Press review - page 275

Sergey Golubev
Moderator
113440
Sergey Golubev  

USD/JPY forecast for the week of February 2, 201, Technical Analysis

The USD/JPY pair tried to rally during the course of the week, but as you can see struggled a bit and formed a shooting star. It is because of this that we believe that the market will different here, probably looking for support at the 115 level. We have no interest in selling this market, and look at the upcoming dip as a potential buying opportunity. We will look for supportive candles, and then start buying the US dollar on perceived value. We have no interest in shorting because of the central bank attitudes, as the Bank of Japan continues to work against the value of the Yen.


Sergey Golubev
Moderator
113440
Sergey Golubev  

USD/CHF forecast for the week of February 2, 2015, Technical Analysis

The USD/CHF pair broke higher during the course of the week, slicing through the 0.90 handle. However, this market is most certainly in a downtrend now after the impulsive candle that we had seen a couple of weeks ago, so we are still interested in selling and not interested in buying. With that, the 0.95 level above should now be resistive, and we are looking for some type of resistant candle in that region in order to start selling. With that, we have no interest in buying this market.


Sergey Golubev
Moderator
113440
Sergey Golubev  

USD/CAD forecast for the week of February 2, 2015, Technical Analysis

The USD/CAD pair broke higher during the course of the week, slicing through the 1.25 level. That being the case, it appears that the market should continue to go higher, but we may need to see a little bit of a pullback in order to continue the momentum higher. This is especially true considering that we formed a shooting star for the session on Friday, but ultimately we are obviously in an uptrend. The market should now head to the 1.30 level, and as a result we look at pullbacks as opportunities to pick up the US dollar “on the cheap.”


Sergey Golubev
Moderator
113440
Sergey Golubev  

NZD/USD forecast for the week of February 2, 2015, Technical Analysis

The NZD/USD pair initially tried to rally during the course of the week, testing the 0.75 level. That being the case, the market looks as if it’s ready to continue falling, and as a result we are still very bearish. The Royal Bank of New Zealand suggested during an interest-rate meeting that interest rates are not necessarily going to stay where they are, and the cuts are in fact possible. That being the case, it appears that the market should continue to drop from here and head towards the 0.70 handle. That being the case, we remain very bearish of this market but also recognize that it might be easier to trade on the daily charts. However, longer-term traders will probably take selling opportunities as we rally, and with that being the case the market should continue to be bearish.

With that, we should also keep in mind that the Royal Bank of New Zealand has recently stated that the “fair value” of this pair is closer to the 0.68 level, and as a result they will probably get that given enough time. On top of that, you have to keep in mind that the Royal Bank of New Zealand has recently jumped into the Forex markets in order to sell this pair and drag it lower.

With all that being said, you have to keep in mind that the US dollar is the favored currency by far with perhaps the one exception being the Swiss franc, sell this pair should continue to drift lower. In fact, we have to now wonder whether or not we are going to get below the 0.68 handle even. In fact, we should see this pair as one that we can continue to sell again and again every time we rally. Remember, the New Zealand dollar is highly sensitive to commodity markets as well, and of course those are not doing fairly well in general and that should continue to keep the demand for the New Zealand dollar lower going forward at this point.


Sergey Golubev
Moderator
113440
Sergey Golubev  

GBP/USD forecast for the week of February 2, 2015, Technical Analysis

The GBP/USD pair initially tried to rally during the course of the week, but as you can see sold off to form a shooting star. The shooting star is sitting just on top of the 1.50 level though, and that is massively supportive. In fact, we believe that the support goes all the way down to the 1.48 level so it is going to be difficult to break down from here. It’s not that we don’t think it will, it’s just a matter of taking the easiest trades possible. This is not going to be one of them.


Sergey Golubev
Moderator
113440
Sergey Golubev  

EUR/USD forecast for the week of February 2, 2015, Technical Analysis

The EUR/USD pair broke higher during the course of the week, but fell at the 1.14 level to turn things back around and form a little bit of a shooting star. That being the case, we feel that the market is going to continue lower, trying to reach the 1.10 level. Ultimately, we believe that rallies continue to offer selling opportunities, and a break below the 1.10 level probably opened the door way to the 1.00 level in the longer run. We have absolutely no interest in buying this pair although we recognize it has been oversold.


Sergey Golubev
Moderator
113440
Sergey Golubev  

EUR/USD weekly outlook: February 2 - 6 (based on investing.com article)

The euro dipped against the dollar and yen on Friday, after data showed that deflation in the single currency bloc deepened in January and amid growing concerns over Greece's future in the euro zone.

Eurostat said that the annual rate of euro zone inflation fell by 0.6% in January, after a 0.2% slip in December. Economists had expected an annual decline of 0.5%.

Meanwhile, Greece’s new government said it will not cooperate with the International Monetary Fund and the European Union and will not seek an extension to its bailout program, underlining fears over a clash with its international creditors.

EUR/USD fell 0.27% to close at 1.1287. For the week, the pair rose 0.71%, the first weekly gain in seven weeks.

The euro ended the month down 6.71% against the dollar after European Central Bank unveiled a €1.2 trillion quantitative easing program last week.

Elsewhere, EUR/GBP dipped 0.21% to settle at 0.7496 on Friday, paring the week’s gains to 0.19%, while EUR/JPY slumped 0.93% to close at 132.66.

Meanwhile, the dollar remained in demand as investors reacted to data showing the U.S. economy grew less than expected in the fourth quarter.

The Commerce Department said in a report that the economy expanded 2.6% in the final three months of 2014, below expectations for a 3.0% gain and slowing sharply from growth of 5.0% in the three months to September.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the week at 95.00, down 0.01% for the day and 0.33% lower on the week.

The dollar had strengthened broadly on Thursday after the Federal Reserve indicated that interest rates could start to rise around mid-year.

Following its policy meeting on Wednesday, the Fed said it would keep rates on hold at least until June and reiterated its pledge to be patient on raising interest rates, while acknowledging the solid economic recovery and strong growth in the labor market.

In the commodities market, oil prices scored their biggest one-day gain since June 2012 amid indication that U.S. producers may be pulling back on new production in response to low prices.

Nymex oil futures surged $3.71, or 8.33%, to $48.24 a barrel, while London-traded Brent prices soared $3.86, or 7.86%, to $52.99.

Gold was also well-supported, with prices tacking on $23.30, or 1.86%, to close at $1,279.20 following the release of weaker than expected U.S. GDP data.

In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market.

Monday, February 2

  • In the euro zone, Spain is to release data on the change in the number of people employed.
  • In the U.S., the Institute of Supply Management is to release data on manufacturing activity. The country will also produce a report on personal income and spending.

Tuesday, February 3

  • The U.S. is to release data on factory orders.

Wednesday, February 4

  • The euro zone is to publish a report on retail sales.
  • The U.S. is to release a report on ADP nonfarm payrolls. Later in the day, the Institute of Supply Management is to release data on non-manufacturing activity.

Thursday, February 5

  • The U.S. is to produce its weekly report on initial jobless claims in addition to data on the trade balance.

Friday, February 6

  • The U.S. is to round up the week with the closely watched nonfarm payrolls report, and data on wage growth.
Sergey Golubev
Moderator
113440
Sergey Golubev  

Forex - Weekly outlook: February 2 - 6 (based on investing.com article)

The U.S. dollar was mostly lower against its major counterparts on Friday, as investors reacted to data showing the U.S. economy grew less than expected in the fourth quarter.

The Commerce Department said in a report that the economy expanded 2.6% in the final three months of 2014, below expectations for a 3.0% gain and slowing sharply from growth of 5.0% in the three months to September.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the week at 95.00, down 0.01% for the day and 0.33% lower on the week.

The dollar slid lower against the safe haven yen, with USD/JPY down 0.69% to 117.50 in late trade, amid weakness in U.S. equities following the lackluster GDP data.

The Dow Jones fell 251.90 points, or 1.45%, while the S&P 500 declined 26.26 points, or 1.3%.

Meanwhile, the euro was under pressure after data showed that deflation in the single currency bloc deepened in January and amid growing concerns over Greece's future in the euro zone.

Eurostat said that the annual rate of euro zone inflation fell by 0.6% in January, after a 0.2% slip in December. Economists had expected an annual decline of 0.5%.

Greece’s new government said it will not cooperate with the International Monetary Fund and the European Union and will not seek an extension to its bailout program, underlining fears over a clash with its international creditors.

The Canadian dollar was also hard-hit after Statistics Canada said the country's gross domestic product fell 0.2% in November, compared to expectations for a 0.1% downtick and after a 0.3% gain in October.

The Australian dollar weakened to a five-and-a-half year low against the greenback amid growing expectations for an interest rate cut in Australia next week.

Elsewhere, the Swiss franc strengthened against the other major currencies on Friday, amid heightened expectations for further intervention by the Swiss National Bank in the currency market (USD/CHF, EUR/CHF).

Meanwhile, the dollar rallied 1.74% against the Russian rouble to end at 70.05 after Russia's central bank unexpectedly cut its benchmark interest rate to 15.0%, one month after surprising markets by hiking rates to 17.0%.

In the commodities market, oil prices scored their biggest one-day gain since June 2012 amid indication that U.S. producers may be pulling back on new production in response to low prices.

Nymex oil futures surged $3.71, or 8.33%, to $48.24 a barrel, while London-traded Brent prices soared $3.86, or 7.86%, to $52.99.

Gold was also well-supported, with prices tacking on $23.30, or 1.86%, to close at $1,279.20 following the release of weaker than expected U.S. GDP data.

In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market.

Central bank policy meetings in the U.K. and Australia will also be in focus.

Monday, February 2

  • China is to release a report on the HSBC manufacturing index.
  • In the euro zone, Spain is to release data on the change in the number of people employed.
  • The U.K. is to publish its manufacturing index.
  • In the U.S., the Institute of Supply Management is to release data on manufacturing activity. The country will also produce a report on personal income and spending.

Tuesday, February 3

  • Australia is to release data on building approvals and the trade balance. 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.
  • The U.K. is to publish a report on construction sector activity.
  • The U.S. is to release data on factory orders.

Wednesday, February 4

  • New Zealand is to release data on the change in the number of people unemployed and the unemployment rate.
  • Elsewhere, China is to publish its HSBC service sector index.
  • The euro zone is to publish a report on retail sales.
  • The U.K. is to publish a report on service sector activity.
  • The U.S. is to release a report on ADP nonfarm payrolls. Later in the day, the Institute of Supply Management is to release data on non-manufacturing activity.
  • Canada is to publish its Ivey PMI.

Thursday, February 5

  • Australia is to publish data on retail sales.
  • The Bank of England is to announce its monetary policy decision.
  • The U.S. is to produce its weekly report on initial jobless claims in addition to data on the trade balance.
  • Canada is also to report on its trade balance.

Friday, February 6

  • The RBA is to publish its monetary policy statement.
  • The Swiss National Bank is to publish a report on foreign currency reserves.
  • The U.K. is to produce a report on the trade balance.
  • Canada is to report on building permits and the change in the number of people employed and the unemployment rate.
  • The U.S. is to round up the week with the closely watched nonfarm payrolls report, and data on wage growth.
Sergey Golubev
Moderator
113440
Sergey Golubev  

Yen firms, Aussie slips on China growth worries (based on reuters article)

  • Yen hits 11-month high vs Australian dlr, stays broadly firmer

  • China official PMI falls below 50 for first time in over 2 years

  • China PMI, fall on Wall St adds to risk-off mood

"The weaker China PMI is likely to reinforce the market's current negative bias towards commodity currencies and those linked closely to the China growth story," said Jonathan Cavenagh, currency strategist at Westpac.
"We believe that the likelihood of a Greek exit is now significantly higher than at any point in 2012, in view of the latest political events," analysts at Barclays wrote in a note to clients.

Sergey Golubev
Moderator
113440
Sergey Golubev  

2-for-1 Indicator, the Donchian Channel (based on dailyfx article)

  • Donchian creates a channel that encapsulates price.
  • Trade entries can be made when Donchian is broken.
  • Stop losses can be created from the opposing channel line.