Press review - page 538

[Sergey Golubev]

Brent Crude Oil - bear market rally to the daily bullish reversal; 49.88 is the key (based on the article)

Daily price is on bear market rally by Senkou Span line of Ichimoku indicator to be testing for the reversal to the primary bullish market condition. If the price breaks ascending triangle pattern to above together with 49.88 resistance level on daily close bar so the bullish reversal will be started with 54.64 nearest level as the daily re-enter target; ottherwise - ranging bearish within the levels.

• "On Wednesday, after the EIA released the data that Crude Inventories declined by 4.73m barrels and that Saudi was delivering less crude, holding true to their comittment may act as a force for higher prices. Of course, as we continue to see in Friday’s Baker Hughes data, UUS production continues to push higher and acts as a road block for a significant price recovery. However, as we see increased gasoline demand (+2.1% YoY), a weaker USD and an overall supportive report from the EIA, it’s worth it to keep an eye on the charts to see if a breakout could be in the works. "
• "There are a handful of technical highlights to watch for that would act as catalysts for a Bullish recovery if the price exceeds. First, the opening range high for the 2nd half of 2017 (first two weeks of July) sits $47.29, Second, the combination of the daily Ichimoku Cloud and Bearish price channel (downward sloping – red) align near $48.20-$47.50. Lastly, the 61.8% Fibonacci Retracement of the May to June range rests at $48.20. A break above the zone $47.29-$48.20 on a daily closing basis should be watched to combine with a desperately awaited Oil recovery."
• "While the dots may be in place to be connected, it’s worth noting that without a price recovery, these points mentioned above (Saudi cutting back on US exports, increased Gasoline demand, 4.7m barrel inventory draw), remain unfulfilled anecdotes to a Bullish thesis. Lastly, we have seen a strong move off long-term support, which could also show that should a break above $48.20 develop, a base may be set. Maybe. A reversal lower from resistance would turn attention back to long-term support at $43.50/42 per barrel."

[Sergey Golubev]

EUR/USD Intra-Day Fundamentals: ECB Minimum Bid Rate and range price movement 

2017-07-20 12:45 GMT | [EUR - Minimum Bid Rate]

• past data is 0.00%
• forecast data is 0.00%
• actual data is n/a according to the latest press release

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

[EUR - Minimum Bid Rate] = Interest rate on the main refinancing operations that provide the bulk of liquidity to the banking system. 

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From official report :

• "At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases."
• "Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the current monthly pace of €60 billion, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases are made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration."

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EUR/USD M5: range price movement by ECB Minimum Bid Rate news event 

[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD, USD/JPY, Dollar Index and Bitcoin/USD: Philadelphia Fed Business Outlook Survey

2017-07-20 13:30 GMT | [USD - Philly Fed Manufacturing Index]

• past data is 27.6
• forecast data is 23.4
• actual data is 19.5 according to the latest press release

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

[USD - Philly Fed Manufacturing Index] = Level of a diffusion index based on surveyed manufacturers in Philadelphia.

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From official report :

• "The index for current manufacturing activity in the region decreased from a reading of 27.6 in June to 19.5 this month (see Chart 1). The index has been positive for 12 consecutive months, but July’s reading is the lowest since November. Thirty-seven percent of the firms indicated increases in activity in July, down from 42 percent last month. The shipments index decreased 16 points, while the new orders index fell 24 points. Nearly 31 percent of the respondents reported a rise in new orders this month, down from 45 percent in June. Both the delivery times and unfilled orders indexes were positive for the ninth consecutive month, suggesting longer delivery times and increases in unfilled orders."
• "Firms reported overall increases in manufacturing employment this month, but the current employment index fell 5 points. The index has been positive for eight consecutive months. The percentage of firms reporting an increase in employment was 17 percent, while 6 percent reported a decrease. The average workweek index has been positive for nine consecutive months but decreased 17 points."

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Dollar Index M5: range price movement by Philadelphia Fed Business Outlook Survey news events

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EUR/USD M5: range price movement by Philadelphia Fed Business Outlook Survey news events

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USD/JPY M5: range price movement by Philadelphia Fed Business Outlook Survey news events

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BTC/USD M5: range price movement by Philadelphia Fed Business Outlook Survey news events

[Sergey Golubev]

S&P 500 - intra-day bullish breakout; 2,476 is the key (based on the article)

H4 intra-day price was bounced from Senlou Span line of Ichimoku indicator to above for the bullish area of the chart. The price is on testing with resistance level at 2,476 for the bullish trend to be continuing.

• "Yesterday’s move higher showed not only good buying interest, but was also enough to push the S&P beyond the first line of resistance we had marked in by way of the March top-side trend-line. No issues at all pushing on through. We’ll look to see how the market responds to it on any dip which may unfold from here. The move higher now brings the underside of the November slope into play. As stated the other day, both of these overhead lines given they are running with the direction of the prevailing trend, are not viewed as the most steadfast forms of resistance. But potential resistance, nevertheless. With that said, if the market is ready to launch higher in a similar fashion as it did during February we may see the S&P tear through the November slope with relative ease."
• "But again, to reiterate, not a big fan on this end of paying up into momentum; choosing, rather, to buy on dips. This means those traders looking to get long may have to be nimble and establish positions on intra-day dips and single-day declines (Keep in mind the March top-side trend-line as first potential support.) Overall, risk reward at this moment is not the most compelling."

[Sergey Golubev]

Trading the News: Canada Consumer Price Index (CPI) (based on dailyfx article)

Signs of softer-than-expected inflation may push the BoC to the sidelines as ‘very strong growth of the first quarter is expected to moderate over the balance of the year,’ and Governor Stephen Poloz and Co. may endorse a wait-and-see approach at the next meeting on September 6 as ‘geopolitical uncertainty still clouds the global outlook.’
Nevertheless, stickiness in the core rate of inflation accompanied by a further expansion in household consumption may encourage the BoC to adopt a more hawkish tone as ‘the output gap is now projected to close around the end of 2017, earlier than the Bank anticipated in its April Monetary Policy Report (MPR).’ In turn, BoC officials may continue to implement higher borrowing-costs over the coming months as the central bank expect to achieve the 2% target for price growth by the middle of 2018.

What’s Expected:

Why Is This Event Important:

Canada’s Consumer Price Index (CPI) slipped to an annualized 1.3% in May from 1.6% the month prior, while the core rate of inflation held steady at 1.3% per annum amid forecasts for a 1.4% print. A deeper look at the report showed the decline was largely led by lower energy prices, with transportation costs narrowing 0.7% in May, while prices for clothing and footwear bounced back 0.5% after contracting 1.1% in April. The Canadian dollar lost ground following the softer-than-expected inflation report, with USD/CAD turning around ahead of the 1.3200 handle to end the day at 1.3268.

How To Trade This Event Risk

Bearish CAD Trade: Canada Inflation Report Continues to Disappoint

• Need a green, five-minute candle following the report to consider a long USD/CAD position.
• If market reaction favors a bearish loonie trade, buy USD/CAD with two separate lots.
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to breakeven on remaining position once initial target is met, set reasonable limit.

Bullish CAD Trade: Headline & Core CPI Exceed Market Expectations

• Need a red, five-minute USD/CAD candle to consider a long loonie position.
• Implement the same setup as the bearish loonie trade, just in reverse.

USD/CAD Daily

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[Sergey Golubev]

Dollar Index - daily bearish breakdown (based on the article)

Price on the daily chart is on promary bearish breakdown by the descending triangle pattern to be broken to below together with 93.88 support level for the bearish trend to be continuing.

• "2017 is a great year for risk as it seems equity traders see no need for a sell button, but the same can’t be said for the USD. Developed market FX has been having a field day with USD over the session and today’s drop brings the total loss for 2017 for the DXY to 10%. The key technical support many are now watching is the 2016 low near 92. Much of the weakness due to the 57.6% weighting of the EUR in the DXY is the impressive EUR strength. Whatever the reason, the pressure is likely to remain. Per the CFTC, institutional speculators (hedge funds) are holding their largest net short position in the Dollar Index since 2013 before the Taper Tantrum erupted and Bernanke put the pacifier back in the market’s mouth."
• "One way that many traders were playing USD weakness was via the AUD, which was trading at 2-year highs earlier in the week. On Friday morning, RBA’s Guy Debelle took some enthusiasm out of the trade by saying the revelation in the RBA minutes this week that the neutral rate has shifted higher is not predictive of a future rate increase. On that announcement, AU sovereign bonds went bid falling ~4%, and the AUD was sold across the board. However, looking at the macro picture, risk-on currencies like the commodity bloc and EMFX still appear a favorable way to play USD weakness."

[Sergey Golubev]

EUR/USD - bullish breakout; 1.1682 is the key (based on the article)

Daily price is on bullish breakout by 1.1682 resistance level to be crossing to above for the bullish breakout trend to be continuing.

• "Heading into last week and the ECB meeting we held a bullish outlook for the euro, with eyes for the 2016 high over 11600, and on a push through that level would bring into play the August 2015 high sitting just north of 11700. To close out last week the euro finished between the two eyed thresholds. The path of least resistance is clearly higher, but from a risk/reward perspective chasing the current up-move into resistance without a correction isn’t particularly attractive. At any point here we could at the least see a minor retracement if not something more. However, with that said, when a trend gains as much traction as EURUSD has there is always the risk that we see one side of the market (shorts) throw in the towel, resulting in a sharp squeeze."
• "We have a catalyst this coming week which has potential to do just that, as the FOMC is set to release its decision on interest rates and policy statement. Rates are expected to remain unchanged, but any material signaling for the September meeting could have a sizable impact on the US dollar. Join us live for FOMC coverage on Wednesday. If the euro continues to gain steam and breaks the August 2015 high at 11714, the next natural level of resistance doesn’t arrive until the 2012 low at 12041. It seems unlikely, though, such heights will be reached in the coming week – it would be quite the move. Some back-and-forth seems likely to take place prior to Wednesday between ~11600 and ~11700. After that, we’ll have a clearer picture as to how things will unfold."

[Sergey Golubev]

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

EUR/USD - "According to the newswires, investors latched on to a comment in the post-meeting presser with ECB President Mario Draghi where he said the QE program would be reviewed in autumn. When asked if that meant the September policy meeting, he snapped that if it did, he would have said so. Did the markets pick through a sea of dovish rhetoric to fish out the one pseudo-supportive remark on offer to justify an explosive Euro rally? Perhaps, but that explanation seems fanciful, particularly since revisiting the size of asset purchases has been largely expected in September along with a forecast update."

[Sergey Golubev]

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

GBP/USD - "As we came into this week, there were very legitimate bullish prospects for the British Pound, and this wasn’t necessarily a new story. Ahead of Brexit, Bank of England Governor, Mark Carney, warned that the British Pound could undergo a ‘sharp repricing’ should U.K. voters elect to leave the EU. He also warned that this could be coupled with a whole host of unsavory elements; such as slower growth and higher unemployment. Meanwhile, the ‘sharp repricing’ in the value of the British Pound could lead to unsavory levels of inflation; and this could put the bank in the unenviable position of having to choose whether to mold monetary policy to either a) support the British Pound, which could stem inflation while risking even higher levels of unemployment and even slower levels of growth, or b) support growth and employment by cutting interest rates, which could drive even more weakness into GBP, which could expose even stronger inflationary forces."

[Sergey Golubev]

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

USD/JPY - "The Bank of Japan (BoJ) interest rate decision has done little to alter the near-term outlook for USD/JPY, with the pair at risk of giving back the rebound from the June-low (108.80) if the Federal Reserve endorses a more gradual path in normalizing monetary policy. With Fed Fund Futures still showing a 50/50 chance for a move in December, market participants may put increase emphasis on the 2Q Gross Domestic Product (GDP) report as the growth rate is expected to pick up from the first three-months of 2017."