Press review - page 117

Sergey Golubev
Moderator
113440
Sergey Golubev  
Forex Weekly Outlook Mar 31-Apr 4

The US dollar gained against the euro and the yen, but lost ground against the other currencies. the ECB rate decision, Janet Yellen’s speech, US ISM Manufacturing PMI, important employment data culminating in the all-important Non-Farm Payrolls and rate decision in the Eurozone are the highlights of this week. Here is an outlook on the main events awaiting us this week.

Final US GDP growth for the final quarter of 2013 was slightly revised to the upside, reaching 2.6%. In the meantime, weekly jobless claims surprised with a 10,000 drop to 311,000, beating forecast for a 326,000 reading, indicating the US job market continues to improve. Will this trend continue? In the euro-zone, dovish comments by the ECB pushed the euro down, while UK retail sales gave a boost to the pound. NZD/USD reached the highest levels since 2011 and also the Aussie and the loonie enjoyed significant gains.
  1. Eurozone inflation data: Monday, 9:00. Inflation in the Eurozone eventually increased by only 0.7%. The initial reading was 0.8%, better than the 0.7% increase predicted by analysts, but this changed in the final read. The core CPI figure, excluding energy, food, alcohol & tobacco, edged up 1% in February, following 0.8% posted in the previous month. Markets had expected the pace of price acceleration to remain steady for the month. Eurozone inflation is expected to reach 0.6%. The low expectations are due to the weak German inflation numbers.
  2. Canadian GDP: Monday, 12:30. Gross domestic product in December fell more than expected, dropping 0.5% after a 0.2% gain in the previous month. Analysts expected a smaller decline of 0.2%. This was the biggest monthly decline since March 2009. Weakness was visible across the board however; Bank of Canada Governor Stephen Poloz said this could be a temporary relapse due to weather related factors. Nonetheless real gross domestic product grew by 2.0% in 2013 compared to 2012. Gross domestic product is expected to expand 0.4%.
  3. Janet Yellen speaks: Monday, 13:55. Federal Reserve Chair Janet Yellen is scheduled to speak in Chicago. Yellen may explain the Fed’s latest decision to continue tapering, cutting another $10bn from its economic stimulus. The Federal Reserve Chair may also elaborate on the rate hike intentions for 2015. Volatility is expected.
  4. Australian rate decision: Thursday, 3:30. Australia’s central bank maintained its cash rate at a record low of 2.5% in March, in line with market consensus. The weakening of the Australian dollar will help boost growth. The RBA kept an accommodative monetary policy with credit growth rising gradually. Domestic demand showed signs of improvement and the labor market is expected to grow in the coming months. Rates are expected to remain unchanged.
  5. US ISM Manufacturing PMI: Tuesday, 14:00. Manufacturing activity expanded more rapidly than expected in February, emerging from the harsh winter weather rising to 53.2 from 51.3 in January. The manufacturing expansion could have been stronger, if it had not been for a shortage of parts. However, orders have improved, ensuring larger growth in the coming months. Another improvement to 54.2 is anticipated now.
  6. US ADP Non-Farm Employment Change: Wednesday, 12:15. U.S. private sector added 139,000 jobs in February, lower than market forecast of 159,000 gain. The weak result was blamed on difficult winter conditions. Economists believe employment will pick-up in spring. The ADP figures give an early estimate for the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment. U.S. private sector is expected to gain 192,000 jobs.
  7. Eurozone rate decision: Wednesday, 12:15. The European Central Bank kept interest rates on hold leaving monetary policy unchanged to help boost the euro zone recovery. ECB President Mario Draghi said the ECB will take bold policy action if the outlook deteriorates, but assured the euro area is on a recovery track. However one of the biggest downside risks is low inflation, below 1%. ECB policymaker Ewald Nowotny said that he and his colleagues were nearing unanimity on the option to end the so-called sterilization operations. The ECB is expected to keep rates unchanged at 0.25%.
  8. US Trade Balance: Thursday, 12:30. The U.S. trade deficit changed slightly in January, reaching a $39.1 billion gap from December’s revised shortfall of $39.0 billion. The release was in line with market consensus. Exports rose 0.6% to $192.5 billion and imports edged up 0.6% to $231.6 billion in January. Domestic demand weakened mildly, increasing businesses’ inventories which will in turn constrain import growth in the first quarter. US Trade Balance is expected to reach 0.2 billion.
  9. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial claims for jobless benefits declined last week by 10,000 to a seasonally adjusted 311,000, indicating the US job market is continuing its recovery process. Analysts expected claims to rise to 326,000. The four-week moving average fell to 317,750 last week, the lowest level since last September. US jobless claims are expected to rise to 319,000.
  10. US ISM Non-Manufacturing PMI: Thursday, 14:00. US service sector activity fell to 51.6 in February from in 54.0 January mainly due to contraction in the survey’s employment section. The Non-Manufacturing Business Activity Index dropped to 54.6% from 56.3 posted in January. The New Orders Index climbed to 51.3, from 50.9 registered in January. The Employment Index fell to 47.5 from 56.4 indicating in employment for the first time after 25 consecutive months of growth. A rise to 53.5 is anticipated this time.
  11. Canadian employment data: Friday, 12:30. Canadian job market lost 7,000 jobs in February after gaining 29,400 in the previous month; however, the unemployment rate remained unchanged at 7%. This unexpected decline was contrary to analysts’ expectations of a 16,900 job growth. The public sector shed nearly 51,000 jobs, offset by gains of 35,000 and 8,000 in the private sector. However, the majority of the jobs lost were part time, while full-time positions increased, which is a good sign for the Canadian employment market. Canadian job market is expected to gain 23,500 jobs, and unemployment rate is expected to remain at 7%.
  12. US Non-Farm Payrolls and Unemployment rate: Friday, 12:30. The US economy added more jobs than expected in February adding 175,000 positions, while economists expected a job gain of 151,000. However, the unemployment rate increased slightly to 6.7% from 6.6% in January. The labor force participation rate was unchanged at 63%. The job addition in February came after weeks of slowdown due to unusually tough weather conditions, indicating the US job market returns to recovery. US job market is expected to add 196,000 jobs, and unemployment rate is expected to decline to 6.6%.
Sergey Golubev
Moderator
113440
Sergey Golubev  
Forex Strategy Video: Stick to the Plan...Especially When the Trade is On

• Many trading pitfalls occur after the trade is already on
• When the reason for taking the trade has evaporated, probabilities fade fast

• We look at the temptations, hazards and making the right calls with GBPUSD and EURUSD examples



A trade that has been put through the ringer for its fundamental, technical and market conditions merits should skew probabilities in our favor. When we make exceptions, our strategy starts breaking down. Tantalizing technical setups with no fundamental chance or event-driven volatility with no definable guidance in price cater to our emotions rather than our bottom line. But sticking to the plan isn't just for the pre-flight check. Many will alter the plan mid-trade or decide to ignore changing circumstances to revert to hope. Hope is not a trading plan. We look at how sticking to the plan both before and during a trade is important using GBPUSD and EURUSD examples in the weekend Strategy Video.

Forex Strategy Video: Stick to the Plan...Especially When the Trade is On
Forex Strategy Video: Stick to the Plan...Especially When the Trade is On
  • John Kicklighter
  • www.dailyfx.com
A trade that has been put through the ringer for its fundamental, technical and market conditions merits should skew probabilities in our favor...
Sergey Golubev
Moderator
113440
Sergey Golubev  
Crude Oil forecast for the week of March 31, 2014, Technical Analysis

The light sweet crude market rose during the week, breaking well above the $100 level again. The fact that the previous week had formed a hammer was a clue that we could be going higher, but the actual confirmation came once we cleared the top of that candle. It looks as if the market is still somewhat bullish, and as a result we will more than likely head towards the $104.50 level given enough time. We think that this market will be one that can be bought on dips, simply because there’s so much in the way of support below.

With that being said, we believe that the $105 level will continue to be massive resistance, and as a result we feel that the area will more than likely cause a bit of selling. A break above that area of course would be significant in the sense that it would free the market to go much higher, but at the end of the day we still believe that there’s a bit to go before even get to that issue. We are bullish.



Brent

The Brent markets rose during the week as well, but don’t look quite as bullish of the light sweet crude market. Nonetheless, it appears that we are heading towards the $112 level given enough time, although we would expect some choppiness right around the $108.50 level, an area that did in fact cause a bit of resistance this past week.

Any pullback at this point time should end up being a relatively positive thing, as buyers should step into the marketplace. The $105 level offered enough support to push the market higher last time, and we believe that will continue to be the case. So having said all of this, even if we pullback at this point time, we would fully anticipate this market been somewhat supported. With that in mind, we are not interested in selling, and believe that ultimately we will hit the aforementioned $112 level, but it may take quite a bit of chopping around.


Sergey Golubev
Moderator
113440
Sergey Golubev  
Nikkei forecast for the week of March 31, 2014, Technical Analysis

The Nikkei as you can see rose during the week, breaking above the top of the shooting star from the previous week. That being the case, we believe that this market will more than likely continue to at least go sideways, if not go higher. We have no interest in shorting this market until we get below the ¥14,000 level, something that probably isn’t going to happen in the short-term. That being the case, we are buyers on a break of the ¥15,000 level, but recognize the fact that the move to the ¥16,000 level will probably be relatively choppy





Sergey Golubev
Moderator
113440
Sergey Golubev  
DAX forecast for the week of March 31, 2014, Technical Analysis

German index initially fell during the week, but found the €9200 level to be supportive enough to turn things back around and bounce high enough to clear the €9500 level. Because of this, we believe that the market will continue to go higher, but it might be a bit of a choppy affair. If we can clear the €9800 level, we believe that there isn’t much standing between that and the €10,000 level. Ultimately, it doesn’t matter, we are buyers of the DAX nonetheless. With that, there is no selling opportunity as far as we can tell and we believe that the €9000 level will continue to be the “floor” in this market.





Sergey Golubev
Moderator
113440
Sergey Golubev  
NASDAQ forecast for the week of March 31, 2014, Technical Analysis

The NASDAQ fell during the bulk of the week, breaking the 4250 level to the downside which of course triggered the cell position that traders could have had based upon the shooting star from last week. However, we had suggested previously that this market has plenty of support below, and as a result we are now looking at the market for support near the 4000 level, and perhaps even the 4100 level. Right now, we are on the sidelines but simply waiting for that supportive candle in order to start going long.




Sergey Golubev
Moderator
113440
Sergey Golubev  
S&P 500 forecast for the week of March 31, 2014, Technical Analysis

The S&P 500 as you can see fell during a large portion of the week, but found enough support at the 1840 level to turn things back around. Nonetheless, we are essentially consolidating at elevated levels, and a move above the 1880 level would more than likely signal that the market is ready to head to the 2000 handle. We think that it will eventually happen, but we could get a little bit of a pullback in the meantime. We see the 1780 level as a bit of a “floor” in this market, so as long as we stay above there we are “buy only.”





Sergey Golubev
Moderator
113440
Sergey Golubev  
Silver forecast for the week of March 31, 2014, Technical Analysis

Silver markets fell during the bulk of the week over the last by sessions, but as you can see on the daily chart, there are signs of support coming into the marketplace. $19 is a very obvious support level as well, so we simply think that regardless, we don’t have enough room to start shorting the market now from a longer-term perspective. Quite frankly, we would love to see some type of supportive candle down here because we think we have more room to the upside than the downside.





Sergey Golubev
Moderator
113440
Sergey Golubev  
Natural Gas forecast for the week of March 31, 2014, Technical Analysis

The natural gas markets rose during the course of the last week, testing the $4.50 level. We even went as high as just under the $4.60 level, but as you can see could not hang onto the gains all the way up in that area. Although this candle is very positive, we have to wonder whether or not there’s any real strength of this move higher, simply because the Friday candle was in fact a shooting star. With that, we are only buyers above the $4.60 handle, and until then will remain skeptical.





Sergey Golubev
Moderator
113440
Sergey Golubev  
Gold forecast for the week of March 31, 2014, Technical Analysis

Gold markets fell during the week, but have found a bit of support towards the end of the session on Friday. With that being the case, although this market looks bearish, it would not surprise us if the shorter-term charts lead the way here. After all, the $1280 level should be relatively supportive based upon daily charts, so we are bit hesitant to sell here. If we do break down below the $1280 level however, we can fully see how the market could find its way down to the $1200 level given enough time.