Technical Pattern Analysis for US Dollar, S&P 500, Gold and Crude Oil - Near-term resistance for Gold is at 1232.30, the May 18 high.

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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, 2015.05.25 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."

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Sergey Golubev, 2015.05.26 06:12

Sell AUD/USD At S/T Resistance; Sell EUR/USD At Breakout Zone - Credit Suisse (based on efxnews article)

Credit Suisse looked at the technical setups for AUD/USD, and EUR/USD where CS is bearish near-term, and recommends selling limit-orders on approaching specific technical levels.

AUDUSD

Starting with AUD/USD, CS notes that the immediate focus turns towards a cluster of supports at .7790/74.

"AUDUSD has reversed its early gains, completing a bearish “outside” session to weigh on a cluster of supports at .7790/74 - the early May low, 61.8% retracement and 55-day average support – where we would expect fresh buying to show here". "A direct break lower though can trigger further selling for .7683 initially, followed by a stronger support from the range lows at .7555/33. Near-term resistance moves lower to .7861/67, followed by .7936. Above can target .7976/86 and then .8030/63 which we look to ideally cap".

CS runs a limit order to sell AUD/USD at 0.7855, targeting a move to 0.7605.

EURUSD

"We look for further weakness here to test the 55-day average at 1.0918 at first, through which can aim at the 61.8% retracement level at 1.0849/43, followed by the low end of the former range at 1.0660/14". "Near-term resistance moves to 1.1062, then 1.1101 with price and “neckline” resistance at 1.1208/48 expected to cap to keep the trend lower. Strategy: Flat. Sell at 1.1060, stop above 1.1248 for 1.0525".

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Sergey Golubev, 2015.05.26 20:04

Tech Setups For EUR/USD, USD/JPY, GBP/USD, AUD/USD - Barclays (adapted from efxnews article)

The following are the latest technical setups for EUR/USD, USD/JPY, GBP/USD, and AUD/USD as provided by the technical strategy team at Barclays Capital.

EUR/USD: Our bearish view was encouraged by the close below former range highs near 1.1055. We are looking for a move lower towards targets near 1.0850 and then the 1.0660 area. Our greater targets are towards 1.0460. 1.1055 reverts to resistance.

USD/JPY: The break above the 122.05 highs confirms our bullish view and completion of the six-month range trade. Our greater upside targets are in the 124.15 area.

GBP/USD: Last Friday’s bearish engulfing candle and the subsequent move through 1.5445 signals a squeeze lower towards our targets near 1.5335. Breaking below there would signal deeper setback towards 1.5130, the 50-dma.

AUD/USD: Last week’s bearish engulfing candle encourages our bearish view. A close below our initial downside targets near 0.7790 would signal lower towards 0.7680.