Press review - page 347

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Morgan Stanley made weekly forecast for EUR in fundamental/technical mixed way expecting bearish EUR (based on efxnews article):

"We remain bearish on EUR over the medium term but see reason for some support in the near term. EURUSD continues to be inversely correlated with risk appetite. This suggests that as global volatility remains high and risk appetite weak then there is reason to see EUR supported. Draghi sounded very dovish at the recent ECB press conference so, should the voices from the central bank suggest more aggressive monetary action, then this would be a risk factor to our near-term view."


From the technical point of view - EUR/USD is located below 100-SMA/200-SMA for ranging within 1.1713 key resistance and 1.0807 key support levels for crossing symmetric triangle pattern for the trend to be continuing. Intermediate support level as the nearest bearish target is 1.0925, and the key bearish target is 1.0807. The situation with EUR/USD may be described on the following way:

  • market rally to be continuing, or
  • the bearish trend to be re-started.
We think the direction of EUR/USD movement for this week depends entirely on the fundamental news events such as Federal Funds Rate for example.
 

EUR/USD: Levels & Targets by United Overseas Bank (based on efxnews article)

United Overseas Bank estimated the nearest bullish target for EUR/USd as 1.1475 with 1.1250/55 as the bearish reversal level.

  1. "The break above 1.1255 late last week has shifted the outlook for EUR to bullish with a target of 1.1475."
  2. "In order to maintain the current nascent momentum, any pull-back should not move back below the break-out level of 1.1250/55."


This situation is mostly related to intra-day trading: as we see from H4 chart - the EURUSD is on bullish trend with 1.1379 as the next target; and the reversal bearish target is 1.1253. It means the following:

  • if the price breaks 1.1379 resistance level from below to above so the bullish trend will be continuing with 1.1475 as the next target in this case;
  • if the price breaks 1.1253 support level so the price is started to be reversed to the bearish market condition with the secondary ranging: price will be located between 100-SMA and 200-SMA.
 

Trade Ideas For EUR/USD and GBP/USD by UBS Group (based on efxnews article)

UBS Group made a trading forecast for EUR/USd and GBP/USD for today and tomorrow:

EUR/USD: "traded bid last week and ended with a short squeeze. Flows were mixed but demand improved as the weekend got closer so it seems that the market is happy to play the pair from the short side, although conviction is low. All eyes are on the FOMC meeting this week, and activity could be limited until then."


GBP/USD: "Cable has found good support around the 200-day moving average and with the positive tone from the BoE last week, this bounce should continue. This is a busy week for data, with CPI, earnings, unemployment, and retail sales due. Buy dips, with a stop below 1.5350, for a test of 1.5500 and 1.5550."


 

EUR/USD Tech Review: 'correcting the to 1.11' by Nomura; 'it isn’t very clear' by Goldman Sachs (based on efxnews article)

Nomura made a forecast for EUR/USD stated about correction for this pair to 1.11 :

  • "It is complex correction that is expected to complete via 2 a-b-c rallies, currently the latter stages of the second a-b-c are unfolding. A rally from near 1.13 to 1.14 can complete the larger wave-B."
  • "S/t, support via old pivots and an uptrend line is between 1.1300/1288, more critical support below is 1.1254. Resistance is 1.1340 and then the recent pivot high at 1.1374."


By the way, Goldman Sachs noted that the setup in EUR/USD isn’t very clear:

  • "A complete correction should retrace within wave 4 territory and near 38.2% of the preceding trend. In this case the high at 1.1713 is near enough to 38.2% at 1.18 and actually exceeds the 4 th wave (1.1533-1.1099). Moreover, an ABC extension from the March low targets 1.1818 (again, near enough?)."
  • "At this point it seems reasonable to take a neutral stance until further signal develops."


Anyway, as we see from daily chart - the price is located near above 200 day SMA with 1.1372 resistance level to be ready for two scenarios to be implemented:

  • bullish trend will be continuing by breaking 1.1372 resistance with 1.1713 as the next bullish target, or
  • the price will be reversed to the bearish trend by breaking 1.11/1.10 support levels.
 
2015-09-15 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Retail Sales]
  • past data is 0.7%
  • forecast data is 0.3%
  • actual data is 0.2% according to the latest press release

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

[USD - Retail Sales] = Change in the total value of sales at the retail level. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

==========

EURUSD M5: 30 pips price movement by USD - Retail Sales news event:


 

EUR/USD Into FOMC - BNPP (based on efxnews article)

BNPP is expecting for Thursday’s FOMC statement to be in dovish way and as a result - the EUR/USD should come to 1.10 to be near 1.1088 reversal support level located inside Ichimoku cloud and below 200 day SMA in the ranging bearish area of the chart.

  • "The pattern, if extended through Thursday’s Fed result, would bode well for EURUSD to trade back towards 1.10 and USDJPY to extend its recovery towards 123."
  • "Still, we think risk-reward remains attractive for maintaining USD long exposure given our medium-term constructive view and light positioning."



For now - the price is located near above 200 day SMA to be ready for the bullish trend to be continuing, or to reverse to the primary bearish market condition with secodary ranging. If daily price crosses 1.1088 from above to below so we may see the reversal of the price movement to the primary bearish market condition.

 

Intraday Outlooks For EUR/USD - SEB (based on efxnews article)

Skandinaviska Enskilda Banken made an intra-day forecast for EUR/USD. As we see from the chart below - the price is located between 100 SMA and 200 SMA for ranging market condition waiting for direction. On daily base - the price is near above 200 day SMA for trying to cross it from above to below for the ranging bearish condition to be started in this case.



EUR/USD: Bears are happier below 1.1329. "A near-term bearish impulse may or may have not yet started. If holding from breaking back over 1.1329 and instead extending the drop below the near-term "Equality point" at 1.1240 we believe in the former. Current intraday stretches (shouldn't really become tested ahead of Fed) are located at 1.1200 & 1.1370."

 

How To Trade The FOMC - Credit Agricole (based on efxnews article)


  • "USD longs funded in low yielding currencies like CHF seem still attractive in our view. A Fed hike could boost the USD but may not necessarily trigger a sharp risk selloff. As a result the likes of EUR, CHF and JPY need not receive a massive boost. We like being long USD against CHF in particular because the positive correlation between CHF and risk aversion has been weakening recently."
  • "If the Fed doesn't hike and signal a lower glide path for Fed fund rates while downgrading its core inflation and unemployment projections, chances are that risk appetite could recover some more. While we could see investors unwinding decoupling trades and USD underperforming, we doubt that this will be sustained as markets will continue to see any decision to keep rates unchanged as delaying the inevitable. Under this scenario, the USD may lose some ground against EUR, CHF and JPY initially but the underperformance should be ultimately capped by the prospects for more policy divergence (eg more ECB QE) and resilient risk appetite. We think that USD/CHF should hold up well as EUR appreciates against both CHF and USD. When it comes to risk-correlated or commodity currencies, we doubt that any of them could regain ground on a sustained basis, given the lingering risks from China and the Fed."
  • "GBP could be among the more resilient currencies today especially if the Fed boosts investors’ demand for decoupling trades. Indeed, accelerating wage growth in the UK and increasingly hawkish rhetoric from the BoE has helped GBP regain some ground of late."
 

USD Post-FOMC by Major Banks (based on efxnews article)

The dovish FOMC was on Thursday at 19:00 GMT so the major banks are made a forecast about the USD after FOMC.


Morgan Stanley: "Long USD positioning is vulnerable over coming days and perhaps weeks...But USD Impact Temporary. Our structurally bullish USD view has never been Fed-focused. Rather, our framework is built on the reduced investment attractiveness in much of the rest of the world. Any setback in the USD is likely to be short-lived in our view, providing a renewed buying opportunity against EM and commodity-related currencies."

BofA Merill: "The lowering of the median dots raises risks around a hike this year. But, the FOMC’s confidence in the outlook (particularly in the labor market) underpins hikes later this year, and therefore, the policy divergence theme we expect to support the USD. With a 30% chance priced into the meeting, we would expect some near-term pressure on the USD—particularly versus commodity-linked currencies where USD positioning is largest—as the timing of the first hike is now less certain. However, with any significant USD weakness likely to incent other central banks (like the ECB) to ease further and given our view for a December Fed hike, we see USD downside as limited here."

Nomura: "For the FX market specifically, Nomura doesn't think the information received today will lead to a sustained unwinding of USD longs versus G10 currencies—i.e., momentum could fade within a few sessions. We have been flat in terms of USD exposure versus majors for the last several weeks in anticipation of this outcome. But looking ahead, the Fed is still operating with liftoff this year as the central case, as the 2015 dots clearly signal. Bottom line: We still believe that our 1.10 year-end target for EURUSD is likely to be achieved under the assumption th that the Fed is able to raise rates by the December meeting, which seems fairly likely."

SocGen: "The Fed’s decision to leave rates on hold was not a surprise to a market positioned that way but the tone of the statement and the new lowered ‘dot-path’ (median sees one hike this year, 4 in 2016, 5 in 2017 and 3 in 2018 for a 3.375% Funds rate peak) have dragged Treasury yields down. That is not dollar-supportive. However, any bounce in risk assets will be short-lived. A dovish and dithering Fed inspires little confidence. Once EMinspired reduction in dollar long positions is over, we look for AUD, NZD and CAD to weaken again, with NZD the most vulnerable. And the biggest winner could still be the yen if the risk mood sours."

Danske: "We target EUR/USD at 1.10 in 3M and 6M and then up to 1.15 in 12M. We forecast JPY to underperform among the G4 as rising expectations for additional BoJ easing will support USD/JPY going into the 30 October Bank of Japan meeting. Moreover, we note that the upside potential in USD/JPY has increased following the past week’s substantial reduction in specualtive short JPY positions. We target USD/JPY at 124 and 125 in 3M and 6M, respectively. In contrast to EUR and JPY, GBP is also expected to perform on a 3M to 6M horizon supported by higher Uk interest rates as we still project Bank of England to hike in February. In the very short term, however, GBP is likely to come under pressure on low inflation prints in the UK as due to BoE’s explicit concerns about the weak short term inflation outlook. We forecast GBP/USD at 1.53 in 3M."

 

Trade Ideas For EUR/USD - UBS (based on efxnews article)

From fundamental point of view

UBS made a forecast for EUR/USD based on fundamental news event which was yesterday:
"The overall reaction to the FOMC decision yesterday has been relatively muted considering this was one of the biggest events of the year. The market's focus can now shift elsewhere, and with concerns over China's economy and a lack of confidence from the Fed, equities should remain under pressure. The possibility of easing from the ECB in October should cap the upside in EURUSD."


From the technical point of view

Daily price is located above Ichimoku cloud for the primary bullish market condition with the secondary ranging between 1.1440 intermediate resistance level and 1.1131 intermediate support level. The key levels for the bearish or bullish trend to be continuing are the following: 1.1713 bullish resistance and 1.0924 bearish support. The price may be ranging within 1.1440/1.1131 or within 1.1713/1.0924 levels but the ranging market will be continuing until the price will break one of the bullish/bearish key s/r levels.

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