Press review - page 235

Sergey Golubev
Moderator
113474
Sergey Golubev  

Will the EURUSD continue to fall?

Technical Analysis (October 6, 2014). The EURUSD tumbled to support after better than expected Non-Farm Payroll. Will the trend continue in trading this week?


Sergey Golubev
Moderator
113474
Sergey Golubev  

EUR/USD Technical Analysis: Floor Set at 1.25 Threshold?

  • EUR/USD Technical Strategy: Short at 1.3644
  • Support: 1.2500, 1.2377, 1.2278
  • Resistance:1.2703, 1.2777, 1.2848



The Euro may be readying a rebound against the US Dollar after prices put in a bullish Piercing Line candlestick pattern. A daily close above support-turned-resistance at 1.2703, the November 2012 bottom, exposes the March 2013 floor at 1.2777. Alternatively, a drop below the 23.6% Fib expansion at 1.2500 clears the way for a challenge of the 38.2% level at 1.2377.

Sergey Golubev
Moderator
113474
Sergey Golubev  

EUR/USD Scope For Recovery May Be Limited In Spite Of A Piercing Line (based on dailyfx article)

  • EUR/USD Technical Strategy: Sidelines Preferred
  • Piercing Line Pattern Awaits Confirmation Near 2014 Low
  • Dojis On H4 Suggested Fading Downside Momentum

EUR/USD’s recent rebound has yielded a Piercing Line formation, yet some skepticism over a recovery is warranted. The pattern requires a successive up-day in order to be validated and to suggest a base may have formed. This may prove a difficult feat given the sustained presence of a downtrend and the sellers still sitting nearby at the 1.2700 handle. Further, the Euro’s path lower over recent months has been littered with reversal signals that have failed to catalyze a recovery.


EUR/USD’s intraday recovery was preceded by a parade of Doji formations. The candlesticks suggested hesitation by the bears to lead the pair lower at the critical 1.2500 barrier. While an absence of reversal signals leaves some doubt over a correction, the context on the daily warns that scope for further gains may be limited.


Sergey Golubev
Moderator
113474
Sergey Golubev  

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video October 2014

newdigital, 2014.10.08 06:57

EURUSD and USDJPY - One Risks Correction, The Other Reversal

Normally, the media and market participants are hyping the risk of reversal or volatility. It seems they under-appreciate it today. Both the US Dollar and equity indexes are standing on the edge of important technical levels - a break from the greenbacks three-month trend and the floor of a S&P 500 channel that stretches back to the beginning of 2013. Symbolic breaks for either of these two can tip large fundamental imbalances to trigger deeper trends. What is the potential this pressure represents? Which faces the larger unwind? Why does the USDJPY appeal through more scenarios while the medium-term EURUSD outlook is bearish even if the greenback slips? We discuss these topics in today's Trading Video.



Sergey Golubev
Moderator
113474
Sergey Golubev  

EUR/USD Technical Analysis: Profits Booked on Short Position (based on dailyfx article)

The Euro recovered against US Dollar as expected after putting in a bullish Piercing Line candlestick pattern. A daily close above support-turned-resistance at 1.2777, the March 2013 bottom, exposes the 38.2% Fibonacci retracement at 1.2848. Alternatively, a turn below the 1.2703-15 area marked by the November 2012 floor and the 23.6% Fib clears the way for a challenge of trend line resistance-turned-support at 1.2673.


Sergey Golubev
Moderator
113474
Sergey Golubev  
2014-10-09 06:45 GMT (or 08:45 MQ MT5 time) | [EUR - French Trade Balance]

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

[EUR - French Trade Balance] = Difference in value between imported and exported goods during the reported month. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers.

==========

Sergey Golubev
Moderator
113474
Sergey Golubev  

Trading the News: Canada Net Change in Employment (based on dailyfx article)

  • Canada Employment to Increase for Fifth Month in 2014.
  • Jobless Rate to Hold at Annualized 7.0% for Third Consecutive Month.

The USD/CAD may face a larger pullback going into the end of the week should Canada’s Employment report show a meaningful rebound in job growth and fuel interest rate expectations.

What’s Expected:



Why Is This Event Important:


An upbeat employment print may put increased pressure on the Bank of Canada (BoC) to further normalize monetary policy, but we would need to see a material shift in the forward-guidance to adopt a bullish outlook for the Canadian dollar as Governor Stephen Poloz continues to endorse a period of interest rate stability.

Easing input costs along with the pickup in private sector activity may generate a strong pickup in job growth, and a positive print may threaten the opening monthly range in the USD/CAD as it boosts interest rate expectations.

However, weakening demand at home and abroad may drag on employment, and a dismal development may heighten the bullish sentiment surrounding the USD/CAD as it gives the BoC greater scope to retain its current policy for an extended period of time.

How To Trade This Event Risk

Bullish CAD Trade: Canada Adds 20.0K or More Jobs

  • Need red, five-minute candle following the report for a potential short USD/CAD trade
  • If market reaction favors a long loonie trade, sell USD/CAD with two separate position
  • 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 CAD Trade: Employment Report Disappoints
  • Need green, five-minute candle to consider a long USD/CAD position
  • Carry out the same setup as the bullish Canadian dollar trade, just in the opposite direction


  • Will favor topside targets as inverse head-and-shoulders remains in play & RSI retains bullish momentum
  • Interim Resistance: 1.1300 pivot to 1.1320 (61.8% expansion)
  • Interim Support: 1.1050 (61.8% expansion) to 1.1065 (23.6% expansion)
Impact that Canada Employment Change has had on CAD during the last release
PeriodData ReleasedEstimateActualPips Change
(1 Hour post event )
Pips Change
(End of Day post event)
AUG 2014 09/05/2014 12:30 GMT 10.0K -11.0K +12 +8

The Canada employment report disappointed, with the region shedding 11.0K jobs in August after adding 41.7K the month prior. Despite a downtick in the participation rate to 66.0% from 66.1%, the unemployment rate held steady at an annualized 7.0% for the second consecutive month. As a result, it seems as though the Bank of Canada will retain its neutral tone for monetary policy and keep the benchmark interest rate at 1.00% throughout the remainder of the year in an effort to encourage a more robust recovery. The reaction to the dismal reading was short-lived as the USD/CAD chopped around the 1.0880 level during the North America trade, with the pair closing at 1.0879.

MetaTrader Trading Platform Screenshots

USDCAD, M5, 2014.10.10

MetaQuotes Software Corp., MetaTrader 5, Demo

USDCAD M5 : 59 pips range price movement by CAD - Employment Change news event

USDCAD, M5, 2014.10.10, MetaQuotes Software Corp., MetaTrader 5, Demo


Sergey Golubev
Moderator
113474
Sergey Golubev  
Forex Weekly Outlook October 13-17

UK inflation data, Mario Draghi and Janet Yellen’s speeches, US Retail sales, Unemployment and manufacturing data are the major events on our calendar for this week. Here is an outlook on the main market movers coming our way.

Last week, despite continuous positive US data, the FOMC minutes defied expectations for a possible rate hike in the near future, sending the dollar down. The minutes revealed a debate on the necessary normalization period, which the hawks considered too long. Fed minutes also showed that some policymakers feared a stronger dollar will generate downward pressure on inflation and that global economic growth is on a downward trend. Will the dollar continue to decline?
  1. UK inflation data: Tuesday, 8:30. The annual inflation rate in the UK declined from 1.6% to 1.5% in August, amid lower prices of petrol, food and non-alcoholics drinks. Meanwhile, core inflation, excluding food, alcohol, tobacco and energy, edged up1.9%. However the low inflation bides well with consumer’s purchasing power due to a slow wage growth. UK inflation is expected to decline to 1.4% this time.
  2. Eurozone German ZEW Economic Sentiment: Tuesday, 9:00. German investor confidence declined to a 21 month low of 6.9 in September following a 8.6 reading in August amid stronger political tensions in Europe. Analysts expected an even lower figure of 5.2. This was the lowest reading since December 2012. German economy slowed down in the third quarter which may weaken growth in the second half of the year. German investor confidence s expected to plunge to 0.2.
  3. UK Employment data: Wednesday, 8:30. U.K. unemployment rate fell to the lowest level in six years, indicating continued strength in the labor market. Likewise, U.K. jobless claims dropped 37,200, far better than the 30,000 decline estimated by economists. That pushed the total below 1 million for the first time since September 2008. The number of workers rose by 74,000 to 30.6 million. Despite the slow growth in wages, Bank of England Governor Mark Carney is confident that job market growth will eventually boost salaries. U.K. jobless claims are expected to decline further by 34,200 now.
  4. Mario Draghi speaks: Wednesday, 7:00, 18:00. ECB President Mario Draghi will speak in Frankfurt at two occasions. He may talk about the ECB’s efforts to raise inflation to normal levels and the planned QE. Market volatility is expected.
  5. US retail sales: Tuesday, 12:30. U.S. retail sales gained 0.6% in August amid a buying spree of automobiles and a range of other goods. Economists expected a 0.3% increase as in July. Meanwhile core sales expanded 0.3% exceeding expectations for a 0.2% rise. Consumer sentiment also soared, hitting a 14-month high in September. However lack of real wage growth may weigh on retail sales in the future but the third quarter looks promising. Retail sales are expected to decline by 0.1% , while core sales are predicted to rise 0.2%.
  6. US PPI: Tuesday, 12:30. Wholesale prices in the U.S. remained changed in August from the previous month, held back by a plunge in energy costs as well as indicating low inflation in the production pipeline. In the last 12 months, wholesale prices increased 1.8%. The PPI excluding food and energy inched 0.1% from the prior month. Producer prices are predicted to gain 0.1% this time.
  7. US Unemployment Claims: Thursday, 12:30. Fewer Americans filed claims for unemployment benefits last week, reducing the average number of applications to the lowest level in eight years reaching 287,750. Applications declined 1,000 to 287,000 last week, suggesting employers keep their workers, expecting continued economic growth including expansion in hiring. The number of people receiving benefits has also fallen steadily to just 2.38 million in the week ended Sept. 27. Jobless claims are expected to reach 286,000 this week.
  8. US Philly Fed Manufacturing Index: Thursday, 14:00. Manufacturing activity in the Philadelphia area declined in September to 22.5 from 28 in August which was the highest since March 2011. Economists expected a slightly higher reading of 22.8. Despite the fall in September, the survey reflects continued growth in the region’s manufacturing sector as many indicators for future manufacturing conditions reflect general optimism about growth in activity and employment over the next six months. Manufacturing activity in the Philadelphia area is anticipated to decline further to 19.9.
  9. US Building Permits: Friday, 12:30. The number of permits issued for privately-owned housing units reached a seasonally adjusted annual rate of 998,000 in August following the revised July rate of 1,057,000. Economists expected a total of 1,040,000. Single-family permits in August reached 626,000, 0.8% below the revised July figure of 631,000. Authorizations of units in buildings with five units or more were at a rate of 343,000 in August. The number of permits is expected to grow to 1.04 million.
  10. Janet Yellen speaks: Friday, 12:30. Federal Reserve Chair Janet Yellen is scheduled to speak in Boston. Yellen may shed more light on the FOMC minutes released last week and the gloomy growth outlook despite positive US economic data. Market volatility is expected.
  11. US Prelim UoM Consumer Sentiment: Friday, 13:55. The preliminary September reading of University of Michigan’s consumer sentiment soared to 84.6, the highest since July 2013, following 82.5 in the final August reading. Despite consumers’ fears of a slowdown in employment growth, anticipations were high on wage expansion. Consumer expectations jumped to 75.6 from the 71.3 reading last month and above a forecast of 73.0. Consumer sentiment s expected to reach 84.3 this time.
Sergey Golubev
Moderator
113474
Sergey Golubev  

USDJPY Fundamentals (based on dailyfx article)

Fundamental Forecast for Pound: Neutral


The Japanese Yen surged versus all major counterparts as the US S&P 500 saw its worst weekly decline in over two years. There’s little economic event risk out of Japan in the week ahead, but we think big things stand on the horizon for JPY pairs.



Traders pushed the Japanese Yen to fresh multi-year lows versus the US Dollar as broader financial markets soared, but a clear flight to safety warns that the JPY may soon regain favor. Typically we would favor the traditional safe-haven in the US Dollar through times of market turmoil.

Yet the clear fact is that speculators remain extremely short the Yen and long the dollar (long USDJPY). This in turn suggests that the Greenback could actually do poorly if we see further stock market tumbles and a broader deleveraging across leveraged assets.

A virtually empty Japanese economic calendar in the week ahead suggests that few expect major JPY moves. Our Senior Technical Strategist nonetheless warns that the USDJPY may be nearing a significant breakdown. And indeed we say this: don’t fall asleep on the Yen. It could very well be that this is a minor S&P 500 correction within a much larger bull trend. Yet we can’t rule out a larger pullback, and we believe the JPY could surge if this is indeed the start of a larger market correction.

Sergey Golubev
Moderator
113474
Sergey Golubev  

GBPUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Pound: Neutral
  • GBPAUD Outside Reversal Favors Long Scalps- 1.8440 Resistance
  • British Pound May Turn Lower as BOE Policy Standstill Continues


The GBP/USD may continue to carve lower-highs & lows in the week ahead should the fundamental developments coming out of the U.K. economy further dampen interest rate expectations.

The U.K. Consumer Price Index (CPI) may mark the lowest print since 2009 as the headline reading is expected to slow to an annualized 1.4%, and the diminishing threat for inflation may heighten the bearish sentiment surrounding the British Pound as the Bank of England (BoE) remains in no rush to normalize monetary policy. It seems as though we will continue to see a 7-2 split within the Monetary Policy Committee (MPC) amid the limited headlines surrounding the October 9 interest rate decision, and we may see Martin Weale and Ian McCafferty continue to serve as the minority throughout 2014 as wage pressures remain largely subdued.

However, the September Jobless Claims report may generate a greater rift within the BoE as Average Weekly Earnings are projected to uptick for the first time since March, and a strong rebound in wage growth may renew bets for higher borrowing costs as the central bank continues to take note of the stronger-than-expected recovery in the labor market. With that said, the inflation outlook is likely to heavily impact the British Pound next week as BoE Governor Mark Carney retains a rather balanced tone for monetary policy, and the central bank may have little choice but to pay closer attention to the recent wave of U.S. dollar strength as the depreciation in the exchange rate raise the risk for imported inflation.

As a result, the GBP/USD remains vulnerable to a further decline, especially as the Relative Strength Index (RSI) retains the bearish momentum carried over from back in July, with the next key downside objective coming in around the 1.5900, the 50.0% Fibonacci expansion from the 2009 lows.