Press review - page 315

[Sergey Golubev]

EUR/USD Forecast May 11-15 (based on forexcrunch article)

EUR/USD moved up to new highs, but shed the gains in a volatile week. The upcoming week features yet another chapter in the Greek drama as well as important GDP data . Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

1. Eurogroup meetings on Greece: Monday. May 11th was a yet another deadline for Greece and its creditors to reach a deal on, but this seems unlikely at the moment. Low expectations mean that if a deal is reached it could be positive for the euro. There has been some optimism recently.
2. German WPI: Monday, 6:00. The Wholesale Price Index also feeds into the general inflation figures and impacts the final CPI. After a rise of 1% in March, a smaller 0.4% m/m gain is on the cards for April.
3. GDP data: Wednesday: France at 5:30, Germany at 6:00, Italy at 8:00 and the whole euro-zone at 9:00. We will now learn if growth has indeed picked up in Q1, as the weak euro may have contributed to exports. Starting with France, the second largest economy grew by only 0.1% in Q4 2014, continuing the path of hardly seeing any growth. We are now expecting +0.4% for Q1 2015. The zone’s locomotive, Germany enjoyed a very strong growth rate of 0.7% in Q4, and could lead growth once again by advancing 0.5% q/q. The zone’s third largest economy, Italy saw no growth after three consecutive quarters of contraction. Also here, we are now expecting positive growth of 0.2%. The euro-zone as a whole, enjoyed a better than expected growth rate of 0.3%, powered by Germany, but is still fragile. A wider advance, built on the three largest economies and Spain’s strong 0.9% growth rate (already reported earlier) is expected now: +0.5% Note that the German release has the biggest impact, but also the initial publication from France tends to move the dial.
4. German Final CPI: Wednesday, 6:00. The initial number for April came out at -0.1% m/m, better than expected. This will probably be confirmed now.
5. French Non-Farm Payrolls: Wednesday, 6:45. The second largest economy in the zone has seen no change to employment levels in Q4 and another month of stagnation is on the cards. The country is still struggling with unemployment, as jobless seekers remain at high levels. Note that at the same time, the country also releases CPI data, which rose 0.7% in March and is expected to rise 0.2% in April.
6. Industrial Production: Wednesday, 9:00. After Germany disappointed with its numbers, we can expect the euro-zone figures to almost reach a standstill in March after rising 1.1% in February. +0.1% is expected.
7. ECB Meeting Minutes: Wednesday, 11:30. In the recent meeting, the European Central Bank left policy unchanged. Draghi showed determination in implementing QE despite the recent improvement. We will now see what the different members talked about in the meeting, and if there was pressure from some German members to exit the QE program, something that seems unlikely now.

[Sergey Golubev]

EURUSD Resistance Breaks on News (based on dailyfx article)

• The EURUSD breaks resistance on news
• Today’s R4 breakout pivot is located at 1.1292
• A move to R3 would suggest a change in market conditions

The EURUSD is showing signs of an early morning breakout as prices move above today’s R4 pivot at 1.1291. The initial price jump for the pair came on worse than expected Advanced Retail Sales data, which was released at 0.0% relative to an expected .02%. As this morning’s move matures, traders will continue to watch the R4 pivot, which will now act as a value of support in the event of a further bullish advance for the EURUSD.

Alternatively, a move back inside of today’s pivot range would suggest a reversal of the EURUSD’s current price momentum.Wednesday’s pricing range begins at the R3 pivot found at a price of 1.1252. A move back inside of the R3 pivot, would open the possibility of a price reversal on the day back towards values of support. This would include the S3 support pivot, which is found at the bottom of today’s 80 pip range at a price of 1.1172. A further decline below the S4 pivot at 1.1132 would open the market to a bearish breakout and the potential for a broader market reversal.

[Sergey Golubev]

EURUSD wanders down into the closing hour (based on forexlive article)

The EURUSD has wandered lower away from the resistance from above near the 1.1391 level. This is the area where buyers should return.  Of course the end of the day may lead to more consolidation type trading, but intraday traders who sold above, may look to the area to lighten up and call it a day.

[Sergey Golubev]

Aussie rises to 3-1/2 month highs

The Australian dollar rose to three-and-a-half month highs against its U.S. counterpart on Thursday, as Wednesday's U.S. retail sales report continued to weigh on the greenback.

[Sergey Golubev]

EUR/USD: Too Early To Re-Engage - Credit Suisse (based on efxnews article)

CS reviews the recent data at hand and comes to the following conclusions:

• The current USD consolidation is well in line with the history of corrections within USD bull markets.
• Despite the sell-off in nominal yields, real rate differentials have widened against the EUR.
• The breakdown of the move in nominal EUR rates in real rates and inflation swaps highlights the risk of a potential premature tightening in financial conditions in Europe.

"Indeed, while we still hold a 3m 1.05 target for EURUSD (based partly on our non-consensus house view that the Fed will hike in September), we are not adding to existing short EUR positions (now minimal in delta terms) in our model portfolio until we have a clearer view on how these factors will play out. Effectively, we have stood on the sidelines on EURUSD since 8 April – it is still too early to re-engage, in our view".

[Sergey Golubev]

EUR/USD forecast for the week of May 18, 2015, Technical Analysis (based on fxempire article)

The EUR/USD pair broke higher during the course of the week, clearing the top of the shooting star from the previous week. Because of this, we feel that the market is going to test the 1.15 level, and once we get above there the complete trend has changed. We believe that’s getting ready to happen and we are bullish of the Euro in general, so we are buying pullbacks. Quite frankly, we think that this is a move that is telegraphing itself so obviously that almost everybody in the world is getting ready to start buying.

[Sergey Golubev]

Goldman Sachs technical analysis says EUR/USD looking constructive: oscillators, Elliot Wave (based on forexlive article)

"EUR/USD is looking increasingly stable/constructive as weekly and monthly oscillators are crossing positively from the bottom of their multi-year range."

"The low (which reached 1.0485) came close enough to satisfying a very big ABC that started at the Jul. '08 high. The month of April formed a bullish outside/engulfing pattern. The month of May has already made a new high. All of this suggests that there is a strong likelihood that the market will remain stable/constructive in the near-to-medium term time horizon."

[Sergey Golubev]

Credit Agricole: Stay Short EUR/USD For 1.08 (based on efxnews article)

"The USD kicked off the week on a strong note, rising against all major currencies. The EUR failed to hold gains near the cycle high of 1.15, adding to our conviction that the single currency could move lower from here."

"We think technical factors have played an important role in the squeeze in European yields, highlighting that rate spreads should shift back in the USD’s favour. While the US economy has lost some momentum at the start of 2015, we still look for the economy to grow above trend for some time. This should help absorb excess slack, pushing the labour market closer to NAIRU by yearend. By the same token, it would only take monthly employment gains of 150k to get the unemployment rate to 5.0% by yearend."

[Sergey Golubev]

I am not exactly sure but I think that this price movement (as 64 pips for now) is based on few news events:

• German PPI  at 6 am today (official report is here):
  "In April 2015 the index of producer prices for industrial products fell by 1.5% compared with the corresponding month of the preceding year. In March 2015 the annual rate of change all over had been –1.7%".
• The speech of Charles L. Evans, Chief Executive Officer of the Federal Reserve Bank of Chicago (at 7 am GMT time - official report is this one)
• Non-monetary policy's ECB meeting (at 7 am - official report is here)
  

[Sergey Golubev]

2015-05-22 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - German GDP]

• past data is 0.3%
• forecast data is 0.3%
• actual data is 0.3% according to the latest press release

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

[EUR - German GDP] = Change in the inflation-adjusted value of all goods and services produced by the economy.

==========

"The German economy continued to grow at a slightly slower pace. As the Federal Statistical Office (Destatis) already reported in its first release of 13 May 2015, the gross domestic product (GDP) increased 0.3% - upon price, seasonal and calendar adjustment - in the first quarter of 2015 compared with the fourth quarter of 2014. A marked increase of +0.7% was recorded in the last quarter of 2014, as reported earlier. For the entire year of 2014, GDP values did not change as compared with the figures published so far (+1.6%)."