Press review - page 249
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Gold markets fell during the course of the week, slamming into the hammers that we had shown as support recently because of that, we feel that this market will probably continue to attract buyers, but we need to see whether or not we can break down below the bottom of these hammers. Because we do it will be a continuation of the downtrend and we should at that point in time had to the $1000 handle. However, if we continue to see support in this area we could get more of a bounce. Ultimately, we prefer selling gold given a chance, especially considering how strong the US dollar is.
The USD/JPY pair initially fell during the course of the week, but found enough support to turn things back around and form a hammer. This is a market that is without a doubt positive, and we have no interest in selling it. We believe that the 115 level is now the support level of that keeps the market afloat, and that pullbacks all the way down to that area can be bought. However, we are a little bit parabolic at this point in time, so we would love to see some type of pullback in order to take advantage of value.
The USD/CAD pair rose during the course of the week, using the 1.12 level as support. Because of that, it feels as if the market is ready finally break out, and if we can break above the recent highs we would anticipate the 1.15 level been tested and broken to the upside. Pullbacks continue to be buying opportunities but keep in mind that this pair tends to be very choppy over the longer term, although it does trend a long time as well. With that being the case, you have to be patient trading this pair.
The NZD/USD pair fell during the course of the week as you can see, but we continue to simply consolidate in this general vicinity we feel that this market is essentially bounce around in this area, and it’s only a matter time before we break down. However rain now we do not have negative candle or rallied to start selling, so we are on the sidelines simply waiting for a little bit more directionality when it comes to candles. We believe that the 0.80 level should be massively resistive still.
The GBP/USD pair tried to rally during the course of the week, but as you can see struggled to keep the gains in ended up forming a shooting star. The shooting star of course is a sign that the market will continue to go lower, but at the end of the day we feel that the market should continue to go lower that being the case it appears that the market is ready to head down to the 1.55 level, and possibly even 1.50 level. Rallies at this point time should continue to be selling opportunities.
The EUR/USD pair rose initially during the course of the week, but found quite a bit of resistance at the 1.25 level to turn back around and form a shooting star. The shooting star is at the bottom of a downtrend, so having said that the market looks as if ready to continue going lower. That being the case, we still believe that the market goes all the way down to the 1.2050 level, which is the longer-term target for us. We have no interest whatsoever in buying this market until we get above the 1.30 handle.
Forex - Weekly outlook: December 1 - 5
The dollar gained ground against a basket of other major currencies on Friday as a steep drop in oil prices fuelled fears over the risk of deflation in Japan and the euro zone and pressured commodity exposed currencies lower.
Oil prices tumbled following Thursday’s decision by the Organization of the Petroleum Exporting Countries to keep production quotas unchanged, fuelling fears over a global supply glut.
The US Dollar Index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set on Monday.
USD/JPY was up 0.73% to 118.59 in late trade, nearing the seven-year peaks of 118.96 struck on November 20.
EUR/USD dipped 0.11% to 1.2451 late Friday, approaching Monday’s two year lows of 1.2359.
In the euro zone, data on Friday showed that the annual rate of inflation slowed to a five year low of 0.3% in November. The weak data was seen as increasing the likelihood that the European Central Bank will implement quantitative easing measures.
The slump in oil prices drove the Russian rouble to record lows against the dollar and the euro, with USD/RUB up 2.04% to 50.28 and EUR/RUB advancing 2.23% to 62.60 in late trade.
The commodity linked Canadian dollar fell to three-week lows against the greenback, with USD/CAD rising 0.74% to 1.1414, while the Norwegian krone fell to its lowest level in five years, with USD/NOK up 1.5% to 7.03.
The selloff in oil overshadowed data Friday showing that Canada’s gross domestic product expanded at an annual rate of 2.8% in the third quarter as exports rose 2.2%. Economists had forecast third quarter growth of 2.1%.
Demand for the dollar continued to be underpinned by expectations that the Federal Reserve is moving closer to raising interest rates, as central banks in Japan and the euro zone are easing monetary policy to spur growth and stave off the threat of deflation.
In the week ahead investors will be focusing on the outcome of a policy meeting of the ECB on Thursday, which is to be followed by the U.S. jobs report for November on Friday. Central banks in the U.K., Canada and Australia are also to hold policy setting meetings next week.
Monday, December 1
- China is to release official data on manufacturing activity, as well as the HSBC manufacturing index.
- The U.K. is to publish its manufacturing index as well as data on net lending to individuals.
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, December 2- Australia is to release data on building approvals and
the current account. Later in the day, the Reserve Bank of Australia is
to announce its benchmark interest rate and publish its rate statement,
which outlines economic conditions and the factors affecting the
monetary policy decision.
- In the euro zone, Spain is to release data on the change in the number of people employed.
- The U.K. is to publish a report on construction sector activity.
Wednesday, December 3- Australia is to publish a report on GDP, the broadest
indicator of economic activity and the leading indicator of economic
growth.
- China is to release official data on service sector activity, as well as the HSBC services index.
- The U.K. is to release what will be a closely watched report on service sector growth.
- The
euro zone is to release data on retail sales, the government measure of
consumer spending, which accounts for the majority of overall economic
activity.
- The U.S. is to release the ADP report on private sector job creation.
- The
Bank of Canada is to announce its benchmark interest rate and publish
its rate statement, which outlines economic conditions and the factors
affecting the monetary policy decision.
- Later Thursday, the ISM is to publish a report on U.S. service sector activity.
Thursday, December 4- Australia is to publish data on retail sales and the trade balance, the difference in value between imports and exports.
- The U.K. is to publish private sector data on house price inflation.
- The Bank of England is to announce its benchmark interest rate.
- Later
in the day, the ECB is to announce its benchmark interest rate. The
announcement is to be followed by a press conference with President
Mario Draghi.
- The U.S. is to release the weekly report on initial jobless claims.
- Canada is to publish its Ivey PMI.
Friday, December 5USD/JPY weekly outlook: December 1 - 5
The dollar ended the week close to seven-year peaks against the yen on Friday as tumbling oil prices added to concerns over the risk of deflation in Japan and the diverging monetary policy stance between the Federal Reserve and the Bank of Japan continued to pressure the yen lower.
USD/JPY was up 0.73% to 118.59 in late trade, not far from the seven-year peaks of 118.96 struck on November 20.
Oil prices tumbled on Friday following Thursday’s decision by the Organization of the Petroleum Exporting Countries to keep its production quotas unchanged, fuelling fears over a global supply glut.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set on Monday.
The yen has weakened broadly since the Bank of Japan unexpectedly expanded its stimulus program on October 31. In contrast the Fed wound up its asset purchase program last month and is weighing whether or not the economy is strong enough to start raising interest rates next year.
Japan’s Prime Minister Shinzo Abe dissolved parliament earlier this month, clearing the way for elections to be held on December 15 to seek a fresh mandate for his economic policies, which call for a weaker yen. The decision came after data showing that Japan’s economy unexpectedly fell into recession in the third quarter.
The euro also gained ground against the yen, with EUR/JPY up 0.65% to 147.66 late Friday.
In the euro zone, data on Friday showed that the annual rate of inflation slowed to a five year low of 0.3% in November. The weak data was seen as increasing the likelihood that the European Central Bank will implement quantitative easing measures in a bid to spur growth and stave off the threat of deflation.
In the week ahead investors will be focusing on the outcome of a policy meeting of the ECB on Thursday, which is to be followed by the U.S. jobs report for November on Friday.
Monday, December 1
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Wednesday, December 3- The U.S. is to release the ADP report on private sector
job creation. Later Thursday, the ISM is to publish a report on U.S.
service sector activity.
Thursday, December 4- The U.S. is to release the weekly report on initial jobless claims.
Friday, December 5USD/CAD weekly outlook: December 1 - 5
The Canadian dollar slumped to three-week lows against the U.S. dollar on Friday as a selloff in world oil prices overshadowed stronger-than-expected data on Canadian third quarter growth.
USD/CAD rose to highs of 1.1444, the most since November 7 and was last up 0.74% to 1.1414. For the week, the pair gained 1.64%.
The US dollar index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set on Monday.
Oil prices tumbled on Friday following Thursday’s decision by the Organization of the Petroleum Exporting Countries to keep its production quotas unchanged, fuelling fears over a global supply glut.
The steep declines in oil prices overshadowed data Friday showing that Canada’s economy grew at a stronger rate than forecast in the last quarter, boosted by rising exports and increased consumer spending and business investment.
Statistics Canada reported that gross domestic product expanded at an annual rate of 2.8% in the third quarter, outstripping economists forecasts for growth of 2.1%.
Exports were up 2.2% and household spending rose 0.7%, while business investment in residential structures rose 3.0%, the fastest pace since the first quarter of 2012 the report said.
Monday, December 1
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Wednesday, December 3- The BoC is to announce its benchmark interest rate and
publish its rate statement, which outlines economic conditions and the
factors affecting the monetary policy decision.
- The
U.S. is to release the ADP report on private sector job creation, while
the ISM is to publish a report on U.S. service sector activity later in
the day.
Thursday, December 4- The U.S. is to release the weekly report on initial jobless claims.
- Canada is to publish its Ivey PMI.
Friday, December 5AUD/USD weekly outlook: December 1 - 5
The Australian dollar ended Friday's session close to a four-year low as sliding commodity prices weighed on growth-linked assets.
AUD/USD fell to 0.8477 on Wednesday, the pair's lowest since July 2010, before subsequently consolidating at 0.8503 by close of trade on Friday, down 0.46% for the day and 1.94% lower for the week.
The pair is likely to find support at 0.8477, the low from November 26, and resistance at 0.8614, the high from November 27.
Oil prices tumbled following Thursday’s decision by the Organization of the Petroleum Exporting Countries to keep production quotas unchanged, fuelling fears over a global supply glut.
London-traded Brent prices lost $2.43, or 3.35%, to settle at $70.15 a barrel on Friday, while New York-traded crude futures plummeted $7.54, or 10.23%, to close at $66.15 a barrel.
The US Dollar Index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set earlier in the week.
AUD/USD has been under pressure in recent weeks amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
In contrast, minutes of the Reserve Bank of Australia’s most recent meeting indicated that rates were likely to remain on hold for some time to come.
In the week ahead investors will be focusing on the outcome of a policy meeting of the Reserve Bank of Australia on Tuesday, which is to be followed by the U.S. jobs report for November on Friday.
Monday, December 1
- China is to release official data on manufacturing
activity, as well as the HSBC manufacturing index. The Asian nation is
Australia's largest trade partner.
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, December 2- Australia is to release data on building approvals and the current account.
- Later
in the day, the Reserve Bank of Australia is to announce its benchmark
interest rate and publish its rate statement, which outlines economic
conditions and the factors affecting the monetary policy decision.
Wednesday, December 3- Australia is to publish a report on GDP, the broadest
indicator of economic activity and the leading indicator of economic
growth.
- The U.S. is to release the ADP report on
private sector job creation, while the ISM is to publish a report on
U.S. service sector activity.
Thursday, December 4- Australia is to publish data on retail sales and the trade balance, the difference in value between imports and exports.
- The U.S. is to release the weekly report on initial jobless claims.
Friday, December 5