Press review - page 551

[Sergey Golubev]

Dow Jones Industrial Average - ranging bullish; 22,179 is the key (based on the article)

DJIA on weekly chart is located far above Ichimoku cloud for the bulish with the ranging within 22,179 resistance level for the bullish trend to be continuing and 21,279 support level for the secondary correction to be started. Ascending triangle pattern was formed by the price to be crossed to above for the bullish to be resumed.

Most likely scenario: ranging bullish.

• "DJIA is approaching a trend line created by connecting the August 8 and August 16 highs. This line is important for the near term because a close above the line suggests the near term down trend has abated. The bullish wave labeling is that the August 8 to August 21 correction is an a-b-c zigzag. This implies a retest of the 22,178 high. If prices respect this resistance trend line and head lower, then our bearish Elliott Wave model may be taking shape to retest the 21,600 lows and possibly lower levels."

[Sergey Golubev]

Intra-Day Fundamentals - NZD/USD and Dollar Index: U.S. Gross Domestic Product

2017-08-30 13:30 GMT | [USD - GDP]

• past data is 2.6%
• forecast data is 2.0%
• actual data is 3.0% according to the latest press release

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

[USD - GDP] = Annualized change in the value of all goods and services produced by the economy.

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From official report :

• "Real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter of 2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 percent."
• "The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month."

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NZD/USD M5: range price movement by U.S. Gross Domestic Product news events

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Dollar Index M5: range price movement by U.S. Gross Domestic Product news events

[Sergey Golubev]

Bitcoin, the new ‘gold,’ is (based on the article)

Daily price is on bullish breakout which was started in the end of June this year: the price is breaking 4,639 resistance level together with ascending triangle pattern to above for the bullish breakout to be continuing.

• "Once, gold was the hedge against uncertainty, the asset where investors could park their cash in times of political and economic turmoil. Now Bitcoin is taking its place, as evidenced by the performance of the two assets in recent months."
• "The Bitcoin Investment Trust Shares have increased 10-fold in value in the last twelve months, gaining more than 80 percent in the last three months alone. Meanwhile, SPDR Gold shares are down 0.68 percent in the last twelve months and up 3.19 percent in the last three months."
• "Apparently, Bitcoin is more popular than gold among investors, as a hedge against rising global uncertainties.  Growing mistrust of national currencies, following dubious government policies, has pushed people into Bitcoin."

[Sergey Golubev]

Harvey is why Oil is trading lower (based on the article)

Daily price is above Ichimoku cloud in the bullish area of the chart. The price breaking symmetric triangle pattern together with 50.55 support level to below for the secondary correction to be started with 49.30 bearish reversal level as the nearest daily target in this case.

• "Are you confused why Oil is trading lower after an encouraging EIA Crude Oil Inventory Report that showed a draw of 5.39m barrels and had refiners processing 1m bpd more than last year’s record refining activity? In a word, or name, Harvey is why Oil is trading lower, and you can see the confusion through derivative markets such as time spreads of Oil and the Brent/ WTI spread."
• "Either way, the supply chain component of the energy market that was hurt by Harvey was refiners. What you need to know is that refiners were the demanding so much Oil from producers that the massive amount of production, the production that has thwarted OPEC’s best-laid plans to bring global stock pils back to the five-year average, and now that demand is stemmied. Even last week, as evidence was building that hurricane Harvey was going to be a force unlike Texas and refiners along the Gulf of Mexico had seen in a while, refiners were processing record amounts in order to put as much into inventory as possible for when they may be forced offline for prepares."

[Sergey Golubev]

DAX Index - daily bearish ranging; 11,864 is the key (based on the article)

Price is below ichimoku cloud for the bearish ranging within 12,266 bullish reversal resistance level and 11,864 bearish continuation support level. Descending triangle pattern was formed by the price to be crossed to below for the bearish trend to be resumed.

• "Since Tuesday morning when global markets initially reacted lower on North Korea’s launching of a missile over Japan, we’ve seen the market view weakness as a buying opportunity. The DAX broke down to its worst levels since March, but has rebounded a bit. The breakdown came from a triangle pattern we were discussing as likely to lead to lower prices, but selling from the formation has proven to be a one-off event thus far."
• "Turning to the techs-only, the DAX is nearing a trend-line running off the June record high and ‘head’ of a ‘head-and-shoulders’ formation which has acted as a technical guide for much of the past month. The trend-line is first up for the market to conquer, but even with a breach above we will need to see the area around 12300 overtaken to put wind in the sails for longs. That’s still quite a fair amount of distance away. Renewed weakness will bring back into play the weekly low at 11868 near the March low at 11850. Below there, not a move anticipated to take shape at this time, we could finally see the market trade down to the measured move target of the H&S formation near 11600 and an actual level of support around the 11480-mark."

[Sergey Golubev]

Ferrari N.V. (NYSE:RACE) - this company is good name, but ready for a cool down (based on the article)

The price was on the bullish breakout since the beginning of the July this year. The price is on ranging within 116 resistance and 106 support levels being in totally overbought condition to be ready for the secondary correction with possible bullish reversal in the near future for example.

• "RACE stocks  have been a public company for less than two years. In that time its stock’s increased in value by 71.4% from its IPO price of $52 through June 21. Most of the gains coming in 2017, up 53.8% year-to-date".
• "So, now that it’s had a strong run in 2017, and trades at 31 times its forward price-earnings ratio, I see its stock getting stuck in neutral. Wealthy people might buy Ferrari’s cars, but I doubt they’re going to want to own it at $100 per share".

[Sergey Golubev]

USD/CAD - bearish ranging; 1.2413 is the key (based on the article)

Weekly price is below Ichimoku cloud in the bearish area of the chart. The price is on ranging within the folllwing support/resistance levels:

• 1.2413 support level located in the beginning of the bearish trend to be resumed, and
• 1.3014 resistance level located in the beginning of the bullish reversal to be started.

Descending triangle pattern was formed by the price to be crossed to below for the the most likely bearish trend to be continuing in the near future for example.

• "The Canadian Dollar experienced a significant bout of strength on Thursday morning after a GDP print for 2Q got people talking. What they were talking about was that another BoC hike could come as soon as the September meeting after a 3.7% expected GDP print came in at 4.5%. This pace of growth in the Canadian Economy is the fastest since 2011."
• "Another component worth watching that had a +0.98 20-day rolling correlation coefficient, which signals the strength of the relationship, is a tightening between US and CA 2-year yields. You do not have to be well versed in fixed income/ sovereign bonds to see that the two-year yield on a country’s sovereign debt is often treated as a proxy for what the central bankers are expected to do from a monetary policy standpoint. Since May, we have seen the spread between US and CA 2-year yields go from 61 bps in favor of US yields to as tight as 3bps in late July, and after widening in mid-August, the yield spread is narrowing toward the 3bp mark. In other words, the Bank of Canada is expected to be neck-and-neck with the Federal Reserve looking 2-years into the future, but the trend of each central bank’s actions favor the Bank of Canada as being more hawkish and thereby leading the spread and possibly strengthen the CAD further."

[Sergey Golubev]

Trading the News: U.S. Non-Farm Payrolls (NFP) (based on the article)

A 180K expansion in U.S. Non-Farm Payrolls (NFP) paired a pickup in household earnings may trigger a near-term pullback in EUR/USD as it puts pressure on the Federal Open Market Committee (FOMC) to further normalize monetary policy sooner rather than later.

What’s Expected:

Why Is This Event Important:

With the U.S. economy approaching full-employment, signs of higher wage growth may encourage Chair Janet Yellen and Co. to deliver three rate-hikes in 2017 as the central bank remains confident in reaching the 2% inflation-target over the policy horizon. In turn, the dollar may exhibit a more bullish behavior ahead of the next rate decision on September 20 as the ‘the Committee expects to begin implementing its balance sheet normalization program relatively soon.’

How To Trade This Event Risk

Bullish USD Trade: U.S. Adds 180K Jobs or More, Wage Growth Picks in August

• Need a red, five-minute candle subsequent to the fresh figures to consider a short EUR/USD position.
• If the market reaction favors a bullish dollar trade, sell EUR/USD with two separate lots.
• Set stop at the near-by swing high/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.

Bearish USD Trade: NFP Report Falls Short of Market Expectations

• Need a green, five-minute EUR/USD candle to consider a short dollar position.
• Implement the same approach as the bullish dollar trade, just in the opposite direction.

EUR/USD Daily

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[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD, GBP/USD and USD/JPY: Non-Farm Employment Change

2017-09-01 13:30 GMT | [USD - Non-Farm Employment Change]

• past data is 189K
• forecast data is 180K
• actual data is 156K 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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From official report :

• "Total nonfarm payroll employment increased by 156,000 in August, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining."

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EUR/USD M5: range price movement by Non-Farm Payrolls news events

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GBP/USD M5: range price movement by Non-Farm Payrolls news events

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USD/JPY M5: range price movement by Non-Farm Payrolls news events

[Sergey Golubev]

Weekly Outlook: 2017, September 03 - September 10 (based on the article)

The US dollar was under pressure but managed to stage a comeback. The upcoming week features rate decisions in Australia, Canada, and the euro-zone, as well as other events. Here are the highlights for the upcoming week.

1. Australian rate decision: Tuesday, 4:30. Will they try to talk down the currency now?
2. UK Services PMI: Tuesday, 8:30. The publication has a significant impact on the pound.
3. Australian GDP: Wednesday, 1:30.
4. US ISM Non-Manufacturing PMI: Wednesday, 14:00. 
5. Canadian rate decision: Wednesday, 14:00. This time, no change is expected, but the accompanying statement will be closely watched for hints about a hike in October.  All the options are on the table.
6. ECB rate decision: Thursday, 11:45, press conference at 12:30. Will the ECB announce QE tapering? And what will the scale be? These are open questions that keep EUR/USD on the edge.
7. Japanese GDP (final): Thursday, 23:50. Japanese GDP reads see significant revisions.
8. Canadian jobs report: Friday, 12:30. The OK result was not as impressive as most reports so far in 2017. The unemployment rate stood at 6.3%.