EURUSD Technical Analysis 2015, 19.07 - 26.07: bearish breakdown

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Sergey Golubev, 2015.07.19 18:33

Morgan Stanley - Outlooks For The Coming Week (based on efxnews article)

EUR: Bearish

• Weekly price is on primary bearish market condition located below Ichimoku cloud for trying to break key support level for the bearish to be continuing.
• Price is located below 100 SMA and below 200 SMA for the primary bearish.
• The data of AbsoluteStrength indicator and Trend Strength indicator are in contradiction with each other for ranging market condition
  
• "With uncertainty regarding Greece diminished, we believe that investors will feel more comfortable reinitiating EUR shorts, as evidenced by the latest break in EURUSD below the 100 DMA. Draghi has reiterated that the ECB stands ready to act if needed, which could be enough to weigh on EUR, particularly if it supports equities, given the inverse relationship between European stocks and EUR."

JPY: Bullish

• Weekly price is located far above Ichimoku cloud for the primary bullish market condition to be continuing.
• Price is located above 100 SMA and above 200 SMA for the bullish trend.
• The values of Absolute Strength indicator are estimating the secondary ranging which is going between 119.25 support and 125.85 resistance levels.
  
• "We expect JPY weakness to reverse, and maintain our bullish view, despite the recent pick-up in equity markets. Recent data from Japanese pension funds point to the reallocation process being largely complete, suggesting that foreign outflows from Japan could slow."

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Sergey Golubev, 2015.07.17 18:38

Forex Weekly Outlook July 20-24 (based on forexcrunch article)

A Greek deal was finally reached, but it didn’t help the euro. In general, the dollar enjoyed broad gains. The upcoming week features housing figures in the US as well as important events for the antipodean currencies. Here are the highlights of this week. Here is an outlook on these main events.

An “aGreekment” was reached in the early hours of Monday with a Greek capitulation on austerity after Grexit was put on the table. We are seeing signs of a return to normality but with so much bad blood, nobody is really happy and the euro is lower. The crisis could take a break before making a comeback.  Elsewhere, the dollar saw mixed numbers, with poor retail sales weighing. However, some better numbers and with a repeat of Yellen’s intention to raise rates this year, the dollar emerged as a winner especially against commodity currencies. USD/CAD touched 1.30, AUD/USD reached new lows despite OK Chinese GDP and  NZD/USD fell below the post crisis low. The only currency that beat the dollar quite nicely is the pound, thanks to hawkish comments by Carney. What’s next? Let’s start:

1. Glenn Stevens speaks: Wednesday, 3:05. Reserve Bank governor Glenn Stevens is scheduled to speak in Sydney. He may talk about the recent RBA’s recent decision to maintain rates at 2% as well as their intention to provide further easing measures, to boost recovery including another rate cut. Australia’s economic growth was weaker than forecast but is expected to rebound in the next two years. Stevens stated the RBA will monitor data and act accordingly. Will Stevens hit the Aussie when it’s down?
2. Existing Home Sales: Wednesday, 14:00. Sales of existing homes, aka second hand homes are the vast majority of the market. After reaching a level of 5.35 million (annualized)  in May, another advance to 5.41 million is on the cards. The Fed watches the housing sector, which goes hand in hand with economic cycles.
3. New Zealand rate decision: Wednesday, 21:00. New Zealand central bank cut interest rates for the first time in four years, reaching 3.25% protect the export-reliant economy from deflation risks. Despite four successive rate increases ending in July 2014 and satisfactory annual growth of 3%, the Central Bank decided to cut rates as milk prices slid more than 50% and demand from China softened. Economists expect, at least one more cut before the end of the year.
4. US Unemployment Claims: Thursday, 12:30. The number new applications for unemployment benefits declined more than expected last week, reaching 281,000. Economists expected an addition of 274,000 claims. The 15,000 decline indicates the US labor market is strong enough to support an interest rate hike this year despite a lingering weakness in the manufacturing sector. The four-week moving average of claims increased 3,250 to 282,500 last week. The four-week measure remained below the 300,000 line for the 16th straight week. The number of claims is expected to reach 285,000 this week.
5. Chinese Markit Flash Manufacturing PMI: Friday, 1:45. This independent measure of the Chinese economy could shed a better light on what’s going on there, after the positive GDP, which comes from the government. After a final score of 49.4 points in June, a small rise to 49.8  is expected, just below the 50 point mark separating growth from contraction.
6. New Home Sales: Friday, 14:00. While sales of new homes are only a small part of transactions, every sale has a wider impact on infrastructure and additional spending. After hitting a high of 546K back in May, a small slide to 541K is on the cards now.

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EURUSD Technical Analysis 2015, 19.07 - 26.07: bearish breakdown

Sergey Golubev, 2015.07.20 13:43

This is interesting situation on M5 timeframe: the price was reversed to the bullush condition and it was stopped by 1.0844 resistance level. The next target (for buy stop order placing) is 1.0859 :

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Sergey Golubev, 2015.07.20 17:52

Fundamental Reasons to Sell EUR - Credit Agricole (based on efxnews article)

Credit Agricole suggested to sell for EUR just because of the following:

1. "The EUR has been under pressure regardless of the Greek parliament voting in favour of the agreed bailout package. Even if all measures are implemented successfully it still appears questionable whether debt-sustainability can be achieved. From that angle Greece-related uncertainty is likely to continue for longer."
2. "ECB President Draghi reiterated anew that QE will run its course regardless of stabilising growth and price developments."
   
3. "In terms of data, this week’s focus will be on July PMIs."
4. "We expect the single currency to stay subject to downside risk. This is especially true when considering that speculative positioning is close to neutral territory, which suggests limited position-squaringrelated upside risk."

From the technical point of view, the next target for EURUSD is 1.0461 after crossing 1.0818 resistance level so the fundamental expectations of  Credit Agricole are more than real ones in this situation for example.