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EURUSD M5: 46 pips price movement by Spanish CPI news event :
AUDIO - Weekend Edition with John Tamny
Political Economy editor at Forbes, John Tamny joins John O’Donnell and Merlin Rothfeld for a look at how the government is slowing Economic Growth, and wasting our money. The trio discuss government spending, the dollar and the healthy justification for recessions.
Bank of America says the euro is still going to plunge to parity with the dollar (based on businessinsider article)
Bank of America Merrill Lynch's latest forecast for the euro suggests it's still going to get a lot weaker against the dollar, despite a recent uptick.
BAML's researchers are saying the euro will reach parity (where one euro is equal to one dollar) by the end of the year. That's despite the fact that the euro's plunge has stalled, and even reversed a little.
Here's their forecast in Green:
The euro slumped from nearly $1.40 during the middle of last year to $1.0484 on March 15. It's since risen, and currently sits above $1.08.
Here's Bank of America's justification for another big decline:
"Beyond the short-term, we would expect divergence of monetary policies to continue weighing on the Euro. The ECB has announced optimistic macro projections, which we see as targets, justifying QE at least until September 2016, even if data improves further. Whether EUR/USD weakens well below current levels will depend to a large extent on whether the market starts expecting QE2 by the ECB next year. It is too early to make this call, but our economists believe that ECB QE 2 is more likely than not based on their inflation projections."
The basic thesis is that the Fed will be hiking US interest rates in the months and years ahead, which will drive demand for dollars, since investors will be able to make more on their dollar-denominated investments. The opposite is true for Europe, where the European Central Bank's QE programme suggests it's trying to keep interest rates as low as possible for at least 18 months.
if actual > forecast (or previous data) = good for currency (for NZD in our case)
[NZD - Building Permits] = Change in the number of new building approvals issued. It's a leading gauge of future construction activity because obtaining government approval is among the first steps in constructing a new building. Construction is important because it produces a wide-reaching ripple effect - for example, jobs are created for the construction workers, subcontractors and inspectors are hired, and various construction services are purchased by the builder.
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New Zealand February Building Permits Drop 6.3%
The total number of building permits issued in New Zealand tumbled a seasonally adjusted 6.3 percent on month in February, Statistics New Zealand said on Tuesday - standing at 1,758.
Excluding apartments, the number of building permits dipped 1.4 percent to 1,598. Permits were issued for 160 apartments, including 28 retirement village units.
"The trend for new dwellings has more than doubled since March 2011," business indicators manager Neil Kelly said. "But it is now showing signs of decreasing after generally increasing for almost four years."
Permits had fallen 3.8 percent in January.
The total number of permits fell 0.6 percent on year in February.
The regions that consented the most new dwellings were: Auckland - 528 (including 98 apartments); Canterbury - 517 (including 62 apartments); and Waikato - 195.
The annual unadjusted value of consents for February was: all buildings - up NZ$136 million (12 percent) to NZ$1.2 billion; residential work - up NZ$43 million (5.9 percent) to NZ$769 million; non-residential work - up NZ$93 million (25 percent) to NZ$469 million.
[USD - FOMC Member Lacker Speech] = Due to speak about the economic outlook at the Greater Richmond Chamber of Commerce's Spring Regional Forum. Audience questions expected. Federal Reserve FOMC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy
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Trade Ideas For EUR/USD, USD/JPY, USD/CAD - UBS (based on efxnews article)
The following are UBS' latest short-term (mostly intraday) trading strategies for EUR/USD, USD/JPY, and USD/CAD.
EUR/USD: remains heavy after breaking below 1.0800 as the dollar headed higher overnight. We are happy to sell rallies to 1.0830-40 with stops above 1.0890.
USD/JPY: With the dollar strengthening across the board, we would look to buy USDJPY on dips to 119.70 with a stop below 119.10. First resistance lies at 120.50 ahead of 121.30.
USDCAD: Square longs and buy below 1.2450, sticking to the strategy of buying spot on dips rather than chasing it higher at the wrong levels.
EUR/USD nearing important downside pivots (based on dailyfx article)
if actual > forecast (or previous data) = good for currency (for GBP in our case)
[GBP - Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
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UK Factory Growth At 8-month High
British manufacturing sector expanded at the fastest pace in eight months during March on stronger growth in production and new orders that led to increased hiring, survey results from Markit Economics and the Chartered Institute of Procurement & Supply showed Wednesday.
The Markit/CIPS Purchasing Managers' Index rose to 54.4 from 54 in February, which was revised down from 54.1. The latest reading was in line with economists' expectations.
A PMI score above 50 indicates growth in manufacturing and the British factory sector expanded for the 24th consecutive month. The average reading for the first three months of 2015, at 53.8, was the best growth outcome since the second quarter of last year, the survey said.
Among different industrial groups, consumer goods remained the strongest performing sector. On the inflation front, selling prices and input costs both fell further.
Forex technical analysis: EURUSD rallies after weaker than expected ADP employment (based on forexlive article)
The EURUSD has moved higher after the March ADP employment report came in weaker than expectations at 189K vs estimate of 225K. Note that although weaker then expectations, it does not necessarily follow the Labor departments measure for private payroll. In the month of November, the Labor Department reported a gain of 414K. While ADP was down at 284K - a130K difference. In December, the difference was 44.4K. In 3 last 4 months, the ADP has understated the Labor Department's data (January data showed ADP at 250K vs 237K or 13.5K difference - see chart below)).So, although the number is week, it must be taken in context with the recent history.
Nevertheless, the EURUSD has moved to new session highs on the initial move (it has since come off a bit). However, on the move to the upside, the price did stall at the 1.0800 resistance target level (high came in at 1.0799). This level corresponds with the low price from last week's trading (at 1.08003). The 38.2% retracement of the move down from the high on March 27 (see chart below), comes in near that level as well (at 1.08035).
If the price is to move higher in trading today - and look to test the next upside target at the 100 hour moving average and 50% retracement level at the 1.0831 level - this area needs to be broken (the EURUSD back down in the 1.0768 currently).dsdsd
EURUSD Continues to Carve Lower-Highs; 1.0710 Near-Term Support (based on dailyfx article)
EURUSD Under Pressure Amid Greek Headlines; Downward Trending Channel in Focus.