Press review - page 222

Sergey Golubev
Moderator
113476
Sergey Golubev  

2014-08-07 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Employment Change]

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

[AUD - Employment Change] = Change in the number of employed people during the previous month. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity

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Australia Jobless Rate Climbs To 6.4%

The unemployment rate in Australia was a seasonally adjusted 6.4 percent in July, the Australian Bureau of Statistics said on Thursday - touching a decade high.

The headline figure was well shy of expectations for 6.0 percent, which would have been unchanged from the June reading.

The Australian economy lost 300 jobs to 11,576,600 versus forecasts for an increase of 13,200 jobs after gaining 15,900 in the previous month.

Full-time employment increased 14,500 to 8,077,400 and part-time employment decreased 14,800 to 3,499,200.

But the participation rate inched higher to 64.8 percent, beating forecasts for 64.7 percent, which would have been unchanged.

Unemployment increased 43,700 to 789,000. The number of unemployed persons looking for full-time work increased 21,900 to 566,400 and the number of unemployed persons only looking for part-time work increased 21,800 to 222,600.

Sergey Golubev
Moderator
113476
Sergey Golubev  

Price & Time Analysis for GOLD (based on dailyfx article)

  • XAUUSD is in consolidation mode above 1280
  • Our near-term trend bias is lower while below 1300
  • Critical support is eyed between 1280 and 1262 with weakness below needed to kick off a more important move lower
  • A cycle turn window is eyed late this week
  • A move over 1300 would turn us positive on the metal
Square, but will look to go long on a move through 1300.

InstrumentSupport 2Support 1SpotResistance 1Resistance 2
XAU/USD 1262 1280 1286 1300 1321
Sergey Golubev
Moderator
113476
Sergey Golubev  

AUDIO - Volatility Spikes with Steve Moses

The past 2 weeks have spiked the VIX nearly 70%! For a trader this can be golden, especially for options traders looking to sell options and collect premium. Master trader, Steve Moses, joins Merlin for a look at how his trading has changed over the past 2 weeks due to the increase in volatility. Steve also takes a look at historical market data and what we should have learned from it!


Sergey Golubev
Moderator
113476
Sergey Golubev  

2014-08-07 11:00 GMT (or 13:00 MQ MT5 time) | [GBP - Official Bank Rate]

if actual > forecast = good for currency (for GBP in our case)

[GBP - Official Bank Rate] = Interest rate at which banks lend balances held at the BOE to other banks. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.

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Bank Of England Holds Rates Steady As Expected

The Bank of England once again kept its key rate at a record low on Thursday, sticking to its forward guidance even as the strong pace of economic recovery has augmented speculation for a rate hike late this year.

The nine-member Monetary Policy Committee decided to keep its key bank rate unchanged at 0.50 percent and the asset purchase programme at GBP 375 billion.

With the strong economic recovery and unemployment falling more sharply than estimated, some members of the panel are likely to have favored a rate hike. The minutes of the previous meeting also signaled that some policymakers are getting closer to a rate hike call.

The current 0.50 interest rate is the lowest since the central bank was established in 1694 and it has heavily reduced the interest income of savers. The unconventional measures were announced during the financial crisis to shore up the economy.

At several instance BoE Chief Mark Carney said the interest rate will have to start rising to maintain price stability as the economy normalizes, but there is no pre-set timing for that action.

Today's decision may not have been unanimous and a rate hike this year cannot be ruled out, said Samuel Tombs, a senior UK economist at Capital Economics. Even so, the outlook of low inflation and sluggish wage growth suggests that interest rates will rise only gradually.

The minutes, due on August 20, will give insight into factors that compelled policymakers to call for an early action. James Knightley, an ING Bank NV economist said he would expect to see one, possibly two members of the MPC having voted for a rate hike at today's meeting.

Sergey Golubev
Moderator
113476
Sergey Golubev  

2014-08-08 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Home Loans]

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

[AUD - Home Loans] = Change in the number of new loans granted for owner-occupied homes. It's a leading indicator of demand in the housing market - most homes are financed, so it provides an excellent gauge of how many qualified buyers are entering the market

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Australia Home Loans Rise 0.2% In June

The total number of home loans in Australia was up a seasonally adjusted 0.2 percent on month in June, the Australian Bureau of Statistics said on Friday - standing at 52,153.

That was shy of forecasts for an increase of 0.6 percent following the downwardly revised 0.1 percent decline in May (originally called flat).

The value of loans added 1.8 percent on month to A$17.070 billion, following the 0.7 percent contraction in May.

Investment lending dipped 0.3 percent on month to A$10.678 billion after falling 0.9 percent in the previous month.

Sergey Golubev
Moderator
113476
Sergey Golubev  

Currency Wars with Time Pesut

With trading ranges getting smaller and smaller for most of the worlds currencies, Tim Pesut believes this is the calm before the storm. Global events and tensions may bring the storm quicker than expected as well! Tim and Merlin talk about the Euro, Dollar, cross pairs, adaptation and the need for patience in today’s markets. Merlin also shows the results of John O’Donnell’s weekly weigh in!


Sergey Golubev
Moderator
113476
Sergey Golubev  

Trading Video: A Bounce to End the Week Unsettles Bears and Bulls

  • The Dow, Yen Crosses and EURUSD all bounced to end the week
  • Yet, behind this restive move, there seems little of the short-term speculative bid of past months
  • A breakdown of the status quo puts risk trends on alert while big data awaits the Pound and Euro

Many of the financial market's high profile movers of the past week put in for a corrective move to end the week. The Dow equity index held critical support at the last moment, EURJPY recovered from a tentative breakdown and EURUSD put in for the biggest single-day rally in seven weeks. Yet, conviction seems to be changing. Rather than doubt showing through immediately in retracements of the five-year strong speculative drive, we now find the return to status quo shaded by skepticism. This raises the risk of a serious break in sentiment and true bearish progress next week. Meanwhile, rate/monetary policy themes will facilitate volatility for the Dollar, Euro and Pound. Data from the UK and Eurozone is particularly intense. We talk these themes and trading in the Weekend Trading Video.



Sergey Golubev
Moderator
113476
Sergey Golubev  
Forex Weekly Outlook August 11-15

German Economic Sentiment; UK employment data; Mark Carney’s speech and inflation report; US unemployment claims, PPI, consumer sentiment are the major topics in Forex calendar. Check out these events on our weekly outlook.

The US economy gained momentum last week with an excellent ISM Non-Manufacturing PMI release climbing to 58.7 from 56 points in June, indicating continued growth in the largest sector of the economy. The reading showed strong gains across the board. The employment component is up from 54.4 to 56 points and factory orders topped predictions with a 1.1% rise. Further good news came from the US labor market with a 14,000 drop in the number of new unemployment claims. Both readings reflect the strong growth trend in US economy.
  1. Eurozone German ZEW Economic Sentiment: Tuesday, 9:00. German analyst and investor climate continued to decline in July, falling to 27.1 points from June’s 29.8. Economists expected a higher reading of 28.9. Current conditions index also fell to 61.8 points from 67.7 in May, however still positive indicating a shift towards a domestically driven recovery in Germany. Nevertheless, the second quarter growth rate is expected to be lower than registered in the first quarter. This decline will also affect the Eurozone growth rate. German analyst and investor index is expected to plunge to 18.2.
  2. UK employment data: Wednesday, 8:30. The Unemployment rate in Britain fell to 6.5% from March to May, reaching following 6.6% in the previous three months. The number jobseeker’s fell by 36,300 to 1.04 million. Prime Minister David Cameron noted that the rate of employment matched the record level set in 2005, indicating stronger British economy. However wage growth is at its lowest since 2009, while excluding bonuses average wage increases are their lowest since 2001. If this trend continues it will have a negative effect on economic growth. The number of jobless Britons is forecasted to decline 29,700 and the unemployment rate is expected to drop to 6.4%.
  3. Mark Carney speaks: Wednesday, 9:30. Bank of England governor Mark Carney will hold a press conference in London about the inflation report. The Governor stated he was pleased with the rise in inflation, noting it came close to the BOE’s target of 2%. Market volatility is expected.
  4. US retail sales: Wednesday, 12:30. Retail sales in the U.S. advanced solidly in June. Core sales, excluding automobiles, gasoline, building materials and food services, edged up 0.6% following a revised 0.2% in May. Core sales are the best gauge for consumer spending component of gross domestic product. June’s gains indicate an upward trend in consumer spending in the second quarter. However retail sales gained only 0.2% in June after posting a 0.5% rise in May. Retail sales are expected to gain 0.2%, while core sales are predicted to edge up 0.4%.
  5. US Unemployment Claims: Thursday, 12:30. The number of US initial Jobless claims fell 14,000 last week to a seasonally adjusted 289,000. The reading was well below the 305,000 forecasted by analysts, indicating the US labor market continues to improve strengthening the US economy. The four-week average declined 4,000 to 293,500. That’s the lowest average since February 2006. The number of workers continues to grow as well as higher waged which will boost consumer spending in the coming months. The number of initial jobless claims is expected to reach 307,000 this time.
  6. UK GDP data: Friday, 8:30. Britain’s economy is expected to advance 0.8% in the second quarter matching the first estimate issued in July. The anticipated advance marches the UK economy to prerecession levels. The positive forecast indicates, recovery is back on track, but wage growth needs to rise in order to sustain long term recovery. The second GDP estimate is expec6ted to remain unchanged at 0.8% growth rate.
  7. US PPI: Friday, 12:30. U.S. producer prices edged up 0.4% in June amid rising gasoline costs, but overall inflation remained tame. Analysts expected a smaller rise of 0.2% as posted in the previous month. Gas prices jumped 6.4%, Steel costs edged up 3%. But prices declined for grains, cheese and rental cars to offset some of those increases. Nevertheless, inflation remains tame with in the Fed’s 2% target. Low inflation has enabled the Fed to pursue extraordinary measures to boost the economy but can drag down wages and spark a recession. U.S. producer prices are expected to rise 0.1%.
  8. US Prelim UoM Consumer Sentiment: Friday, 12:30. Consumer sentiment declined in July to 81.3 from 82.5 in June amid a fall in the consumer outlook index. Analysts expected the index to reach 83.5. Current economic conditions rose to 97.1 from 96.6, better than the 97.0 forecast. But consumer expectations plunged for a third straight month, to 71.1 from 73.5 below the 74.0 expected. Consumer sentiment is likely to improve to 82.7.
Sergey Golubev
Moderator
113476
Sergey Golubev  

AUDUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Australian Dollar: Bearish
  • AUD/USD Extends Declines As Risk Aversion Saps Carry Demand
  • Aussie Left Vulnerable As Rate Hikes Look Increasingly Distant
  • Geopolitical Tensions May Pose A Short-Term Threat To The AUD




The Australian Dollar extended its recent declines over the past week on the back of broad-based risk aversion and disappointing domestic data. Heightened geopolitical turmoil sapped demand for the high-yielding currency as traders flocked to the perceived safety of the Yen and US Dollar. Additional pressure was put on the currency following an unexpected jump in the local unemployment rate to a 12 year high.

Looking ahead, if we see tensions surrounding the Middle East or Ukraine escalate, the Aussie could face further weakness in the short-term. However, we have witnessed several flare-ups of geopolitical tensions in recent months, which have failed to leave a lasting impact on the currency. This suggests that if the swell settles from the most recent storm of volatility, the currency may be afforded some breathing room.

Consumer and business confidence figures are the only noteworthy pieces of domestic data on the calendar over the coming week. The leading indicators for the health of the local economy have reflected some resilience in recent months, yet remain subdued. Another lackluster set of readings would further reinforce the need for highly accommodative RBA policy to remain in place.

Despite recent local data softening the Reserve Bank is likely to retain its preference for a ‘period of stability’ for rates over the near-term. Based on recent rhetoric from the Board it would take a material deterioration in incoming economic indicators to re-open the door to rate cuts. At the same time, policy tightening is likely to be delayed. Indeed swaps-implied expectations for rates slipped back into negative territory over the past week. This does little to raise the carry appeal of the currency and leaves the Aussie in a precarious position.

Upcoming Chinese Retail Sales and Industrial Production data will also be on the radar for Aussie traders. Incoming data from the Asian giant has been relatively positive on balance, which has eased concerns over a deceleration in economic growth. If the next week’s figures continue this recent trend it could ease some of the selling pressure facing the AUD.

AUDUSD is drawing closer towards the 92 US cent handle, which has been a line in the sand for the pair since late March. If broken, it would set the stage for a sustained decline to the psychologically-significant 0.9000 handle. Refer to the US Dollar outlook for insights into how the USD side of the equation may influence the pair.

Sergey Golubev
Moderator
113476
Sergey Golubev  
AUD/USD Monthly Technical Analysis for August 2014

Higher inflation data and the belief the Reserve Bank of Australia’s next move will be an interest rate hike, helped drive the AUD/USD into a new high for the year at .9504 last month. An improving economy in China also helped underpin the Forex pair at times during July. However, the stronger U.S. Dollar and the dumping of higher-risk assets helped drive the Aussie down during the last week of the July, leading to a lower close for the month.

Technically, the AUD/USD posted a potentially bearish closing price reversal top. This chart pattern will be confirmed by a break through .9278. Typically, a closing price reversal top signals the start of a 2 to 3 month correction of the last rally. The last rally was .8659 to .9504, making .9081 to .8982 the next likely downside target.

Last month, selling pressure came in as the market approached a downtrending angle and a major 50% level at .9573. The angle drops in at .9556 this month. The selling pressure late in the month also put the market on the weakside of another downtrending angle at .9356. This angle is resistance this month.



The first downside target in August is the uptrending angle at .9219. This is followed by the Fibonacci level at .9218. These two levels combine to form a solid support cluster. Watch for a technical bounce on the first test. Once this area is cleared, look for a drive into the retracement zone at .9081 to .8982.

The closing price reversal top gives the market a downside bias this month. Furthermore, the high at .9504 has the potential to become a bearish secondary lower top. Fundamentally, the strengthening U.S. economy along with concerns about Ukraine, Gaza and general weakness in the global economy may lead to more risky asset liquidation that should keep the pressure on the Aussie throughout the month.