Skandinaviska Enskilda Banken: Outlooks For EUR/USD, USD/JPY, AUD/USD, SP500

Forum on trading, automated trading systems and testing trading strategies

Press review

Sergey Golubev, 2015.08.02 08:34

Forex Weekly Outlook August 3-7 (based on forexcrunch article)

US ISM Manufacturing PMI, Trade Balance, ISM Non-Manufacturing PMI, Rate decision in Japan, Employment data from New Zealand, Canada and the US, including the all-important NFP report. Join us as we explore this week’s market movers.

Last week the FOMC issued its rate statement reaffirming that the US economy continues to strengthen, leaving the door open for a possible interest rate hike in September. Policymakers noted the economy has rebounded from the slowdown, despite a downturn in the energy sector. The Fed also stated that the employment market saw solid gains in recent months, suggesting continued jobs growth. The Fed maintained its rates unchanged and noted the labor market needs to advance “some” more and inflation has to rise towards the 2% medium-term target, before the Fed decides to raise rates. Will we see a rate hike in September?

1. US ISM Manufacturing PMI: Monday, 14:00. Manufacturing activity in the U.S. advanced more than expected in June, reaching 53.5 compared to 52.8 posted in May. The positive reading was in line with the Fed’s plans to raise interest rate this year. The new orders index edged up to 56.0, from 55.8 in the prior month, while the employment index rose to 55.5 from 51.7 in May, showing stronger employment levels. Analysts expect PMI to reach 53.6 this time.
2. Australian rate decision: Tuesday, 4:30. Australia’s central bank left interest rates at a record low of 2% in July reflecting stability in  monetary policy. The Central Bank stated that a lower currency was needed to help achieve balanced growth. Subdued spending as well as strong currency prevent achieving balanced growth. Furthermore the recent volatility in Chinese equity markets, could badly effect Australia’s economic outlook. No change in rates is expected now.
3. NZ employment data: Tuesday. 22:45. The Reserve Bank of New Zealand cut rates in July amid gloomy economic data. Inflation softened more than expected and the unemployment remained stubbornly high at 5.8%. Job growth also moderated, rising 0.7% in the first quarter adding 16,000 positions compared to 1.2% expansion in the last quarter of 2014. New Zealand employment market is expected to grow by 0.5%, while the Unemployment rate is expected to rise to 5.9%.
4. US ADP Non-Farm Employment Change: Wednesday, 12:15. U.S. private sector employment expanded at the fastest rate in six months with a 237,000 jobs addition in June. The strong employment market together with other promising economic data such as the rise in the housing sector, the improvement in consumer spending and the pick up in factory activity, show the US economy is back to solid growth, backing views that a rate hike is on the way. US jobs market is expected to add ,000 positions in July.
5. US Trade Balance: Wednesday, 12:30. The U.S. trade deficit widened in May amid weaker exports, reaching $41.9 billion from the $40.7 billion registered in the previous month. Economists expected a bigger deficit of $42.5 billion. Exports declined 0.8% due to lower demand for commercial aircraft and industrial equipment. However strong domestic demand increased imports mainly in automobiles. U.S. trade deficit is expected to grow further to 42.2 billion.
6. US ISM Non-Manufacturing PMI: Wednesday, 12:30. ISM’s non-manufacturing report showed a solid gain in June, the composite index rose to 56.0 from 55.7 in May. New orders advanced to 58.3 compared to 57.9 in May. Export orders moderated but still remained over 50 at 52.0. Business activity edged up 2 points to 61.5, but employment slowed to 52.7 from 55 in May. Despite the positive rise, the PMI services index shows lack of growth at the end of the second quarter.
7. Australian employment data: Thursday, 1:30. Australia’s unemployment rate remained at 6% in June, while the economy added 7,300 jobs. Economists expected the unemployment rate to rise to 6.1% and forecasted a 2,100 jobs contraction. The participation rate, which refers to the number of people either employed or are actively looking for work, remained steady at 64.8%. However, despite the positive readings, policymakers are concerned about the persistent rise in the unemployment rate following the crush of the mining sector. Australia’s economy is expected to gain10,100 jobs, while the unemployment rate is expected to rise to 6.1%.
8. UK rate decision: Thursday, 11:00. The Bank of England kept rates on hold for more than six years and is not expecting to raise them until next year. Economists see no reason to hike rates since inflation pressures are near record lows. However, Governor Mark Carney noted that inflation was expected to pick up markedly towards the end of the year. The Bank also left its monetary stimulus program, at £375 billion. The Bank of England is not expected to change rates this time.
9. US Unemployment Claims: Thursday, 12:30. The number new claims for unemployment benefits increased less than expected last week, reaffirms that the US labor market continues to strengthen. The number of jobless claims rose by 12,000 to a seasonally adjusted 267,000. Analysts expected initial claims to reach 268,000. Meanwhile the four-week moving average declined by 3,750 claims to 274,750. Continuing jobless claims rose by 46,000 to a seasonally adjusted 2,26 million during the week ending July 18. The four-week moving average fell by 750 to 2,255,250. The number of jobless claims is expected to reach 269,000 this week.
10. Japan rate decision: Friday. The central bank of Japan lowered its growth forecast for fiscal 2015 to 1.7% from an earlier estimate of 2.0%. Bank of Japan Gov. Haruhiko Kuroda voiced his concerns over the slumping stock prices in China and its economic  downturn effect on Japan. Chinese share prices tumbled more than 30% in a few weeks. Furthermore, Chinese economy has shifted its focus from exports to domestic demand, reducing trade volumes in Asia. The BOJ may have to downgrade its growth forecast once again if China’s economy slows further.
11. Canadian employment data: Friday, 12:30. The Canadian employment market contracted by 6,400 jobs in June amid losses in part-time jobs. The unemployment rate was maintained at 6.8%. Economists expected a higher loss of 9,000 jobs. Full time positions increased by a solid 64,800, however, part-time positions declined by 71,200 in June. The Central Bank cut rates by 0.25% in July after a former cut in January in an attempt to spur economic growth.
12. US Non-Farm Employment Change and Unemployment rate: Friday, 12:30. US jobs report for June showed another modest growth of 223,000 positions, after a solid gain of 280,000. Economists expected a higher increase of 231,000. Meanwhile, the unemployment rate ticked down to 5.3% from 5.5% in May. June’s report is strong enough to support the Fed’s rate hike plan, indicating the labor market continues to expand. US labor market is expected to add 225,000 jobs in July and the unemployment rate is forecasted to remain unchanged at 5.3%.

Forum on trading, automated trading systems and testing trading strategies

Press review

Sergey Golubev, 2015.08.03 19:39

Deutsche Bank - Get Ready For An August-October 'Jump' In USD/JPY (based on efxnews article)

Deutsche Bank made a forecast for USDJPY for August-October 2015 and for 2016:

• August-October 2015
  "We believe the USD/JPY could jump to a ¥125-128 level over the next few months in reflection of robust US economic indicators."
  
• 2016
  "We expect the USD/JPY to strengthen in August-October and edge upward to only around ¥130 throughout 2016."

Let's evaluate this situation using Pivot Points and s/r levels.

1. S/R levels
   If we look at USDJPY W1 timeframe so we see the price broke symmetric pattern from below to above with 125.85 as the nearest resistance level, and it is located for now between 120.40 support and 125.85 resistance.
2. Pivot Points
   The price is located to be above yearly Central Pivot at 114.36 and below R1 Pivot at 127.96. It means the bullish market condition with secondary ranging.

Instrument	S1 Pivot	Yearly PP	R1 Pivot	R2 Pivot
USD/JPY	106.88	114.36	127.96	135.22

If we summarize above mentioned data so we can understand the following: the price is on primary bullish condition with the nearest target as 125.85. The next target is R1 Pivot at 127.96, and we may expect for this next target to be broken by the end of this year for example.

As to 2016 so it may be much easier - R2 Pivot level is located at 135.22, and it will be the next target in 2016 if the price will break 127.96 by the end of this year.

Thus, the forecast of Deutsche Bank was confirmed: ¥125-128 during August-October 2015, and around ¥130 in 2016.

Forum on trading, automated trading systems and testing trading strategies

Press review

Sergey Golubev, 2015.08.04 09:54

2015-08-04 05:30 GMT (or 07:30 MQ MT5 time) | [AUD - Cash Rate and RBA Rate Statement]

• past data is 2.00%
• forecast data is 2.00%
• actual data is 2.00% according to the latest press release

if hawkish > expected = good for currency (for AUD in our case)

More hawkish than expected = Good for currency

[AUD - Cash Rate and RBA Rate Statement] = Interest rate charged on overnight loans between financial intermediaries. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future. RBA Rate Statement is among the primary tools the RBA Reserve Bank Board uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

==========

"The Federal Reserve is expected to start increasing its policy rate later this year, but some other major central banks are continuing to ease policy. Hence, global financial conditions remain very accommodative. Despite fluctuations in markets associated with the respective developments in China and Greece, long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low."

"The Board today judged that leaving the cash rate unchanged was appropriate at this meeting. Further information on economic and financial conditions to be received over the period ahead will inform the Board's ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target."

==========

AUDUSD M5: 94 pips price movement by AUD - Cash Rate news event :