EURUSD Technical Analysis 2015, 12.04 - 19.04: Bearish Breakdown with 1.0461 Next Key Support Level

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newdigital, 2015.04.10 19:22

Forex Weekly Outlook Apr. 13-17 (based on forexcrunch article)

The US dollar managed to stage a recovery after the previous blows, especially against the majors. A busy week awaits traders with US inflation and consumer data as well as rate decisions in Canada and the euro-zone among other events. Here is an outlook on the highlights of this week.

US data began recovering and the dollar followed. The ISM Non-Manufacturing PMI was OK and JOLTs beat expectations. But it was the meeting minutes that provided the greenback with the biggest push: they revealed that in March, some members talked about hiking in June. Despite the known fact about the existence of hawks and the timing of the meeting before the weak NFP, the greenback soared. It probably remains the cleanest shirt in the dirty pile. Elsewhere, Greek worries weighed on the euro, elections worries hurt the pound and the yen also slid. The Aussie stood out, enjoying yet another “no change” decision by the RBA.

1. UK CPI: Tuesday, 8:30. Inflation in the UK reached a flat 0% in February, a figure that alarmed many. Will Britain enter deflation? This could push back any potential rate hike for even longer and also cast its shadow on the euro-zone. Official expectations stand on another 0% read y/y.
2. US Retail Sales: Tuesday, 12:30. For a third consecutive time, retail sales squeezed and disappointed. The fall of 0.6% in February will likely be followed by a bounce in March of 1.1%. Also core sales have followed the same pattern with a drop of 0.1% in February. Also here, a bounce is on the cards: +0.7%.
3. US PPI: Tuesday, 12:30. Producer prices serve as a warm up to consumer prices. After a drop of 0.5% in both headline and core figures in February, rises are expected in both, 0.2% and 0.1% respectively, especially as oil prices have stabilized.
4. Chinese GDP: Wednesday, 2:00. The world’s No. 2 economy has grown at a pace of 7.3% in Q4 2014 and is expected to experience slower growth in Q1. Some say it is inevitable and others say it is wisely engineered by the leadership. Growth in China closely impacts Australia but certainly has implications for the entire world. A slide to 7% y/y is on the cards and as authorities wish to see.
5. Euro-zone rate decision: Wednesday, decision at 11:45, press conference at 12:30. In the last meeting by the ECB in early March, Draghi showed determination in implementing the QE program announced in January. Implementation has begun and it is going well. The Bank made it clear that success of the euro-zone in general and particularly regarding inflation depends on full implementation. Will he continue the same determination? If so, the euro would feel the weight. If optimism rises due to the recent signs of growth, we could see the common currency rise. The interest rate is expected to remain unchanged at 0.05% with a negative deposit rate of 0.20%. The latter serves as the lower bar for buying bonds in the QE program
6. Canadian rate decision: Wednesday, 14:00. The Bank of Canada left the interest rate unchanged at 0.75% and is expected to do so once again. After the surprise cut in January, Poloz and his team seemed more optimistic about the economy and hinted that this was not the beginning of a new loosening cycle. How will they sound now? Worries about Q1 growth could be echoed in the statement. Note that the release is followed by a press conference at 15:15.
7. Australian employment data: Thursday, 2:30. Australia enjoyed job growth in February: 15.6K jobs were added. Also the unemployment rate went in the right direction and dropped to 6.3%. In the bigger scheme of things, unemployment is still on the rise and is likely to rise later on in the year. Very similar number are expected now: a gain of 15.1K jobs and an unemployment rate of 6.3%.
8. US housing data: Thursday, 12:30. These figures went in different directions: building permits rose to a promising 1.09 million (annualized) in February, while housing starts stood on 0.90 million. The latter can be blamed on the cold winter weather, while the former is more forward looking. Building permits are expected to stand at 1.08 million (annualized) and housing starts to bounce back to 1.04 million. Note that revisions are quite common here.
9. US unemployment claims: Thursday, 12:30. The weekly gauge of jobs did bounce back from the lows but beat expectations by hitting 281K. Perhaps more importantly the moving average fell to levels last seen many years ago at 282K. It was above 300K not too long ago. A small rise to 284K is on the cards.
10. US Philly Fed Manufacturing Index: Thursday, 14:00. The regional figure is for the month of April, providing a fresh insight on the manufacturing situation. 4 consecutive misses on expectations set the number on 5 points last time. A small rise is likely: 5.5 points.
11. UK employment data: Friday, 8:30. This is the last jobs report before the May elections and carries more political weight. The claimant count change, aka jobless claims, continued dropping quickly in February: 31K. A similar number is probable now – a slide of 28.5K. The unemployment rate is also going in the right direction, and stood on 5.7% in January. A drop to 5.6% is expected. This is what the current conservative coalition government is championing. However, the average earnings index has risen by only 1.8% y/y in January, and this provides fuel for the opposition Labour. A tick down to 1.7% is expected now.
12. US CPI: Friday, 12:30. When looking at the headline number, the US is experiencing deflation, but this is clearly oil-related. Year over year core inflation is actually on the rise, reaching 1.7% in February. Both monthly indicators rose 0.2% last time and could follow suit this time, with +0.3% in the headline number and +0.2% in the core figure.
13. US Consumer Confidence: Friday, 14:00. The Reuters / University of Michigan consumer confidence survey edged up to 93 points in the final read for March. We now get the preliminary figure for April and a higher score is expected: 93.8 points.

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newdigital, 2015.04.11 12:30

US Dollar Fundamentals (based on dailyfx article)

Fundamental Forecast for Dollar: Neutral

• A break above key price levels leaves the US Dollar in position to rally into May
• An intensified sensitivity to FOMC timing will gnaw at speculative long Dollar exposure

The US Dollar finished the week near decade-plus highs versus the Euro as it rallied against nearly all G10 counterparts. A noteworthy gain in US Treasury Yields helped explain much of the Dollar’s rally, but heavily stretched positioning and price momentum makes further gains relatively unlikely.

Global interest rate differentials remain the main driver of major currency moves, and expectations of US Federal Reserve interest rate hikes have pushed the US Dollar to impressive peaks. The US Federal Reserve is in fact the only G10 central bank expected to raise interest rates in the coming 12 months, and as long as this remains the case we expect the US currency to hold its gains against lower-yielding counterparts. Yet there remains clear uncertainty surrounding the Fed’s moves. Further Dollar strength is far from guaranteed.

Traders will look to the coming week’s US Retail Sales and Consumer Price Index inflation data for the next clues on the Federal Reserve’s interest rate policy, and major surprises could force important US Dollar volatility. Analysts predict the Advance Retail Sales report will show that consumer spending grew by 1.0 percent March—the first month-over-month gain in three months and the fastest pace of expansion in exactly a year. Lofty expectations leave ample room for disappointment and the odds seem stacked against the US Dollar ahead of the event.

Late-week CPI inflation figures represent the biggest risk to the Greenback given their clear implications for the future of US Federal Reserve monetary policy. Headline CPI data is expected to show prices remained exactly unchanged in the 12 months through March, while CPI excluding food and energy will likely match February’s pace at 1.7 percent. Topside surprises could increase the Fed’s sense of urgency in raising interest rates and normalizing monetary policy.

Recent FOMC minutes showed a surprising level of support for raising interest rates at the highly-anticipated June meeting, and the jump in yields helped drive renewed Dollar strength. Yet rhetoric is one thing and actions an entirely different matter. Interest rate futures show a miniscule 7 percent chance that the Fed will hike in June—hardly encouraging for US Dollar bulls.

Patience may wear thin for those holding USD-long positions rather quickly; recent CFTC Commitment of Traders data showed large speculators were their most net-long US Dollar versus the Euro (short EUR/USD) on record. And though this in itself does not signal that the currency is likely to reverse, it does imply that there may be relatively few traders left to sell. The key question is simple: will interest rate expectations be enough to fuel further Dollar gains? It’s entirely possible, but we’ll keep a close eye on upcoming data given clear risks of an important USD reversal.

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newdigital, 2015.04.12 12:12

EUR/USD Weekly Fundamental Analysis, April 13-17, 2015 – Forecast (based on fxempire article)

The EUR/USD tumbled 54 points to trade at 1.0603 on Friday to close the week at a recent bottom. Greece, Europe’s most-indebted state, is negotiating with euro-area countries and the International Monetary Fund on the terms of its 240 billion-euro ($259 billion) rescue. The standoff, which has left Greece dependent upon European Central Bank loans, risks leading to a default within weeks and its potential exit from the euro area.

German Chancellor Angela Merkel has repeatedly said that she wants Greece to stay in the euro and along with French President Francois Hollande last week expressed concern that time is running short.

“There’s no time to lose,” Merkel said at a news conference with Hollande after they met in Berlin March 31. Hollande said too much time has been lost already, adding that he would like an agreement and “the sooner, the better.”

Greece made another plea to the euro zone for cash to avert bankruptcy but was told to present an improved list of economic reforms within six working days for finance ministers to pave the way for any more lending, EU officials said on Thursday.

Greece told the same forum last week that it would have difficulty paying back an installment to the IMF due on Thursday and covering its expenses for wages and pensions. But it subsequently said it would make the IMF payment on time.

Officials said euro zone experts were not convinced the liquidity position was a dire as portrayed by Athens, and some suspected an attempt to scare creditors into releasing funds.  Once Athens agrees on a set of measures with its creditors — euro zone governments and the International Monetary Fund — and passes laws through parliament to implement them, it could get 7.2 billion euros that remain to be disbursed from its existing 240 billion euro international bailout.

But after 10 weeks in office the Tsipras government has been unable to agree with lenders, mainly because many of the measures run counter to his election promises to put an end to austerity and refuse “recessionary” measures.

The U.S. dollar hit a near-three-week peak on Thursday, driven higher by sentiment that U.S. interest rates inevitably will rise, with the prospect of a June increase still in the mix despite spotty economic data. Interest rate differentials between benchmark U.S. and German 10-year government bonds widened to 1.771 percent on Thursday, their biggest spread since March 26.

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newdigital, 2015.04.12 17:29

EUR/USD weekly outlook: April 13 - 17 (based on investing.com article)

The euro was down against the dollar for the fifth straight session on Friday, falling to one-month lows as the contrasting monetary policy stance of the European Central Bank with the Federal Reserve acted as a drag.

EUR/USD was at 1.0603 in late trade, down 0.51%. For the week the pair lost 3.57%, the worst weekly performance since September 2011.

The single currency has already weakened broadly this year after the ECB unveiled a trillion-euro quantitative easing program in January. The bank started asset purchases last month, pushing euro area bond yields to new lows.

Demand for the dollar was underpinned by expectations for higher interest rates, as investors regained confidence that the U.S. economy would continue to recover after recent economic reports pointed to a slowdown at the start of the year.

The greenback received a boost earlier in the week after comments by the presidents of the New York and Richmond Federal Reserve banks made the case for the Fed to begin policy tightening as early as the summer.

Some investors had pushed back the timing of a rate hike until late 2015 after a surprisingly weak U.S. employment report for March.

The euro was also weaker against the yen, with EUR/JPY down 0.81% to 127.48 at the close, the weakest since March 16.

In the week ahead, Wednesday’s monetary policy announcement and press conference by the ECB will be in focus. U.S. data on retail sales, inflation and consumer sentiment will be closely watched for further indications on the strength of the recovery.

Tuesday, April 14

• The U.S. is to release data on retail sales and producer prices.

Wednesday, April 15

• The ECB is to announce its interest rate decision. The rate announcement is to be followed by a press conference with President Mario Draghi.
• The U.S. is to release reports on industrial production and manufacturing activity in New York state.

Thursday, April 16

• The U.S. is to release a string of reports, including jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.

Friday, April 17

• The euro zone is to produce revised data on the consumer price index.
• The U.S. is to round up the week with data on consumer prices and consumer sentiment.

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newdigital, 2015.04.12 17:37

EUR/USD forecast for the week of April 13, 2015

The EUR/USD pair fell hard during the course of the week as the 1.10 level continues to be resistive. The 1.05 level below has been supportive, but it would be only a matter of time before we fall below there in our opinion. We would head to the parity level at that point in time, and believe that bounces continue to be nice selling opportunities as the European Central Bank continues to offer significant liquidity measures that of course can work against the value of the Euro. We have no interest in buying.

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newdigital, 2015.04.13 06:21

EUR/USD technical analysis from Goldman Sachs - Elliot Wave (based on forexlive article)

• It peaked on Monday, right underneath an important resistance area at 1.1052-1.1099. This region included the interim high (bearish key day reversal) from Mar. 26th, the interim low from Jan. 26th and the 55-dma.
• It's since broken lower from a triangle type pattern (ABCDE). Triangles tend to be characteristic of wave 4s which in this case suits the underlying wave count and implies that there is further downside potential.
• The next near-term support stands down at 1.0487- 1.0458 (1.618 extension from Mar. 26th and the low from Mar. 15th).

• The LT target for EURUSD is back in focus; 1.0286-1.0103... Ultimately still like this level as a near- to medium- term target

• This 1.0286-1.0103 pivot includes 76.4% retrace of theentire '00/'08 rise as well as an equality target taken from the Jul. '08 peak. Reaching it would satisfy a multi-year ABC which began in '08. It would consequently be an ideal place to take on a more neutral outlook.

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newdigital, 2015.04.13 11:32

EUR/USD Technical Analysis: March Bottom Threatened (based on dailyfx article)

• EUR/USD Technical Strategy: Flat
• Support: 1.0456, 1.0386, 1.0229
• Resistance:1.0640, 1.0868, 1.1040

The Euro continues to push lower against the US Dollar, with prices on pace to retest monthly lows below the 1.05 figure. A daily close below the 1.0456-1.0513 area (March 16 low, 50% Fibonacci expansion) exposes the 61.8% level at 1.0386. Alternatively, a move back above the 38.2% expansion at 1.0640 opens the door for a challenge of the 38.2% Fib retracement at 1.0868.

MetaTrader Trading Platform Screenshots

EURUSD, D1, 2015.04.13

MetaQuotes Software Corp., MetaTrader 5

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Something Interesting in Financial Video April 2015

newdigital, 2015.04.14 05:56

EUR/USD Forex Analysis- April 14, 2015

The EUR/USD pair fell during the bulk of the session on Monday, testing the 1.05 handle. This is an area that has been supportive in the past, so therefore it does not surprise me at all that we bounced. That bounce of course forming a hammer is a very bullish sign but I have no interest in buying this pair. I recognize that the Euro is a massive ball of trouble waiting to happen, and as a result I have no interest in being long of this pair. On top of that, the US dollar of course has strengthened exponentially for some time, so as a result I have no interest in shorting the Dollar.

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newdigital, 2015.04.14 06:05

EUR/USD: Towards 1.15 Or Below 1.00 - JP Morgan (based on efxnews article)

JP Morgan's EUR/USD forecast profile is unchanged this month and continues to show a slower decline for the rest of the year, after an unprecedented -11% drop in Q1. JPM's Quarter-end targets are 1.07 in Q2, 1.06 in Q3 and 1.05 in Q4.

"Downside targets would be more aggressive were it not for the US dollar’s valuation problem and the Fed’s gradual pushback on a strong currency," JPM argues.

"Based on JPM’s expectations that the ECB balance sheet expands to €3.5trn by end 2016 and that 5-yr spreads might move about 50bp in the US’s favour, EUR/USD’s fair value is about 1.12 (blue cell in table 1). The euro's current level near 1.06 would be justified if the ECB balance sheet were heading to €5trn (unlikely given how Euro area growth is improving) or the USEuro 5-yr spread would widen to over 300bp over the cycle (unlikely as the Fed dots fall towards the money market curve due to mediocre US growth)," JPM adds.

"So while we know that currencies can undershoot for some time until a macroeconomic or policy catalyst emerges, we are reluctant to forecast trend extensions that have little empirical basis," JPM argues.

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newdigital, 2015.04.14 11:51

The Next Big Levels In EUR/USD, GBP/USD, USD/CAD - Goldman Sachs (based on efxnews article)

Starting with EUR/USD, GS notes that it peaked least week right underneath an important resistance area at 1.1052-1.1099, a  region included the interim high (bearish key day reversal) from Mar. 26th , the interim low from Jan. 26th and the 55-dma.

"It’s since broken lower from a triangle type pattern (ABCDE). Triangles tend to be characteristic of wave 4s which in this case suits the underlying wave count and implies that there is further downside potential.  The next near-term support stands down at 1.0487- 1.0458 (1.618 extension from Mar. 26th and the low from Mar. 15th)," GS projects.

Bigger picture, GS targets f EURUSD at 1.0286-1.0103 pivot which includes 76.4% retrace of the entire ‘00/’08 rise as well as an equality target taken from the Jul. ’08 peak.

Moving to GBP/USD, GS notes that it has broken trendline support and this should in theory be a strong signal opening up potential to accelerate lower.

"The next big level lower is 1.4372-1.420. This includes two long-term Fibonacci retracements and the low from May ’10...Put simply, it appears that GBPUSD is gradually making its way down to the bottom of its multi-decade range," GS projects.

Finally in USD/CAD, GS thinks that the focus should be back on the range highs; 1.2799-1.2835.

"Would however need a clean break above 1.2799-1.2835 to cancel out the risk of a double top and to diminish the bearish implications of the bearish key day reversal which formed on Mar. 18th . Ideally want to play the range until a break in either direction is finally attain," GS advises.

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How to Start with Metatrader 5

newdigital, 2015.02.03 18:48

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newdigital, 2015.04.14 15:25

• past data is -0.5%
• forecast data is 1.1%
• actual data is 0.9% according to the latest press release

if actual > forecast (or previous data) = good for currency (for USD in our case)

[USD - Retail Sales] = Change in the total value of sales at the retail level. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

==========

U.S. Retail Sales Rebound Less Than Expected In March

After reporting lower U.S. retail sales for three straight months, the Commerce Department released a report on Tuesday showing that sales rebounded in the month of March.

The Commerce Department said retail sales climbed by 0.9 percent in March following a revised 0.5 percent decrease in February.

However, economists had been expecting sales to surge up by 1.1 percent compared to the 0.6 percent drop originally reported for the previous month.

Excluding a jump in sales by motor vehicle and parts dealers, retail sales rose by 0.4 percent in March after coming in unchanged in February. Ex-auto sales had been expected to rise by 0.6 percent.

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newdigital, 2015.04.14 17:24

EUR/USD falls to lowest level in three weeks (based on dailyfx article)

• EUR/USD broke below the 78.6% retracement of the late-March range yesterday
• While below 1.0830 our near-term trend bias is lower in the euro
• The 127% extension of the 2005-2008 adavance around 1.0440 looks to be the next major pivot for the rate
• A minor turn window is eyed around the end of the week
• Interim resistance is seen around 1.0685, but only a move through 1.0830 would turn us positive on the single currency

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EURUSD Technical Analysis 2015, 12.04 - 19.04: Bearish Breakdown with 1.0461 Next Key Support Level

newdigital, 2015.04.14 19:49

Why bearish (downtrend) for EURUSD D1 timeframe? Well ... do you see Senkou Span A line?

• So, if the price is below this line - bearish/downtrend,
  
• if above this line - bullish/uptrend

This is primary trend. It means that we may see the secondary trend within this primary. Secondary trend is market rally (local uptrend during the primary bearish, and correction (local downtrend during the primary bullish, flat, ranging etc

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EURUSD Technical Analysis 2015, 12.04 - 19.04: Bearish Breakdown with 1.0461 Next Key Support Level

newdigital, 2015.04.14 20:03

As we see from the image above we are having the following (for D1 timeframe):

• primary bearish (general downtrend) - price is below Senkou Span A line
• nearest support is 1.0520 (we see it from the image above)
• nearest resistance levels are 1.0954 and 1.1038
• Chinkou Span line is very near to be cross the price deom below to above (we see it from the image above). If this line will cross the price on close bar (D1 close bar in our case) so it will be breakout of the price movement.

Thus, we may have the following scenarios:

- If D1 price will break 1.0520 support level so the primary bearish breakdown will be continuing up to the new low forming
- If D1 price will break 1.0954 and especially 1.1034 resistance level together with Chinkou Span crossing the price from below to above so we may see good breakout with the reversal of the price from primary bearish to the primary bullish with secondary ranging (it will be ranging because the price will be inside Ichimoku cloud in this case)
- If not so the price will be moved between 1.0520 support and 1.0954 resistance

Please note that those support/resistance levels are dynamic ones (it means that we may see the other levels next days as a next high or next low for example).

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newdigital, 2015.04.15 09:10

Trading The ECB: Possible EUR/USD Reactions (based on efxnews article)

• Starting with the ECB rate decision, TD's base case is that rates will be left unchanged with no significant EUR/USD reaction.
• Moving to the open statement, TD's base case (80% chance) is that there will be little to change here and EUR/USD will likely be capped by 1.0715 (minor short-term fibo and double top neckline trigger).
• If the ECB upgrades growth risks to "almost balanced" (5% chance), TD sees EUR/USD likely breaking above 1.0715 and moves to around 1.08.
• On the other hand, if the ECB language downplays most improvements as far too early to suggest anything (15% chance), TD sees EUR/USD drifting lower but likely unable to break the 13 April low of 1.0521.
• Finally, on the ECB Q&E, TD's base case is that Draghi will stick to a cautiously optimistic tone, continuing to reinforce the mantra that the ECB assumes full implementation and will not run out of bonds to buy and has seen nothing in market liquidity to suggest an issue, providing no real answer on questions regarding Greece. Under this scenario, TD sees EUR/USD likely grinding slightly lower, but unable to break the 13 April low of 1.0521.

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newdigital, 2015.04.15 13:35

Dovish ECB to Fuel Bearish EUR/USD Outlook- 1.0500 in Focus (based on dailyfx article)

Trading the News: European Central Bank (ECB) Interest Rate Decision

The fresh batch of rhetoric coming out of the European Central Bank (ECB) may heighten the bearish sentiment surrounding the EUR/USD should President Mario Draghi endorse a dovish outlook for monetary policy

However, we may see growing speculation for a ‘taper tantrum’ in the euro-area should Mr. Draghi adopt a more upbeat tone for the region and talk down expectations for more non-standard measures as the recent developments coming out of the monetary union beat market forecasts.

Nevertheless, we may get more of the same from the ECB amid the series of positive data prints coming out of the euro-area, and the single-currency may face a more meaningful correction over the near-term should the central bank implement a more hawkish twist to the forward-guidance for monetary policy.

Bearish EUR Trade: ECB Stays on Course & Talks Down ‘Taper Tantrum’

• Need red, five-minute candle following the policy announcement to consider a short EUR/USD trade.
• If market reaction favors a bearish Euro trade, sell EUR/USD with two separate position.
• Set stop at the near-by swing high/reasonable distance from cost; need at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is met, set reasonable limit.

Bullish EUR Trade: Governing Council Adopts Improved Outlook

• Need green, five-minute candle to favor a long EUR/USD trade.
• Implement same strategy as the bearish euro trade, just in the opposite direction.

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newdigital, 2015.04.15 17:13

EURUSD ECB Support and Resistance Update (based on dailyfx article)

• EURUSD opens in a range despite News
• Range resistance it’s at 1.0702
• A break below S4 support has bearish implications

The EURUSD has opened the day moving towards support in early London trading. However, despite the ECB holding its banking rate announcement today, the pair has yet to breakout. Currently price is found near range support at the S3 Camarilla pivot near 1.0606. In the event that price remains supported, traders will begin to look for a bounce in price towards levels of resistance, including the R3 pivot found today at a price of 1.0702.



Despite price opening inside of a 96 pip range, statements from the ECB still have the ability to progress price to a breakout point. A EURUSD decline below the S4 pivot at 1.0557 would suggest a return to USD strength and raise the possibility of the creation of future lower lows. Conversely, if price moves back through its trading range, and breaches the R4 pivot at 1.0751, this would open the market for a potentially broader bullish move.