Press review - page 423

[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD, AUD/USD, NZD/USD and USD/CNH: ADP Non-Farm Employment Change

2016-08-03 12:15 GMT | [USD - ADP Non-Farm Employment Change]

• past data is 176K
• forecast data is 171K
• actual data is 179K according to the latest press release

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

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

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EUR/USD M5: 13 pips range price movement by ADP Non-Farm Employment Change news event

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AUD/USD M5: 18 pips price movement by ADP Non-Farm Employment Change news event

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NZD/USD M5: 18 pips price movement by ADP Non-Farm Employment Change news event

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USD/CNH M5: 41 pips price movement by ADP Non-Farm Employment Change news event

[Sergey Golubev]

AUD/USD Intra-Day Fundamentals: Australian Retail Sales and 29 pips range price movement

2016-08-04 01:30 GMT | [AUD - Retail Sales]

• past data is 0.2%
• forecast data is 0.3%
• actual data is 0.1% according to the latest press release

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

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

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• The trend estimate rose 0.2% in June 2016. This follows a rise of 0.2% in May 2016 and a rise of 0.2% in April 2016.
• The seasonally adjusted estimate rose 0.1% in June 2016. This follows a rise of 0.2% in May 2016 and a rise of 0.1% in April 2016.
• In trend terms, Australian turnover rose 3.1% in June 2016 compared with June 2015.

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AUD/USD M5: 29 pips range price movement by Australian Retail Sales news event

[Sergey Golubev]

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

H4 price is located near and above 200 SMA: the price is on secondary correction within the primary bullish market condition within the following key reversal support/resistance levels:

• 1.1233 resistance level located above 100 SMA/100 SMA reversal area in the bullish trend to be continuing, and
• 1.1105 support level located on 200 SMA on the border between the primary bearish and the primary bullish trend on the chart.

Descending triangle pattern was formed by the price to be crossed for the correction to be continuing.

Daily price. United Overseas Bank is expecting for EUR/USD to be continuing with the ranging condition to be above 1.1215 for some short period of time:

"While the stop-loss for our bullish EUR view  is still intact at the time of writing, the unexpected sharp drop yesterday clearly indicates an increased risk of a short-term top. A move below 1.1130 would shift the outlook to neutral and suggest a period of broad sideway consolidation has started. This appears likely unless EUR can move and stay above 1.1215 within these 1 to 2 days."

• If daily price breaks 1.1233 resistance level on close bar so the bullish trend will be continuing.
  
• If daily price breaks 1.1059 support level on close bar so the primary bearish reversal will be started.
• If not so the price will be ranging within the levels.

[Sergey Golubev]

GBP/USD Intra-Day Fundamentals: BoE Official Bank Rate and 165 pips price movement

2016-08-04 11:00 GMT | [GBP - Official Bank Rate]

• past data is 0.50%
• forecast data is 0.25%
• actual data is 0.25% according to the latest press release

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

[GBP - Official Bank Rate] = Interest rate at which the BOE lends to financial institutions overnight.

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Bank of England cuts Bank Rate to 0.25% and introduces a package of measures designed to provide additional monetary stimulus.

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GBP/USD M5: 165 pips price movement by BoE Official Bank Rate news event

[Sergey Golubev]

AUD/USD Intra-Day Fundamentals: RBA Monetary Policy Statement and 26 pips price movement

2016-08-05 01:30 GMT | [AUD - RBA Monetary Policy Statement]

• past data is n/a
  
• forecast data is n/a
  
• actual data is n/a according to the latest press release

[AUD - RBA Monetary Policy Statement] = It provides valuable insight into the bank's view of economic conditions and inflation - the key factors that will shape the future of monetary policy and influence their interest rate decisions.

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From the article:

"But we interpret the larger number of risks to the outlook and the RBA’s forecast that average underlying inflation would be stuck at the bottom of the 2-3% target band by the end of 2018 as a strong easing bias.

Our base case is that rates remain on hold at 1.5%, but we see a clear risk of further cuts given the RBA expects persistently low inflation and with banks passing on only half of this week’s rate cut to home loan customers. The AUD is also important given the RBA thinks it still poses a “significant source of uncertainty” around the outlook.

In our view, today’s statement reinforces this risk. With the cash rate now close to the 1% floor for the cash rate, we think the RBA would be looking more closely at unconventional options if downside risks to the outlook materialise."

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AUD/USD M5: 26 pips price movement by RBA Monetary Policy Statement news event

[Sergey Golubev]

Trading News Events: U.S. Non-Farm Payrolls (adapted from the article)

• "Another 180K expansion in U.S. Non-Farm Payrolls (NFP) accompanied by a downtick in the jobless rate may boost the appeal of the greenback and trigger further losses in EUR/USD as it puts pressure on the Federal Open Market Committee (FOMC) to further normalize monetary policy in 2016."
• "Even though Fed Funds Futures highlight a 12% probability for a September rate-hike, a further improvement in labor market dynamics may encourage central bank officials to adopt a more hawkish outlook for monetary policy as the U.S. economy approaches ‘full-employment.’’"

Bullish USD Trade

• "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

• "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."

Daily price is located between 100 SMA and 200 SMA for the ranging market condition waiting for the direction within the following key reversal support/resistance levels:

• 1.1233 resistance located above 200 SMA and near 100 SMA on the beginning of the bullish trend to be resumed, and
• 1.1072 support level located near 200 SMA in the beginning of the bearish trend to be started on the chart.

RSI indicator is estimating the ranging bullish market condition with the possibility to the bearish reversal.

• If the price will break 1.1233 resistance level on close daily bar so the primary bullish trend will be resumed.
  
• If price will break 1.1072 support on close daily bar so the reversal of the price movement from the ranging bullish to the primary bearish trend will be started.
  
• If not so the price will be ranging within the levels.

[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD and Dollar Index: Non-Farm Payrolls

2016-08-05 12:30 GMT | [USD - Non-Farm Employment Change]

• past data is 287K
• forecast data is 180K
• actual data is 255K 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 rose by 255,000 in July, and the unemployment rate was unchanged at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, and financial activities. Employment in mining continued to trend down."

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EUR/USD M5: 66 pips price movement by Non-Farm Payrolls news event

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Dollar Index M5: price movement by Non-Farm Payrolls news event

[Sergey Golubev]

Weekly Outlook: 2016, August 07 - August 14 (based on the article)

US Crude Oil Inventories, Rate decision in New Zealand, US Unemployment Claims, German GDP data, US Retail sales, Producer prices and Consumer sentiment. These are the major events on forex calendar.

1. US Crude Oil Inventories: Wednesday, 14:30. Oil prices edged up more than 3%, with U.S. crude futures returning to above $40 a barrel.
2. New Zealand rate decision: Wednesday, 21:00. The central bank is expected to cut rates to 2.00% this time.
3. US Unemployment Claims: Thursday, 12:30. The number of claims is expected to reach 272,000 this week.
4. German GDP data: Friday, 6:00. German GDP is expected to grow by 0.3% in the second quarter.
5. US Retail sales: Friday, 12:30. Economists expect retail sales to gain 0.4% in July while core sales are expected to rise 0.2%.
6. US PPI: Friday, 12:30. Producer prices are expected to gain 0.1% this time.
7. US Prelim UoM Consumer Sentiment: Friday, 14:00. Consumer sentiment is expected to rise to 1.5 in August.

[Sergey Golubev]

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

Dollar Index - "The global market will significantly downshift its scheduled contribution to the Dollar. Over the past few weeks, one of the key sources of Greenback motivation would come from the easing efforts of global central banks. The BoJ increased its stimulus program, the RBA cut rates and the BoE revived its QE program in a new post-Brexit program. Aside from the RBNZ and a few emerging market central bank meetings scheduled over the coming week, there is little in the way of comparable counterweight motivation."

GBP/USD - "The long-term downward trend in GBP/USD may reassert itself over the days ahead as the pair fails to preserve the wedge/triangle formation carried over from the previous month, and the continuation pattern foreshadows further losses for Cable especially as it carves a new series of lower highs & lows in August. With that said, the next downside region of interest comes in around 1.2920 (100% expansion) to 1.2950 (23.6% expansion), with a break of the July low (1.2788) opening up 1.2630 (38.2% expansion)."

USD/JPY - "Will BOJ Governor Kuroda point to further policy easing at the bank’s September meeting? Its July statement said the bank would perform a “comprehensive assessment” on the effectiveness of its inflationary monetary policies in September. Such a statement suggests that officials knew the July announcement would come as a disappointment. And yet officials’ reluctance to act more aggressively underlines their hesitation on further policy easing."

AUD/USD - "This week was full of key economic data for Australia including the Trade Balance, Building Approvals, the RBA Cash Target Rate, and Retail Sales. As you can imagine, the headliner was the RBA cash rate cut of 25bps from 1.75% to 1.50%. Despite the cut, the lack of guidance showing a preference for another cut in light of a rather robust local economy has supported the Australian Dollar across the board. Additionally, the RBA failed (likely on purpose) to downgrade the inflation forecast any further, and didn’t seem bothered by the appreciating AUD as they had in the past."

USD/CNH - "Consumer Price Index (CPI) is one of the most important gauges for China’s economy, as a low read may increase the odds of the PBOC adopting a more dovish monetary policy. Although China may be contending with an increasing risk of asset bubbles with China’s Central Bank less likely to cut benchmark rates or introduce aggressive easing measures, a weak CPI reading could open room for PBOC to make policy tweaks in the future when investment conditions improve. The CPI read for July is expected to drop to 1.8% according to Bloomberg, or even lower to 1.7% according to Chinese institutions; both distant from the target-level for CPI of 3.0%."

GOLD (XAU/USD) - "More interesting for the long-Gold thesis is the Jackson Hole Summit scheduled for August 25th-27th. This is when the foremost economic minds will meet in Wyoming to discuss global economic issues. This will include numerous Central Bankers from the U.S. and international Central Banks, finance ministers, academics and many other financial market participants. Given that many economies around the world are struggling with similar issues, with few Central Banks wanting capital flows driving the value of their currency higher, this represents an interesting opportunity for Gold bulls."

[Sergey Golubev]

From wikipedia:

"The chart below provides a full summary of all applying exchange-rate regimes for EU members, since the European Monetary System with its Exchange Rate Mechanism and the related new common currency ECU was born on 13 March 1979. The euro replaced the ECU 1:1 at the exchange rate markets, on 1 January 1999. During 1979-1999, the D-Mark functioned as a de facto anchor for the ECU, meaning there was only a minor difference between pegging a currency against ECU and pegging it against the D-mark."