Press review - page 406

[Sergey Golubev]

Trading News Events: Canada's Employment Change (adapted from the article)

"Despite forecasts for an uptick in the jobless rate, a 1.8K rebound in Canada Employment may heighten the appeal of the loonie and spur a near-term decline in USD/CAD as the data highlights an improved outlook for growth and inflation."

What’s Expected:



Why Is This Event Important:

"Even though the Bank of Canada (BoC) retains a cautious outlook for the real economy, Governor Stephen Poloz and Co. may stick to the sidelines throughout 2016 and show a greater willingness to gradually move away from its easing cycle especially as Prime Minister Justin Trudeau implements fiscal support to encourage a stronger recovery."

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USD/CAD Technical Analysis: bearish ranging near bullish reversal within narrow s/r levels waiting for direction

Daily price was on breakout with the bearish reversal: price broke Ichimoku cloud to below to be reversed to the primary bearish market condition. For now, the price is moved along one of the Senkou Span line for the bullish trend to be resumed or for the bearish trend to be continuing.

Absolute Strength indicator is estimating the ranging condition, and Trend Strength indicator is evaluating the trend as the primary bearish in the near future.

If D1 price will break 1.2654 support level on close bar so the primary bearish trend will be continuing with 1.2460 level as a possible bearish target.
If D1 price will break 1.3187 resistance level on close bar so the price will be reversed back to the bullish market condition.
If not so the price will be on ranging within the levels.

• Recommendation for long: watch close D1 price to break 1.3187 for possible buy trade
• Recommendation to go short: watch D1 price to break 1.2654 support level for possible sell trade
  
• Trading Summary: bearish ranging near bullish reversal
  

Resistance	Support
1.3187	1.2654
N/A	1.2460

SUMMARY : bearish

TREND : waiting to break the levels for direction

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Forecast for Q2'16 - levels for USD/CAD

Sergey Golubev, 2016.06.10 12:03

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USD/CAD M5: 85 pips price movement by Canada's Employment Change news event

[Sergey Golubev]

SILVER (XAG/USD) Technical Analysis: weekly ranging bearish, daily ranging bullish, 17.99 is the key level (adapted from the article)

Weekly price is located within 100 SMA/200 SMA and below 200 SMA for the ranging bearish market condition. The price is on ranging within 17.99 resistance and 15.80 support levels waiting for the primary bearish trend to be continuing or for the bullish reversal to be started.

• "The surge in silver prices continued yesterday as near-term momentum continued after the initial rally on last Friday’s awful NFPs. In our Thursday commentary, we noted the strong upward momentum ranking high among other rallies in recent years, and given its strength we expected further short-term gains, even if those gains were to come in a choppy fashion. The chop has yet to begin, but a pullback (perhaps the beginning of some chop) is not to be unexpected at this juncture.
  Silver is finding good resistance around the 17.31 level we had penciled in, so we will work with that as the first hurdle to overcome. Around 17.55 is the next top-side level to worry about, and then if things get really out of hand in the short-term we have the April peak at 18 (17.99 if you are counting pennies)."
• "At this time, we will wait for a pullback and see how the market reacts to it before making further assessments. Risk of a pullback has become quite elevated, and while chasing momentum might be tempting, the reward is not likely to outweigh the reward."
• "A decline back towards the 16.70/17 area would offer a spot for silver to reload for another drive higher. This zone represents solid support from April and May, while right around 17 itself is the upper parallel from the beginning of June. A drop below 16.70 would clearly undermine current momentum and alternate paths would need to be considered."

Resistance	Support
17.99	15.80
N/A	13.32

[Sergey Golubev]

Fundamental Weekly Forecasts for Dollar Index, NZD/USD, GBP/USD, USD/CAD, USD/CNH, USD/JPY, AUD/USD and GOLD (based on the article)

Dollar Index - "Aside from monetary policy, however, the general conditions of the market are increasingly important. The Dollar hasn’t resorted to its ultimate safe haven status in some time as the market’s complacency has afforded an unsteady peace in the markets. However the degree of concern beneath the surface is increasingly clear to the market rank. If confidence falters, the Dollar may (begrudgingly) return to its haven roots."

NZD/USD - "Despite the macro-prudential measures designed to offset continued gains in New Zealand real estate, it’s becoming increasingly unlikely that we’ll see a near-term rate cut out of the RBNZ until the situation changes. The short-term issue is global inflation continuing to lag and that’s surely continuing to effect the lack of inflation in the New Zealand economy, but the systemic concerns around a housing bubble can have far more grave consequences; and given the RBNZ’s recent stance, it appears unlikely that they’ll further that long-term risk of a deepening a housing bubble by molding policy to shorter-term needs."

GBP/USD - "What happens to the Sterling if the UK votes for “Brexit”? The short answer seems obvious—the GBP will fall. By how much? This question is substantially more complicated, but current FX Options prices suggest anywhere between 4-7 percent in one fell swoop. The ensuing uncertainty would almost certainly produce shockwaves beyond Britain’s shores and onto broader global financial markets, and modeling every possibility seems nearly impossible."

USD/CAD - "A minor data point compared to the inflation reading on Friday will be the Manufacturing Sales on Wednesday. The prior print of -0.9% MoM and 3.1% annualized will be a basis to compare Wednesday print. However, the print will be discounted given the large macro even south of the border when the Federal Reserve releases their June rate decision at 2:00 pm EST." 

USD/CNH - "The Federal Reserve’s next policy meeting will be held next week. As the Chinese currency become more market-driven, China’s most important counterpart, the US, has contributed to some of the largest moves to the Yuan pairs, such as the recent bout of Dollar weakness being driven by a disappointing non-farm payrolls print. Although the June rate hike is less likely, any clue that hints a July rate hike could largely affect the Dollar pairs, including the Dollar-Yuan. Other key US data, such as the May Industrial Production and the Jobless Claims, could affect the Dollar-Yuan pairs as well. China’s domestic Industrial Production and Retail Sales gauges may have limited impact on Yuan pairs unless we see a significant miss, as it has already been well-known that China’s manufacturing industries would have to take a quite long time (at least two years) to recover."

USD/JPY - "The BoJ may largely endorse a wait-and-see approach especially as Prime Minster Shinzo Abe delays the sale-tax hike and pledges to take ‘bold’ measures to encourage a stronger recovery, and more of the same from Governor Haruhiko Kuroda and Co. may boost the appeal of the Japanese Yen as market participants scale back bets for more non-standard measures. Moreover, a further deterioration in risk sentiment may also heighten the appeal of the low-yielding currency, and the weakening outlook for global growth may prop up the Yen as Japan returns to its historical role as a net-lender to the world economy."

AUD/USD - "May’s labor-market figures will be in the spotlight on the domestic front. A net 16.5k jobs gain is expected while the unemployment rate holds unchanged at 5.7 percent. Australian economic news-flow has increasingly improved relative to consensus forecasts since late April, opening the door for an upside surprise. Such an outcome may reinforce an image of the RBA that is in no hurry to resume the rate cut cycle, a presumably supportive proposition for the currency."

GOLD (XAU/USD) - "On the back of last month’s dismal Non-Farm Payroll report, expectations for the timing of Fed normalization have been pushed out with markets now pricing in the first rate hike to be in February of 2017. If the Fed projections are adjusted to reflect market expectations, look for the repricing to remain supportive of gold prices as concerns about domestic growth, a material slowdown in China and the upcoming UK referendum continue to set a high bar for the possibility off Fed tightening."

[Sergey Golubev]

Weekly Outlook: 2016, June 12 - June 19 (based on the article)

The US dollar was on the back foot, but the managed to recover some of the losses. Inflation data in the UK and the US, Employment data from the UK and Australia, US retail sales and no less than 4 rate decisions,with the Federal Reserve standing out from the crowd. These are the main events for this busy week.

1. UK Inflation data: Tuesday, 8:30. A monthly rise of 0.4% is expected.
2. US retail sales: Tuesday, 12:30. For the month of May, both headline and core figures carry expectations of a rise of 0.4%.
3. UK jobs report: Wednesday, 8:30. The unemployment rate for April is expected to remain at 5.1% and average hourly earnings are predicted to rise 1.7%.
4. US PPI: Wednesday, 12:30. Headline PPI is expected to rise by 0.3% and core PPI by 0.1%.
5. US Fed decision: Wednesday, statement and forecasts at 18:00, press conference at 18:30.
6. Australian employment data: Thursday, 1:30. A gain of 15.1K jobs is expected and the unemployment rate is unlikely to change.
7. Japan rate decision: Thursday.
8. Swiss rate decision: Thursday, 7:30. Even lower negative rates could hit the franc, but it seems unlikely at the moment.
9. UK rate decision: Thursday, 11:00. Carney voiced his concern that a vote to leave the EU could change the outlook for output and inflation, prompting a change in monetary policy.
10. US inflation data: Thursday, 12:30. Headline inflation is expected to rise by 0.3% and core inflation by 0.2%.
11. US Philly Fed Manufacturing Index: Thursday, 12:30. 
12. US Unemployment Claims: Thursday, 12:30. Claims are expected to stand at 267K this time.
13. US Building Permits: Friday, 12:30. 
14. Mario Draghi speaks: Friday, 15:00. ECB President Mario Draghi will speak in Munich.

[Sergey Golubev]

Fed-BOE-BOJ Rates, Apple Meeting, Brexit: Week Ahead June 13-18 (based on the article)

• "Federal Reserve policy makers probably will hold off on raising interest rates in the coming week as they assess the U.S. economy after weak May employment numbers and tepid first-quarter growth. Follow the TOPLive blog for real-time coverage here."
• "Monetary policy makers also are meeting in the U.K. and Japan, and analysts expect both to keep their rates unchanged. Five other nations make interest rate decisions."

[Sergey Golubev]

USD/CNH Intra-Day Fundamentals: China Industrial Production and 54 pips price movement

2016-06-13 02:00 GMT | [CNY - Industrial Production]

• past data is 6.0%
• forecast data is 6.0%
• actual data is 6.0% according to the latest press release

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

[CNY - Industrial Production] = Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

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"Industrial output in China was up 6.0 percent on year in May, the National Bureau of Statistics said on Monday - in line with expectations and unchanged from the previous month."

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USD/CNH M5: 54 pips price movement by China Industrial Production news event

[Sergey Golubev]

EUR/USD Price Action Analysis - bullish ranging near 50.0% Fibo level for the secondary daily correction to the possible bearish reversal

Daily price is above 200 SMA and near-and-above 100 SMA for the bullish market condition with the ranging within Fibo resistance level at 1.1415 and Fibo bearish reversal level at 1.1070.

• The price is testing 50.0% Fibo support level at 1.1245 to below for the secondary correction to be started with 1.1070 level as a next target for the bearish reversal.
• "The Euro reversed sharply lower against the US Dollar, producing the largest two-day losing streak in nearly four monthsafter finding resistance above the 1.14 figure. Prices have now erased over half of the advance triggered by May’s soft US jobs data."
• "From here, a daily close below support at 1.1217, the 38.2% Fibonacci expansion, opens the door for a test of the 1.1145-56 area marked by a rising trend line set from December 2015 and the 50% level. Alternatively, a reversal above the 23.6% Fib at 1.1293 paves the way for a test of the 14.6% expansion at 1.1340."
• "An actionable trade setup appears to be absent at this time. On one hand, prices are too close to support to justify entering short from a risk/reward perspective. On the other, the absence of a discrete bullish reversal signal suggests taking up the long side is premature. Waiting on the sidelines appears to be prudent."

Resistance	Support
1.1415	1.1245
1.1615	1.1070

If the price will break Fibo support level at 1.1070 so the reversal of the price movement from the primary bullish to the primary bearish market condition will be started.
If the price will break Fibo resistance level at 1.1415 from below to above so the primary bullish trend will be continuing with good possible breakout of the price movement up to 1.1615 as a possible bullish target.
If not so the price will be ranging within the levels.

Trend:

D1 - ranging bullish near bearish reversal area

[Sergey Golubev]

Fitch Rating - the outlook was lowered to "Negative" from "Stable" (from the article)

• "The Outlook revision primarily reflects Fitch's decreased confidence in the Japanese authorities' commitment to fiscal consolidation," the agency said.
• "The Japanese government announced on 1 June that it had decided to delay a scheduled increase in the consumption tax from April 2017 until October 2019 (having already delayed the hike from the original date of October 2015), and did not identify any specific offsetting measures. The Outlook revision primarily reflects Fitch's decreased confidence in the Japanese authorities' commitment to fiscal consolidation."

[Sergey Golubev]

Trading News Events: U.K. Consumer Price Index (adapted from the article)

• "A pickup in the headline & core U.K. Consumer Price Index (CPI) may spark a near-term rebound in GBP/USD as it puts pressure on the Bank of England (BoE) to normalize monetary policy sooner rather than later."
• "Even though the economic outlook remains clouded by the U.K. Referendum on June 23, signs of heightening price pressures may encourage the BoE to adopt a more hawkish tone for monetary policy as Governor Mark Carney and Co. see a risk of overshooting the 2% inflation-target over the policy horizon."

What’s Expected:

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GBP/USD Technical Analysis: daily bearish breakdown, intra-day ranging bearish

GBPUSD D1: bearish breakdown. The daily price is on bearish market condition: price broke Ichimoku cloud to below for good breakdown with 1.4130 support level. Absolute Strength indicator and Trend Strength indicator are estimating the bearish trend to be continuing.

If the price breaks 1.4130 support to below on close D1 bar so the bearish breakdown will be continuing.
If the price breaks Senkou Span line at 1.4480 to above so the reversal of the price movement to the primary bullish condition will be started.
If not so the price will be on ranging bearish within the levels.

GBPUSD H4: bearish ranging within narrow levels. The price is on bearish condition for the ranging within narrow support/resistance levels: 1.4130 support and 1.4327 resistance.

If the price breaks 1.4130 support to below on close H4 bar so the bearish trend will be continuing.
If the price breaks 1.4327 resistance to above so the local uptrend as the bear market rally will be started.
If not so the price will be on ranging bearish within the levels.

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Forecast for Q2'16 - levels for GBP/USD

Sergey Golubev, 2016.06.14 08:53

GBP/USD M5: 36 pips range price movement by U.K. CPI news event

[Sergey Golubev]

EUR/USD Intra-Day Fundamentals: U.S. Retail Sales and 10 pips price movement

2016-06-14 12:30 GMT | [USD - Retail Sales]

• past data is 1.3%
• forecast data is 0.4%
• actual data is 0.5% according to the latest press release

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

[USD - Retail Sales] = Change in the total value of sales at the retail level.

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CNBC reported:

• "U.S. retail sales rose more than expected in May as Americans bought automobiles and a range of other goods, suggesting economic growth was gaining steam despite a sharp slowdown in job creation."
• "The Commerce Department said on Tuesday retail sales increased 0.5 percent last month after surging by an unrevised 1.3 percent in April. It was the second straight month of gains and lifted sales 2.5 percent from a year ago."

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EUR/USD M5: 10 pips price movement by U.S. Retail Sales news event