Press review - page 474

[Sergey Golubev]

Bitcoin Price Crashes as China’s PBOC Performs “On-Site Checks” of Major Exchanges (based on the article)

• "China’s central bank - the People’s Bank of China - has revealed that it carried out on-site checks on major Chinese bitcoin exchanges in Beijing and Shanghai."
• "In a public notice, the Shanghai branch of the PBOC revealed it carried out spot checks on BTC China."

From official statement:

The People’s Bank of China Shanghai HQ, the Shanghai Municipal Finance Office and other units formed a joint inspection team to carry out site inspections on Bitcoin China, focusing on checking whether it was operating beyond its business scope, whether it was engaging in unlicensed forex, payment, financing and other related businesses; whether it engaged in market manipulation; implementing anti-money laundering, financial security risks and so on. 

H4 intra-day price broke 100 SMA/200 SMA reversal area for the bearish breakdown: the price is on testing with 743 support level for the bearish trend to be continuing.

[Sergey Golubev]

Chinese Currency: Keeping the masses happy (based on the article)

• "The natural direction for the yuan, if it were allowed to float, would be significantly lower against the US dollar than it is today. The Chinese are manipulating their currency, but they are manipulating it to maintain its current value and allow it to slowly fall to its natural rate." 
• "Further, some $2 trillion worth of Chinese currency has been converted into dollars and moved offshore in the last few years. Think about that in the context of quantitative easing and realize that individual Chinese sloshing money around the developed world impact the global economony to the same extent central banks do." 
• "The US is the world’s largest economy because we create most of our own supply and demand. It took us many decades to reach that point; China is trying to do it in about two decades. Their export-heavy model can’t work much longer, but they don’t yet have a way to create sustainable internal demand." 

By the way, the weekly pric is still on bullish trend located above 200 period SMA: the price was bounced from 6.9867 resistance level to below for the secondary ranging within 6.98/6.78 levels.

[Sergey Golubev]

Dollar Index Technical Analysis: daily correction within the primary bullish trend; 100.72 is the key support level to watch (based on the article)

Daily price is located above Ichimoki cloud in the bullish are of the chart: the price was bounced from 103.82 resistance level to below for the secondary ranging correction to be started within the primary bullish market condition. Descending triangle pattern was formed by the price tobe crossed for the correction to be continuing, and Absolute Strength indicator is evaluating the trend as the ranging in the near future.

• "The US Dollar has taken a surprising step back as many anticipated the strong move that ended 2016 would carry through in early 2017. However, we have since seen a pull-back that is worth watching as a deeper setback could cause many of the long positions to bail out on the trade, which could have the effect of removing short-term support for USD."
• "DXY trading between the second half of Q3 2016 to today has remained well within the price channel on the chart below drawn with Andrew’s Pitchfork. The handle is drawn off an extreme momentum low in early June. You can also see that the late December price action rubbed against the top of the channel before breaking down, which now turns our attention to the bottom of the rising channel near 100.00/50 to see if we get a strong bounce. If we do, we can assume that the strong trend in USD is resuming." 

[Sergey Golubev]

EUR/USD Rally (based on the article)

• "The EUR/USD is trading back towards key points of daily resistance, after German GDP figures beat expectations. German GDP (YoY) was expected at 1.8%, but released at 1.9%. This move has now led to a two day rally for the pair spanning 231 pips." 
• "Technically the EUR/USD is trading higher, but quickly running into resistance. As seen in the graph below, the pair is currently testing a 61.8% Fibonacci retracement level found at 1.0669. This measurement has been found by taking the distance between the December 8th high at 1.0873 and the January 3rd low at 1.0340." 

[Sergey Golubev]

S&P 500 Technical Analysis: daily ranging for direction (based on the article)

Daily price is continuing with the ranging condition within the primary bullish trend: the price is located above Ichimoku cloud in the bullish area of the chart for the ranging within 2,282 resistance level for the bullish trend to be continuing and 2,233 support level for the secondary correction to be started./

• "The S&P 500 continues to chop sideways, building what appears, as we’ve been discussing recently, a base for an eventual breakout to new highs. Yesterday, the market started out on a negative note, dropping through the trend-line rising up off the November low, but by day’s end the decline was met with buying and closed back above. The rejection and recovery is a good sign for the market. The day low also happened to come around a top-side trend-line extending over peaks in 2007 and 2015, but hasn’t been discussed much due to how long-term it is. However, with the market now abiding by it on two occasions – once in the middle of December and then yesterday – it’s in play."
• "The other day, we briefly discussed the possibility of the market forming a double-top (12/13, 1/6 highs), but only if aggressive selling were able to clear a path lower. So far not the case."
• "The month-long consolidation now resembles a continuation-style inverse head-and-shoulders formation; marked by two declines in December and yesterday’s decline and reverse. It’s not the ‘cleanest’ looking pattern, but nevertheless one on the table. A close above the Jan 6 high would trigger the neck-line and kick off the pattern into new record territory. Based on the depth of the inverse H&S, a measured move target arrives around 2320. These continuation-style patterns many times lead to a turning point which results in a material retracement, so we'll be on the look-out for signs of a reversal should we start extending higher."

[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD, GBP/USD and NZD/USD: U.S. Producer Price Index and Advance Retail Sales

2017-01-13 13:30 GMT | [USD - PPI]

• past data is 0.4%
• forecast data is 0.1%
• actual data is 0.3% according to the latest press release

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

[USD - PPI] = Change in the price of finished goods and services sold by producers.

==========

From official report:

"The Producer Price Index for final demand increased 0.3 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.4  percent in November and were unchanged in October. (See table A.) On an unadjusted basis, the final demand index climbed 1.6 percent in 2016 after falling 1.1 percent in 2015."

==========

2017-01-13 13:30 GMT | [USD - Retail Sales]

• past data is 0.2%
• forecast data is 0.5%
• actual data is 0.6% 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. 

========== 

EUR/USD M5: 54 pips range price movement by U.S. Producer Price Index and Advance Retail Sales news events

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GBP/USD M5: 42 pips range price movement by U.S. Producer Price Index and Advance Retail Sales news events

========== 

NZD/USD M5: 27 pips range price movement by U.S. Producer Price Index and Advance Retail Sales news events

[Sergey Golubev]

Weekly Outlook: 2017, January 15 - January 22 (based on the article)

The dollar was under pressure in a turbulent week that saw President-Elect Trump’s press conference. He will enter the White House in the upcoming week. In addition, we have speeches from Mark Carney and Janet Yellen, Inflation data in the UK and the US, Employment data in the UK and Australia and rate decisions in Canada and the euro-zone.  

 

1. Mark Carney speaks: Monday, 19:30. BOE Governor Mark Carney will speak in London. Market volatility is expected.
2. UK inflation data: Tuesday, 9:30. The Bank of England expects inflation to continue to rise during 2017 to 2.7% and remain above the 2% target until 2020.
3. UK Employment data: Wednesday, 9:30. 
4. US Inflation data: Wednesday, 13:30. 
5. Canadian rate decision: Wednesday, 15:00. The Canadian dollar is losing strength and household imbalances have risen once again.
6. Janet Yellen speaks: Wednesday, 21:00. Federal Reserve Chair Janet Yellen will speak in San Francisco. Market volatility is expectd.
7. Eurozone rate decision: Thursday, 12:45. The bank has prolonged the bond-buying program by nine months until the end of 2017, indicating the central bank does not intend to abandon its plans to boost the Eurozone’s economy.
8. US Building Permits: Thursday, 13:30. Economists expect housing to continue growing despite rising mortgage rates after Trump’s election.
9. US Philly Fed Manufacturing Index: Thursday, 13:30.
10. US Unemployment Claims: Thursday, 13:30. 
11. US Crude Oil Inventories: Thursday, 16:00. 

[Sergey Golubev]

Weekly Fundamental Forecast for Dollar Index (based on the article)

Dollar Index - "Going into the new year, the standby narrative envisioned accelerating growth and bubbling inflation powered by a hefty dose of fiscal stimulus championed by the President-elect. This would spur the Fed to adopt a steeper rate hike path. Not surprisingly, this proved to be overwhelmingly supportive for the greenback and pushed it to the highest level in 14 years."

[Sergey Golubev]

Weekly Fundamental Forecast for USD/JPY (based on the article)

USD/JPY - "Fresh comments from New York Fed President William Dudley, Minneapolis Fed President Neel Kashkari, Chair Janet Yellen and Philadelphia Fed President Patrick Harker may also heighten the appeal of the greenback as the 2017-voting members are scheduled to speak over the days ahead, and the group of central bank officials may endorse a more hawkish outlook for monetary policy as ‘‘the staff's forecast for real GDP growth over the next several years was slightly higher, on balance, largely reflecting the effects of the staff's provisional assumption that fiscal policy would be more expansionary in the coming years.’ In turn, Fed Fund Futures may continue to highlight bets for a June rate-hike, with market participants currently pricing a greater than 60% probability for a move ahead of the second-half of the year, but more of the same from central bank officials accompanied by another set of mixed data prints may drag on interest rate expectations and generate a more meaningful pullback in USD/JPY."

[Sergey Golubev]

Weekly Fundamental Forecast for GBP/USD (based on the article)

GBP/USD - "On Tuesday, we’ll finally get some element of clarity on the matter from PM Theresa May when she delivers a speech designed to lay out her plans for Britain’s execution of Brexit. Just before Christmas, Theresa May told senior Members of Parliament that she would make a speech in the new year to share those plans and strategies to ‘forge a truly global Britain that embraces and trades with countries across the world.’ This is that speech; but more recent indications from PM May have appeared to indicate that a Hard Brexit may be more likely – as she’s laid out the priorities of taking control of immigration and leaving the jurisdiction of the European Court of Justice. Notice that within those priorities is not ‘access to the single market,’ and this has many concerned that the execution of Brexit may be more acrimonious than initially-feared. But the combination of these two very relevant, yet opaque drivers for the British Pound and the U.K. can present a daunting back-drop for near-term trend identification in GBP-pairs. As such, the forecast on the British Pound will be set to neutral for the week ahead until more clarity is had on Brexit and inflationary pressure within the U.K. economy."