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EUR/USD Intra-Day Fundamentals - M3 Money Supply and 8 pips price movement

2015-12-30 09:00 GMT | [EUR - M3 Money Supply]

if actual > forecast (or previous one) = good for currency (for JPY in our case)

[EUR - M3 Money Supply] = Change in the total quantity of domestic currency in circulation and deposited in banks. It's positively correlated with interest rates - early in the economic cycle an increasing supply of money leads to additional spending and investment, and later in the cycle expanding money supply leads to inflation.

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"The annual growth rate of the broad monetary aggregate M3 decreased to 5.1% in November 2015, from 5.3% in October, averaging 5.1% in the three months up to November. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate including currency in circulation and overnight deposits (M1) decreased to 11.2% in November, from 11.8% in October. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) was less negative at -4.1% in November, from -4.3% in October. The annual growth rate of marketable instruments (M3-M2) decreased to 2.6% in November, from 3.1% in October."


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EURUSD M5: 8 pips price movement by EUR - M3 Money Supply news event :


AUDIO - Power Trading Radio Final Show 2015 (based on the article)

"The ambassador of opportunity John O'Donnell hosts the final show for 2015 with special guest Dr. Mark Thorton discussing global financial issues and how you can create a personal strategy to increase your wealth in 2016 and beyond!"


6 month forecast by Citi group for US Dollar, Forex and Gold (based on the article)


Gold Price Forecast Q1 2016 (based on the article)


  • "Gold prices continue to exhibit a strong relationship with Fed policy bets. Indeed, the projected 2016 policy path implied in Fed Funds futures shows an impressive -0.92 inverse correlation with spot prices for the yellow metal (on rolling 60-day studies, see chart). Needless to say, this is not surprising considering gold’s familiar appeal as an alternative store of value and go-to anti-fiat asset. If markets begin to consider the possibility that stimulus withdrawal might proceed closer in line with FOMC projections versus standing market expectations, gold prices are likely to face a swell in selling pressure."
  • "Back in September we warned of the risk for a near-term correction higher to test the 52-week moving average and indeed the following weeks saw gold prices probe & fail to break above this threshold before turning over sharply. The subsequent decline is now testing a key support zone heading into the close of the year at 1044/53. This region is defined by the 61.8% extension off the 2012 high, the 2010 low and basic parallel support extending off the 2014 lows."


Bottom line: 'we’ll be looking for a push higher in early 1Q for more favorable short entries with a break of the low targeting support objectives 1005, the sliding parallel extending off the 2013 low and confluence Fibonacci support at 975/80.'

USDJPY Price Forecast Q1 2016 (based on the article)


  • "With the Federal Reserve removing the zero-interest rate policy (ZIRP) in 2015, the normalization cycle in the U.S. accompanied by the quantitative/qualitative easing (QQE) program in Japan may fuel a bullish outlook for USD/JPY amid the deviating paths for monetary policy."
  • "The current course for monetary policy in the U.S. and Japan may produce a further advance in USD/JPY over the coming months, and the pair may continue to retrace the decline from back in 2002 as the Fed gears up to remove the emergency measures throughout the year ahead. However, a more delayed normalization cycle in the U.S. paired with a material shift in the BoJ’s stance may produce range-bound conditions during the first three-months of 2016 as market participants gauge the prospects for future policy."
  • "Trading wise, price action since December 2014 would complete a head and shoulders top on a drop below 115.57 and yield a target zone of 105.30-106.50. The target zone would be ‘in line’ with Elliott wave guidelines that suggest a corrective process terminates near the former 4th wave of one less degree (that zone is 101.07-105.44)."

In summary, 'long term technical observations reveal a potential inflection point in the USD/JPY exchange rate. Trading behavior in 2016 may look quite different from what traders have seen over the last 4 years.'

Forex Weekly Outlook January 4-8 (based on the article)

2016 begins with a busy calendar: Canadian employment data, US PMIs, Trade Balance, FOMC Meeting Minutes and employment data culminating with the Non-Farm Payrolls. In addition, liquidity is set to return after the holiday season. These are the highlights opening 2016. Join us as we explore these market-movers.

U.S. consumer confidence edged up to 96.5 from 92.6 in November, beating market forecasts. Current conditions improved from 110.9 to 115.3 and the Expectations Index improved to 83.9 from 80.4 in November. Overall, consumers’ assessment of the current state of the economy remains positive. Meanwhile Jobless claims increased 20,000 during the holiday week due to temporary holiday factors. Economists expected a rise of 270,000. Analysts expect a slower pace of job market improvement in 2016 despite the low unemployment rate.

  1. Chinese Caixin Manufacturing PMI: Monday, 1:45. This independent report for the Chinese economy has worried investors during 2015, but did recover from the lows. After hitting 48.6 points in November, a rise to 48.9 is on the cards for December, still below the 50 point mark separating growth and contraction.
  2. US ISM Manufacturing PMI: Monday, 15:00. The U.S. manufacturing activity plunged in November to its worst levels since June 2009, when the index of national factory activity declined to 48.6 crossing the 50 point line for the first time since November 2012. The previous reading was 50.5. Economists expected the index to rise to 50.6. The employment section rose to 51.3 from 47.6 in October, new orders fell to 48.9, lowest since August 2012 and the prices paid index fell to 35.5 from 39. A score of 49.1 points is expected now.
  3. US ADP Non-Farm Employment Change: Wednesday, 13:15.  Private sector employment increased by 217,000 jobs in November according to ADP Report. The reading topped market forecast and followed a 196,000 reading in the previous month. This was the strongest gains in the service sector since June. The increase was mainly driven by a rebound in professional/business service jobs. Job growth remains strong and the pace of job creation is twice that needed to absorb growth in the working age population. 193K is expected now.
  4. US Trade Balance: Wednesday, 13:30. The U.S. trade deficit widened unexpectedly in October amid a fall in exports. The trade gap increased 3.4% to $43.9 billion, resulting from a stronger dollar. September’s trade deficit was revised up to $42.5 billion from the previously reported $40.8 billion. Economists had expected an improvement to $40.6 billion.  Exports fell 1.4% to $184.1 billion, the lowest level since October 2012. Imports slipped 0.6% to $228.0 billion in October. A deficit of 44 billion is expected.
  5. US ISM Non-Manufacturing PMI: Wednesday, 15:00. The U.S. service sector reflected slower business activity in November. The Institute for Supply Management’s non manufacturing purchasing-managers index fell to 55.9 from 59.1 in October. Economists expected the index to fall to 58.1. However, despite this decline, November’s reading shows the resilience of the domestic services sector. Business activity, new orders and employment components fell by more than 4 points, but still posted readings above 55.
  6. US FOMC Meeting Minutes: Wednesday, 19:00. These are the minutes from the historic rate hike decision. The statement showed a unanimous vote, but perhaps the wider array of members wasn’t in full agreement. It will be important to note the sentiment towards further rate hikes in 2016. Currently, 4 hikes are foreseen according to the dot plot, while markets expect far less activity. The Fed decided to put an emphasis on inflation, and we will also learn how worried they were at the time.
  7. US Unemployment Claims: Thursday, 13:30.  Initial jobless claims in the U.S. increased by 20,000 last week to a seasonally adjusted 287,000. The increase was larger than the 274,000 initially expected.  Meanwhile, the four-week moving average increased by 4,500 claims to 272,500. Continuing jobless claims edged up by 3,000 to a seasonally adjusted 2,198,000. A drop to 271K is predicted now.
  8. Canadian employment data: Friday, 13:30. The Canadian economy shed nearly 36,000 jobs in November after a massive part-time workers hired for the October federal election were dismissed. The job losses, were four times larger than the 10,000 expected raising the unemployment rate  to 7.1%, from 7% in October. While the economy lost 72,000 part time workers, it also gained 36,000 full-time employees, suggesting the picture is not as bad as it looks. A gain of 10.4K jobs and steady unemployment rate at 7.1% are predicted now.
  9. US Non-Farm Employment Payrolls: Friday, 13:30. The last NFP report showed a 211,000 jobs gain in November, beating forecasts for a 201,000 increase, keeping the unemployment rate steady at 5%. The solid job gain was exactly what the Fed needed to make the call to raise rates on their December meeting. Wages increased 2.3% year-over-year in November a bit lower than the 2.5% rise posted in October showing a growth trend. A gain of 202K jobs is predicted with a steady unemployment rate of 5%. Wages are expected to rise 0.2% m/m once again. While no hike is expected in the January meeting, this feeds into the March decision.

EUR/USD Technical Analysis: daily ranging on reversal; weekly AB=CD pattern for the bearish to be continuing (adapted from the article)


  • "The Euro may be carving out a top below the 1.11 figure against the US Dollar having rebounded as expectedafter last month’s ECB policy meeting. Prices appear to be carving out a bearish Head and Shoulders chart formation, although confirmation of the setup is still pending for now."
  • "A daily close below the 1.0777-1.0818 area marked by the May 27 low and the 23.6% Fibonacci expansion clears the way for a challengeof the 38.2% level at 1.0602. Alternatively, a rebound that takes the pair above the December 15 high at 1.1060 opens the door for a test of falling trend line resistance at 1.1175."
  • "The Head and Shoulders setup is not actionable for now absent a break of neckline support at 1.0777. More broadly, prices are too close to support to justify entering short from a risk/reward perspective. With that in mind, we will remain on the sidelines and wait for a better-defined opportunity to present itself."


USD/CAD Intra-Day Fundamentals - Royal Bank of Canada Manufacturing PMI and 16 pips price movement

2016-01-04 14:30 GMT | [CAD - RBC Manufacturing PMI]

if actual > forecast (or previous one) = good for currency (for CAD in our case)

[CAD - RBC 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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"Adjusted for seasonal influences, the RBC Canadian Manufacturing PMI registered 47.5 in December, down from 48.6 in November and below the neutral 50.0 threshold for the fifth consecutive month. The latest PMI reading was the lowest in just over five years of data collection, largely reflecting weaker contributions from the output, new orders and employment components."    

"Business conditions in the Canadian manufacturing sector fell at a survey-record pace in December as weaker domestic demand and ongoing uncertainty in the energy sector continues to  take  its  toll," said Craig  Wright, senior vice-president and chief economist, RBC. "Across Canada, Alberta and British Columbia experienced the sharpest deterioration in conditions, while Ontario continued to be a national bright spot, posting a sustained rise in output production. As the  U.S. economy strengthens, we expect to see improvements in Canadian manufacturing sector activity levels."

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USDCAD M5: 16 pips range price movement by CAD - RBC Manufacturing PMI news event :


Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video January 2016

Sergey Golubev, 2016.01.06 13:13

Forex News Trading Strategy For The 4th - 8th of January

This is fundamental analysis for the week using ff economic calendar as the example. For more about economic calendar for Metatrader 5for traders and for developers - see this topic: All about Calendar tab and Macro Economic Events.

Forum on trading, automated trading systems and testing trading strategies

All about Calendar tab and Macro Economic Events.

Alain Verleyen, 2013.03.17 16:54

For traders

MT5 user interface

  • If you can't view the calendar tab, probably it's a choice a your broker :

Analysis

For developers

  • A good demonstration about using calendar economic events from code.
  • Documentation about object use by Calendar (See OBJ_EVENT).


Trading News Events: EUR - Retail Sales (based on the article)

What’s Expected


Why Is This Event Important

After further reducing the deposited-rate and adjusting its quantitative-easing program in December, the Governing Council may largely endorse a wait-and-see approach in the first-half of the year as the non-standard measures continue to work their way through the real economy. Positive developments coming out of the monetary union may encourage the ECB to adopt an improved outlook for the region but, central bank President Mario Draghi may keep the door open to implement additional monetary support in order to achieve the mandate for price stability.

However, waning confidence accompanied the slowdown in private-lending may drag on retail sales, and a dismal development may encourage the ECB to further insulate the region as President Draghi largely retains a dovish outlook for monetary policy.

How To Trade This Event Risk

Bullish EUR Trade: Euro-Zone Retail Sales Climbs 0.2% or Greater

  • Need green, five-minute candle following a positive growth report to consider a long EUR/USD trade.
  • If market reaction favors a bullish Euro trade, buy EUR/USD with two separate position.
  • Set stop at the near-by swing low/reasonable distance from cost; at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is met, set reasonable limit.
Bearish EUR Trade: Private-Sector Spending Continues to Disappoint
  • Need red, five-minute candle to favor a short EUR/USD trade.
  • Implement same strategy as the bullish euro trade, just in reverse.
Potential Price Targets For The Release

EURUSD Daily


  • EUR/USD remains at risk of giving back theadvance following the ECB’s December meeting amid the deviating paths for monetary policy but, the pair may consolidate going into the end of the week as market participants gauge the trajectory for U.S. interest rates.
  • Interim Resistance: 1.1052 (November high) to 1.1090 (50% retracement)
  • Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)
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