EURUSD Technical Analysis 2015, 26.04 - 03.05 This is key week - Brearish or Bullish?

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newdigital, 2015.04.24 05:52

EUR/USD, USD/JPY - Goldman Sachs (based on fxnews article)

Goldman Sachs updates its outlook on EUR/USD and USD/JPY noticing that the latest messages form the ECB and BoJ seem to be 'lost in translation'. The following are the key points in GS' note along with its latest forecasts for EUR/USD and USD/JPY.

1- "When central banks are implementing QE – as the ECB and Bank of Japan clearly are – they deliver two basic messages. First, they comment on whether the current pace of asset purchases is still appropriate and, when it isn’t, they provide more accommodation, as the BoJ did in October. Second, because QE is controversial, they sing the praises of asset purchases, pointing to rising inflation expectations and an improving growth picture," GS argues.

2- "We think this is what happened towards the end of the ECB press conference on Apr. 15, when President Draghi made favorable comments on the inflation and growth picture. The market heard exit, but in our view this is a clear case of “lost in translation." GS adds.

3- "After all, President Draghi earlier in the press conference argued forcefully that focus on early exit is premature and that having this debate now is like “quitting a marathon after 1k.” Our European economists continue to expect “full implementation” of ECB QE, meaning an unchanged pace of asset purchases through at least Sep. 2016. This is key to our view that a cyclical recovery in the Euro zone is not a force for EUR/USD higher," GS clarifies.

4- "There was more “lost in translation” in Governor Kuroda’s speech on Apr. 19. The market picked up headlines that “the underlying trend of inflation has improved markedly,” but the more important message in the speech, in our opinion, is that low inflation momentum is threatening to pull inflation expectations lower (Exhibit 4), which will then set the stage for additional monetary easing," GS notes.

5 "Our Japan Chief Economist forecasts additional stimulus for July by way of duration extension of JGB purchases (akin to "Operation Twist" in the US). Given how small speculative long $/JPY positioning now is, we think there is room for the market to catch up with real story in Japan, which is that another round of monetary easing is coming," GS adds. 

GS targets EUR/USD at 1.00 in 6-months and USD/JPY at 125 over the same end of period.

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newdigital, 2015.04.25 09:17

The Biggest EURUSD Resistance Test of the Year ( based on dailyfx article)

“EURUSD rolled over at slope resistance but several longer term technical observations are worthy of note; the rate found low at an important long term level (line off of 2008 and 2010 lows) and the ownership profile (as per COT) is at a record. The speculative crowd has never been more bearish…ever. Such conditions typically precede important reversals…although not necessarily right away. A break above the resistance lines (old support) would indicate that behavior has significantly changed and open up a run on 1.13.” It is decision time traders.

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newdigital, 2015.04.26 13:01

EURUSD forecast for the week of April 27, 2015, Technical Analysis (based on fxempire article)

The EURUSD pair initially fell during the course of the week but found enough support to turn things back around and form a hammer. However, we recognize that the 1.10 level above is still resistive, so therefore it’s difficult to take a longer-term trade. In fact, we are comfortable with longer-term trades until we are well above the 1.15 level, which is something that we are obviously not going to see anytime soon. With that, we remain on the sidelines as far as long-term trades are concerned, but will pay attention to the shorter-term daily chart.

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newdigital, 2015.04.26 17:12

Forex - Weekly outlook: April 27- May 1 (based on investing.com article)

The dollar ended the week lower against the other major currencies on Friday, the second consecutive weekly decline as fresh economic data underlined concerns that the recovery is losing momentum.

The Commerce Department reported Friday that orders for durable goods, excluding aircraft, fell 0.5% in March, after a downwardly revised 2.2% drop in February.

The headline figure rose 4.0%, beating expectations for a 0.6% gain, but investors focused on underlying weakness in the report.

The data came after recent weak reports on home sales, retail sales and industrial production, adding to signs of a slowdown in economic growth since the start of the year.

The weak data added to pressure on the dollar which has been hit as investors pushed back expectations on the timing of an initial rate hike by the Federal Reserve.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down to 97.07 late Friday. The index ended the week down 0.62%.

EUR/USD was up 0.48% to 1.0874 in late trade, to end the week with gains of 0.61%.

The single currency was held in check as concerns over Greece’s debt negotiations continued. Euro area finance ministers said Friday that Greece must present a full economic reform plan by early May in order to access any further funding.

The dollar was also lower against the yen, with USD/JPY down 0.51% to one-week lows of 118.98.

Sterling also pushed higher against the weaker dollar, with GBP/USD adding 0.88% to trade at 1.5188 late Friday. The pound shrugged off uncertainty over the outcome next month’s U.K. general elections.

In the week ahead investors will be looking to Wednesday’s Fed statement for clues on the possible timing of a rate increase. Investors will also be focusing on Wednesday’s preliminary reading on U.S. first quarter growth as well as reports on inflation, consumer confidence and manufacturing.

Central bank meetings in Japan and New Zealand will also be in focus, as will Thursday's preliminary data on euro zone inflation.

Monday, April 27

• Markets in New Zealand will remain closed for a holiday.
• The U.K. is to release private sector data on industrial order expectations.

Tuesday, April 28

• Reserve Bank of Australia Governor Glenn Stevens is to speak at an event in Sydney.
• Japan is to release data on retail sales.
• The U.K. is to publish preliminary data on first quarter economic growth.
• Bank of Canada Governor Stephen Poloz is to speak at an event in Ottawa.
• Later Tuesday, the U.S. is to release private sector data on consumer confidence.

Wednesday, April 29

• New Zealand is to produce reports on the trade balance and business confidence.
• Markets in Japan are to remain closed for a holiday.
• In the euro area, German y is to release preliminary data on consumer inflation.
• The U.K. is to release a private sector report on retail sales.
• The U.S. is to publish preliminary data on first quarter economic growth in addition to a report on pending home sales.
• Later in the day the Federal Reserve is to announce its monetary policy decision and publish its rate statement.

Thursday, April 30

• The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement. New Zealand is also to release data on building consents.
• Japan is to release preliminary data on industrial production. The Bank of Japan is to announce its monetary policy decision and release its rate statement. The announcement is to be followed by a press conference.
• Germany is to report on retail sales and unemployment, while Spain is to release data on inflation and economic growth. The euro zone is also to release preliminary data on consumer prices and the unemployment rate.
• Later in the data Canada is to publish its monthly report on economic growth.
• The U.S. is to publish data on initial jobless claims.

Friday, May 1

• Japan is to release a string of reports on inflation, household spending, average earnings and unemployment.
• Markets in China are to remain closed for a holiday. Beijing is still to release data on manufacturing and service sector activity.
• Australia is to release data on producer price inflation.
• In Europe markets in France, Italy, Germany and Switzerland are to remain shut for holidays. Meanwhile, the U.K. is to release data on manufacturing activity.
• The U.S. is to round up the week with a report for the Institute of Supply Management on Manufacturing activity and revised data on consumer sentiment.

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newdigital, 2015.04.26 17:30

EUR/USD Forecast Apr. 27 – May 1 (based on forexcrunch article)

EUR/USD had a choppy week, feeling some pressure but not falling too far. Inflation data stands out just before the May 1st holiday. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Greek headlines drifted between deteriorating conditions and Grexit talk to optimism or at least a deadline delay. This had a growing impact on the common currency. For a change, most euro-zone figures fell short of expectations and that also took its toll. In the US, data began looking better, with existing home sales beating expectations. But it’s far from looking rosy and as the week advanced, the dollar was hit by weak data. All in all, it’s a mixed picture with quite a lot of action.

1. German Import Prices: Wednesday, 6:00. Prices of imported goods also feed into inflation calculations and are impacted by the exchange rate. A surprising jump of 1.4% was seen in February. Another rise of 0.4% could be seen now
2. German CPI: Wednesday, state data released during the morning with the all-German read coming at 12:00. The largest economy in the euro-zone saw prices rising by 0.5% in March, a second consecutive beat of expectations. A drop of 0.1% is expected in the early release for April.
3. ECB monetary data: Wednesday, 8:00. The European Central Bank has made a lot of efforts to pump money, and this is bearing fruit. The annual rise in the M3 Money Supply stands at 4%, after long months of a very slow rise in the amount of money in circulation. 4.3% is predicted now  Private loans are still contracting on a y/y basis, at 0.1% in February. The figures for March are expected to show an improvement, especially on the background of QE implementation with an annual rise of 0.2%.
4. French Consumer Spending: Thursday, 6:45. The zone’s second largest economy has enjoyed 4 consecutive months of growing spending by consumers, but the figure for February fell short of predictions by rising only +0.1%. A drop of 0.5% is on the cards now.
5. Spanish Flash GDP: Thursday, 7:00. As one of the first countries that releases in GDP data, this will be closely watched. The country enjoyed a strong growth rate of 0.7% q/q in the last quarter of 2014. According to government officials, growth could even be stronger now: 0.8%.
6. Spanish Flash CPI: Thursday, 7:00. Growth is partially built on a fall in prices. The zone’s fourth largest economy suffered from one of the worst levels of deflation, but this seems to be waning off. For March, a fall of 0.7% was seen in CPI. The same annual drop in prices is expected in the preliminary number for April.
7. German Unemployment Change: Thursday, 7:55. Germany enjoyed many months of drops in the number of unemployed. In February, Germany saw a drop of 15K and the unemployment rate stood on 6.5%. Another similar drop is on the cards: -14K.
8. ECB Economic Bulletin: Thursday, 8:00. The data in this report is what the governing council of the central bank sees before making its monetary decisions. In the April rate decision, no policy change was announced and Draghi shrugged off talk about QE tapering despite the economic improvement. This could give some more insight into the current conditions.
9. Inflation data: Thursday, 9:00. The euro-zone remained in deflation in March, with a drop of 0.1% in prices, but this was better than expected. Core inflation stood on 0.6% and showed that the underlying weakness – it is not only oil prices. Headline CPI carries expectations for a flat 0% while core CPI is expected to stand at 0.6% once again.
10. Unemployment Rate: Friday, Thursday, 9:00. After a few signs of falls in unemployment, the situation isn’t too good. At 11.3%, the old continent has a long way to go. A small drop is on the cards now for March, to 11.2%.

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newdigital, 2015.04.27 14:26

A Goldman Sachs EUR/USD Elliot Wave view (based on forexlive article)

"The market came close to testing 1.0911-1.0914 - 76.4% retrace of the Apr. 6th/13th drop and 76.4% of the swing target from Apr. 13th:

• The break opens topside risks to 1.0988-1.10 which includes the full extension from Apr. 13th and the trend across the highs since Mar. 18th.
• While it's still possible that this is wave ii of a v wave from the Apr. 6th high, it's also worth considering whether this is a broader, extended version of a triangle that started in mid-March (perhaps we were pre-mature in chasing the break-out?).
• If this is true, would really need a break below the Mar. 15th/Apr. 13th trendline (triangle support) to confirm that the next leg lower is taking place. This comes in all the way down at 1.0548."

"If this is truly a wider/extended triangle, then it suits the underlying view that there is still one last leg lower to complete the 5-wave decline

• Taking a 1.618 extension target from the May '14 high and projecting it off of current levels implies that wave 5 could go roughly to ~1.01.
  
• At the same time, this might also mean that there is room to see further sideways/choppy price action.
• It is however worth highlighting that the 55-dma is now at 1.0947 and hasn't been broken (on a daily close basis) since May '14 (at the start of the downtrend).
  
• The other thing to note is that daily oscillators are near to the top of their recent range (implying potential for an imminent turn)."
  

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newdigital, 2015.04.28 14:12

EUR/USD Testing Resistance (based on investing.com article)

EURUSD: Seeking the high 1.09s before down. The near-term grind higher is still on; now testing resistance at the low end of the descending 55 day exponentially weighted moving average band (1.09151.1035). While short-term dynamic support at the flat "Kijun-Sen" (1.0775) remains intact additional gains into the high-1.09s is the best fit. but once there look for near-term bearish signals to take advantage of. Current intraday stretches are located at 1.0790 and 1.0955.

Spot gold: On the lookout for a +$1,211 break. The biggest single-day gainer since late Jan must count for something.It now looks quite clear that the decline from the early Apr high of 1,224 is, or rather was,a correctional descent. All that is needed now is a +1.211 break to confirm this and to allow extension to and through resistance at 1,22426. A short-term "Equality point" hints that 1.257 is the next attraction/resistance to align aim at. Current intraday stretches are located at 1,185 and 1,209.

Brent Crude: Could recheck the $62-level before. The short-term bullish wave structure remains incomplete though it is still valid. If the recent sellers' response leads to near-term bearish initiative below mid-body support at 63.90; pencil in decline closer to dynamic support, now starting at 62.00. A sub-60.70 overlap is however not ideally wished for since it would complicate the wave count more.

S&P500: Bearish print on top. The short-term "equality point" at 2,121 held buyers at bay with sellers' response being strong there. The bearish print as a result points lower near-term (with short-term momentum indicators running at rich levels indicating an overstretch) and the ascending 8 day "Tenkan-Sen", now at 2,092, could be retested - but a buyers' response there (or no later than at 2,080) is likely. Current intraday stretches are located at 2,090 and 2,121.

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newdigital, 2015.04.29 08:36

EUR/USD Forecast April 29, 2015, Technical Analysis (based on fxempire article)

The EUR/USD pair broke higher during the course of the session on Tuesday, heading towards the 1.10 level. This is an area that we should see quite a bit of resistance at, and with the Federal Reserve having its interest-rate announcement and more importantly, the interest rate statement during the session today, it’s very likely that we will have a catalyst for the next move in this pair. Because of this, we believe that it’s only a matter of time before the sellers step in, but we recognize that a move above the 1.12 level would change everything. It is very possible that we get some type of extraordinary move during the session. We believe this move will dictate where the market goes next.

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newdigital, 2015.04.29 14:48

• past data is 2.2%
• forecast data is 1.1%
• actual data is 0.2% according to the latest press release

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

[USD - GDP] = Annualized change in the inflation-adjusted value of all goods and services produced by the economy. It's the broadest measure of economic activity and the primary gauge of the economy's health.

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"Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 0.2 percent in the first quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis.  In the fourth quarter, real GDP increased 2.2 percent.

The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 5).  The "second" estimate for the first quarter, based on more complete data, will be released on May 29, 2015.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE) and private inventory investment that were partly offset by negative contributions from exports, nonresidential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased."