Press review - page 377

[Sergey Golubev]

GBP/USD Intra-Day Fundamentals: UK Services PMI and 39 pips range price movement

2016-03-03 09:30 GMT | [GBP - Services PMI]

• past data is 55.6
• forecast data is 55.1
• actual data is 52.7 according to the latest press release

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

[GBP - Services PMI] = Level of a diffusion index based on surveyed purchasing managers in the services industry.

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"The headline figure for the survey is the seasonally adjusted Markit/CIPS UK Services Business Activity Index, a single-figure measure designed to track changes in total UK services activity compared with one month previously. Readings above 50.0 signal growth of activity compared with the previous month, and below 50.0 contraction. The seasonally adjusted Business Activity Index fell to 52.7 in February, from 55.6 in January. This signalled the slowest rise in service sector activity since March 2013. Moreover, the Index was below its long-run trend level (since July 1996) of 55.2. Nevertheless, services output has risen continuously for 38 months, the second-longest sequence of expansion in the survey history."

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GBPUSD M5: 39 pips range price movement by UK Services PMI news event :

[Sergey Golubev]

EUR/USD Intra-Day Fundamentals: U.S. Jobless Claims and 22 pips range price movement

2016-03-03 13:30 GMT | [USD - Unemployment Claims]

• past data is 272K
• forecast data is 270K
• actual data is 278K according to the latest press release

if actual < forecast (or previous one) = good for currency (for USD in our case)

[USD - Unemployment Claims] = The number of individuals who filed for unemployment insurance for the first time during the past week.

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"A day before the release of the closely watched monthly jobs report, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended February 27th.

The report said initial jobless claims rose to 278,000, an increase of 6,000 from the previous week's unrevised level of 272,000."

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EURUSD M5: 22 pips range price movement by U.S. Jobless Claims news event :

[Sergey Golubev]

USD/JPY Intra-Day Fundamentals: ISM Non-Manufacturing PMI and 22 pips range price movement

2016-03-03 15:00 GMT | [USD - ISM Non-Manufacturing PMI]

• past data is 53.5
• forecast data is 53.1
• actual data is 53.4 according to the latest press release

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

[USD - ISM Non-Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry.

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"The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee. "The NMI® registered 53.4 percent in February, 0.1 percentage point lower than the January reading of 53.5 percent. This represents continued growth in the non-manufacturing sector at a slightly slower rate. The Non-Manufacturing Business Activity Index increased to 57.8 percent, 3.9 percentage points higher than the January reading of 53.9 percent, reflecting growth for the 79th consecutive month at a faster rate.The headline figure for the survey is the seasonally adjusted Markit/CIPS UK Services Business Activity Index, a single-figure measure designed to track changes in total UK services activity compared with one month previously. Readings above 50.0 signal growth of activity compared with the previous month, and below 50.0 contraction. The seasonally adjusted Business Activity Index fell to 52.7 in February, from 55.6 in January. This signalled the slowest rise in service sector activity since March 2013. Moreover, the Index was below its long-run trend level (since July 1996) of 55.2. Nevertheless, services output has risen continuously for 38 months, the second-longest sequence of expansion in the survey history."

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USD/JPY M5: 22 pips range price movement by ISM Non-Manufacturing PMI news event :

[Sergey Golubev]

Trading News Events: Non-Farm Employment Change (based on the article)

What’s Expected:

Why Is This Event Important:

With the U.S. economy approaching ‘full-employment,’ signs of sticky wage growth may encourage the FOMC to implement higher borrowing-costs over the coming months as Chair Janet Yellen remains confident in achieving the 2% inflation-target over the policy horizon.

Nevertheless, waning business confidence accompanied by fears of a slowing recovery may drag on hiring, and a dismal NFP report may produce increased headwinds for the dollar as market participants push out bets for the next Fed rate-hike.

How To Trade This Event Risk

Bullish USD Trade: NFP Climbs 195K+ Accompanied by Sticky Wage Growth

• Need red, five-minute candle following the NFP print to consider a short trade on EUR/USD.
• If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bearish USD Trade: U.S Employment Report Falls Short of Market Expectations

• Need green, five-minute candle to favor a long EUR/USD trade.
• Implement same setup as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release

EURUSD Daily

• EUR/USD may continue to consolidate within the 2015 range following the failed run at the October high (1.1494), but the pair stands at risk of facing near-term headwinds as market participants anticipate the European Central Bank (ECB) to implement more non-standard measures at the March 10 interest rate decision.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

Impact that the U.S. Non-Farm Payrolls report has had on EUR/USD during the previous month
EURUSD M5: 133 pips range price movement by Non-Farm Employment Change news event:

[Sergey Golubev]

EUR/USD Intra-Day Fundamentals: Non-Farm Employment Change and 68 pips price movement

2016-03-04 13:30 GMT | [USD - Non-Farm Employment Change]

• past data is 172K
• forecast data is 195K
• actual data is 242K according to the latest press release

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

[USD - Non-Farm Employment Change] = Change in the number of employed people during the previous month, excluding the farming industry.

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"Total nonfarm payroll employment increased by 242,000 in February, and the unemployment rate was unchanged at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in health care and social assistance, retail trade, food services and drinking places, and private educational services. Job losses continued in mining."

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EURUSD M5: 68 pips price movement by Non-Farm Employment Change news event :

[Sergey Golubev]

Gold Rallies Despite Stronger-Than-Expected U.S. Jobs Data (based on the article)

• "Gold prices are moderately higher in morning dealings Friday, despite a just-released U.S. employment report that was stronger than market expectations. “You just can’t keep a good market down,” quipped one gold market watcher. Gold prices pushed to a 13-month high above $1,275.00 in overnight dealings. April Comex gold was last up $10.70 at $1,269.00 an ounce. May Comex silver was last up $0.349 at $15.495 an ounce."
• "The February U.S. employment report from the Labor Department showed the key non-farm payrolls component of the jobs report at up 242,000. The number was expected to show a rise of around 200,000. This report falls into the camp of the monetary policy hawks who favor the Federal Reserve raising interest rates again, and sooner rather than later. The jobs report did give the U.S. dollar index a modest lift."

[Sergey Golubev]

Forex Weekly Outlook March 7-11 (based on the article)

Haruhiko Kuroda and Stephen Poloz speak, rate decision in Canada, New Zealand and the Eurozone and Employment data in the US and Canada. These are the main events on Forex calendar.

1. Haruhiko Kuroda speaks: Monday, 15:40. BOE Governor Haruhiko Kuroda speaks in Tokyo. Last week Kuroda said the central bank is not seeing another rate cut after introducing a negative rate in February. The effects of the new monetary policy are starting to show and will help the BOJ to achieve its 2% inflation goal approximately in the first half of 2017. Since the BOJ’s rate cut in January, some banks started cutting mortgage rates while also reducing deposit rates. Market volatility is expected.
2. Canadian rate decision: Wednesday, 15:00. The Bank of Canada maintained its interest rate at 0.5% in January, judging that the current stance of monetary policy is appropriate. The central bank cut rates twice in 2015 in order to boost the economy. Analysts do not rule out another cut this month, although the bank may not be in a hurry to cut rates before the federal budget is released. The BoC expects Canada’s economy to expand by 1.5% this year and 2.5% in 2017.
3. US Crude Oil Inventories: Wednesday, 15:30. US crude inventories edged up by 10.4 million barrels to a record high 518 million last week. The reading almost tripled the 3.6 million-barrel increase projected by analysts. Oil prices declined on the data but recuperated modestly higher from Tuesday’s settlement. Economists expect prices to rise gradually over the course of the year. Investors expect prices will rise hoping OPEC will convince its members to cut production.
4. New Zealand rate decision: Wednesday, 20:30. The Reserve Bank of New Zealand decided to keep its key interest rate unchanged at 2.5% in January, after December’s rate cut.  The decision was in line with market forecast. Concerns about global economic strength in China and emerging markets downgraded inflation expectations. Furthermore, domestic economy weakened during the first half of 2015 driven by the lower terms of trade. However, growth is expected to rise in 2016 amid strong net immigration, tourism, a solid pipeline of construction activity, and the lift in business and consumer confidence.
5. Eurozone rate decision: Thursday. 12:45. European Central Bank President Mario Draghi signaled the bank may ease its monetary policy further in March amid rising concerns over the weakening of global economic growth causing volatility in financial markets. Draghi said the measures the bank announced in December were drastic but circumstances had changed since then and that there was “no limit” to action within its mandate. The slide in oil prices the weakening in China and commodity prices will keep the ECB busy in the coming months.
6. US Unemployment Claims: Thursday, 13:30. The number of US Jobless claims unexpectedly increased by 6000 claims last week, reaching 278,000. Analysts forecasted claims will increase by 271,000 last week. However, the underlying trend remains robust. The four-week moving average of claims dropped 1,750 to 270,250 last week, the lowest level since late November. The claims report showed the number of people still receiving benefits after an initial week of aid rose 3,000 to 2.26 million. Analysts expect the number of new claims will reach 272,000 this week.
7. Stephen Poloz speaks: Thursday, 21:15 BOC Governor Stephen Poloz will speak in Ottawa. Stephen Poloz, said in January that there is no simple solution to the oil price plunge and the continuing collapse in commodity prices. The economy will heal itself but it will be a  painful process which will weigh on Canadians, despite the BOC easing measures that can help buffer those effects. Poloz expects the Lonnie to remain weak exactly as it had been in early 2002 when oil prices plunged to around US$25 per barrel.
8. Canadian employment data: Friday, 13:30. Canada’s employment market contracted 5,700 jobs in January while the jobless rate edged up 0.1% to 7.2%. The main losses occurred in oil-producing regions as oil prices continued to plunge but its effects filtered to other industries. Alberta lost nearly 22,000 full-time jobs while almost 12,000 part-time positions were created, indicating there were not enough full time positions. Ontario was the only province to see job growth, with 20,000 new positions created in January. The Canadian economy is expected to add 10,200 jobs while the unemployment rate is forecasted to remain at 7.2%
9. US Prelim UoM Consumer Sentiment: Friday, 15:00. Consumer sentiment dropped in February to a four-month low of 90.7 after posting 92.3 in January amid declines in stock prices and weaker global conditions. The current conditions section fell to a three-month low of 105.8 from 106.4 Nonetheless, there was a 45% increase in the number of households reporting that their financial situation had improved. The six months gauge declined to 81, the weakest since September, from 82.7.

[Sergey Golubev]

Week Ahead by Crédit Agricole (the article)

What we are watching:

• EUR: "Next week’s ECB monetary policy announcement should prove sufficient in keeping EUR a sell on rallies."
• CAD: "Given little scope of the BoC turning more dovish next week, the CAD is likely to remain supported."
• NZD: "Regardless of softer growth and inflation conditions the RBNZ may refrain from easing further. As such the NZD may face upside risk."

[Sergey Golubev]

Weekly Fundamentals (adapted from the article)

GBPUSD - "The broader outlook for GBP/USD remains tilted to the downside as the BoE lags behind its U.S. counterpart, and the pair may continue to carve a long-term series of lower highs & lows as the threat of an EU exit dampens the fundamental outlook for the U.K".

USDJPY - "The Bank of Japan will look at market developments with great interest at its March 15 meeting, and much would need to change between now and then to make fresh BoJ policy action likely. It is nonetheless clear that much could change between now and then. Whether or not the Yen resumes its uptrend may very well depend on market reactions to the ECB and other key events in the week ahead."

AUDUSD - "Beijing pre-announced a lower GDP growth target, setting a range of 6.5 to 7 percent as the objective. Premier Li Keqiang likewise offered broad outlines of a broad range of initiatives. The most directly significant items for Australia seem to be efforts to cut over-capacity in coal and steel, both of which are central to the country’s China-oriented mining industry. Details on this and a host of other policy changes will be closely watched for their knock-on effects on Australian growth and, by extension, on RBA policy trends."

NZDUSD - "NZ 10yr Government Yields have declined from 3.617% in mid-December toward 2.901 this week. Given the data, it will be worth watching a move higher in yields that could signal a move of risk-on that may continue to lift up the NZD alongside an increasingly confident and stable RBNZ."

XAUUSD - "The simple removal of a bit of that emergency policy created risk aversion around the world that brought on questions of a globalized-coordinated recession. Sure, stock prices are still elevated, but how confident should one feel being invested in equities right now? Bond yields are pitifully low after six years of ZIRP, and any duration taken on will get absolutely crushed in a rising rate environment. And most Central Banks are actively looking to deflect capital flows. So where is an investor to go."

All the charts were made by using Metatrader 5 with free indicators from CodeBase.

[Sergey Golubev]

Technical Targets for EUR/USD by United Overseas Bank (based on the article)

EUR/USD: Ranging on reversal

Daily price is located within 100-day SMA and 200-day SMA waiting for the direction of the trend to be started.

• "We are sticking to view wherein only a daily closing above 1.1005/10 would shift the current neutral EUR outlook to bullish (closing was 1.1000 last Friday)."
• "That said, the undertone for this pair is positive and the odds for a sustained up-move in the coming days are rather high especially if we continue to hold above 1.0900."

RSI indicator is estimating the ranging trend to be continuing.  

• If the price will break 1.1067 resistance level on close D1 bar so the reversal of the price movement from the primary bearish to the primary bullish trend will be started.
  
• If price will break 1.0823 support on close daily bar so the bearish trend will be continuing.
  
• If not so the price will be ranging within the levels.
  

Resistance	Support
1.1067	1.0823
N/A	1.0777

• Recommendation to go short: watch the price to break 1.0823 support level for possible sell trade
• Recommendation to go long: watch the price to break 1.1067 resistance level for possible buy trade
• Trading Summary: ranging