movement by USD - Durable Goods Orders news event

EURUSD M5 : 32 pips price movement by USD - Durable Goods Orders news event :

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Sergey Golubev, 2015.05.23 12:35

Forex Weekly Outlook May 25-29 (based on forexcrunch article)

The US dollar made a comeback and the greenback was a big loser in a week that saw trends change. And now, US Durable Goods Orders, Consumer Confidence as well as UK, Canadian and US GDP data stand out. These are the highlight events in Forex calendar. Here is an outlook on the main market-movers for this week.

The Federal Reserve released minutes from its April 28-29 policy meeting, revealing the planned rate hike will not take place in June. Despite growing confidence in the US economic recovery, the recent data suggest a temporary slowdown. Weaker consumer spending, slow growth and employment data led policy makers to postpone their decision on raising rates. Fed officials were also disappointed that falling oil prices did not spur growth as anticipated and that the recent dollar softness muted inflation. The Fed has reiterated it will not raise rates until it is “reasonably confident” that prices are moving toward its 2% target. Will the US economy rebound from its recent soft patch? In the euro-zone, talk about front-loading QE hit the euro in particular. The common currency reversed its previous gains. In the UK, inflation dipped below 0% and in Japan GDP came out better than expected.

1. US Durable Goods Orders: Tuesday, 12:30. The U.S. manufacturing sector rebounded in March amid expansion in the transportation industry. New orders for long-lasting manufactured goods increased by 4.0%, to $240.2 billion, following a 1.4% decline in February. However, core durable goods orders, excluding the volatile transportation sector, declined 0.2% to $159.9 billion. The weak core figure followed seven months of negative readings, indicating the second quarter may not be as strong as forecast. A drop of 0.4% in orders and a gain of 0.5% in core orders is on the cards.
2. US CB Consumer Confidence: Tuesday, 14:00. Consumer confidence fell unexpectedly in April to 95.2 from 101.4 in March amid weak job growth. While economists expected sentiment to rise to 102.5, sentiment plunged to the lowest level in 2015. Fuel prices continue to remain below last year’s prices contributing to growth but the soft patch in the US labor market overshadowed this positive development. 95.3 is expected now.
3. Canadian rate decision: Wednesday, 14:00. The Bank of Canada kept its overnight rate unchanged at 0.75%. Governor Stephen Poloz forecast a positive outlook for the Canadian economy, despite the current weakness related to the collapse in oil prices. The central bank cut its original 1.5% growth forecast for the first quarter of 2015, to non- growth. However, Poloz insisted the economy would rebound in the second half of the year. Nonetheless, many economists believe the oil prices collapse will have a longer effect on Canadian growth.
4. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial claims for unemployment benefits increased by 10,000 claims last week, reaching 274,000. Analysts expected a smaller rise to 271,000. Despite last week’s increase, the number of claims remained below 300,000 indicating the labor market continues to strengthen for the 11th week. The four-week moving average fell 5,500 last week to 266,250, reaching the lowest level since April 2000. A similar level of 272K is estimated now.
5. UK GDP: Thursday, 8:30. According to the preliminary release for Q1 2015, the economy expanded by only 0.3%. The figure will likely be upgraded to 0.4% this time. It’s important to note that this growth rate is lower than seen beforehand.
6. Canadian GDP: Friday, 12:30. Canada’s economy stalled in February showing no-growth, after contracting 0.2% in January. The mild improvement in the service sector was offset by contraction in goods-producing industries. Both manufacturing and energy sectors shrank in February suggesting the energy sector is not the sole cause for Canada’s economic weakness, as implied by the Central Bank. Economists believe the BOC will have to cut rates later this year to spur growth. An advance of 0.2% is on the cards now.
7. US GDP: Friday, 12:30. According to the first release for Q1, the economy grew at an annual rate of only 0.2%, below expectations. Things are expected to turn even lower, with a downgrade to contraction of around 0.9% this time . Fed Reserve chair, Janet Yellen also discussed the possibility of raising rates if the employment market will show substantial signs of growth.

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Sergey Golubev, 2015.05.23 12:49

USD/CAD forecast for the week of May 25, 2015, Technical Analysis (based on fxempire article)

The USD/CAD pair broke higher during the course of the week, clearing the top of the three hammers that we have recently formed. We crashed into the 1.23 level, which we see as the beginning of a significant barrier to the upside, and as a result we need to get back above the range for the week in order to consider buying. If we do, we feel that the market will probably head back towards the 1.28 level. It will be interesting see how this plays out though, because the oil markets don’t look like they agree.

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Sergey Golubev, 2015.05.25 18:34

Yellen's Words Fuels The Greenback's Rise (based on forbes article)

"The U.S. dollar hit a two-month high against the yen and is holding firm against other Group of 10 currencies on Monday after Federal Reserve Chair Janet Yellen suggested late last week the central bank will raise interest rates in 2015."

"With U.S. markets and most of Europe on holiday today, the thinned trading conditions will have most investors looking ahead to tomorrow’s forward-looking U.S. durables data, and Friday’s release of second estimate of U.S. gross domestic product (GDP) as key fundamental touch points for the dollar’s direction. Obviously, any news on Greece or of a potential Grexit will have an immediate impact on the EUR, similar to what happened in the overnight session in Asia."

"Yellen argued that the slowdown in first-quarter GDP growth was “largely” due to temporary factors, such as the record cold weather and a port dispute. The market took “largely” as being more important or convincing than Yellen’s “in part” verbiage that was used in the most recent FOMC statement (there will be a rebound in growth in the second quarter)."

"Yellen repeated her assessment that “it will be appropriate at some point this year to take the initial step to raise the federal funds target.” Not a very transparent statement on timing, but if you include rebounding economic growth, plus a pickup in consumer prices that’s supported by wage growth, you have a fixed-income market now pricing in a rate hike no later than September."