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Sergey Golubev
Moderator
101620
Sergey Golubev  

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

The GBP/USD pair initially tried to break out during the course of the week, but found quite a bit of resistance above the 1.55 handle. This is the top of what we recognize as the potential consolidation area in this general vicinity, and as a result we believe that the market is getting ready to go lower. If we break down lower, and clear the bottom of the range from the week, we believe that this market should then head to the 1.53 level next, and then possibly the 1.50 handle. This isn’t much of a surprise though, because of the large, round, psychologically significant number such as this one is. There is a significant amount of resistance all the way to the 1.58 handle, so as a result even if we break above the top of the shooting star, we believe that this market still cannot be bought until we clear the 1.58 level.

We believe that this market will continue to bang around between the 1.55 handle and the 1.50 level. Because of this, we feel that the market is one that will be difficult to hang onto for the longer term, but if you are patient enough and can deal with the volatility, I believe that this market could offer quite a bit in the way of profit. Even if we break above the top of the shooting star, it’s only a matter time before we form another resistive candle as far as we can tell.

If we do break above the 1.58 handle, the more likely pattern will then be to the 1.60 level. At that level we would anticipate quite a bit of resistance as well, so really this point in time we don’t have any interest in buying this pair. The US dollar continues to be the favored currency by most traders, so of course it will be in this particular pair as well. Whether or not we can get down below the 1.50 level is a completely different question, so we aren’t even addressing that at this point.


Sergey Golubev
Moderator
101620
Sergey Golubev  

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

The EUR/USD pair fell hard during the course of the week, closing towards the bottom of the range. That being the case, looks as if the EUR/USD pair will probably fall from there, heading to the 1.11 handle next, and then the 1.10 level. Any rally this point time should be a nice selling opportunity and we believe that the 1.15 level is massively resistive. We like rallies the show signs of resistance, as it offers value in the US dollar. If we break down below the 1.10 level, this market could very well fall to the parity level next.


Sergey Golubev
Moderator
101620
Sergey Golubev  

EUR/USD Monthly Technical Analysis for March 2015

The EUR/USD posted an inside move and lower close during February. The chart pattern indicates impending volatility and trader indecision, but with a bias to the downside. The close at 1.1193 indicates the consolidation around the major Fibonacci level at 1.1211 may be over, setting the stage for a possible breakdown under the January low at 1.1097.

During February, the market held up considerably well after Greece agreed to an extension of its bailout agreement with the Euro Zone. Some of the consolidation was a spillover from January when the European Central Bank finally announced the long-awaited stimulus plan.

With the Euro Zone still facing growth issues, traders are still heavily short, so any bottoming action will likely be fueled by short-covering rather than aggressive buying. The European Central Bank should leave interest rates unchanged while allowing its stimulus to do its work so the main focus this month will be on the U.S. Non-Farm Payrolls report on March 6.

A strong report will be bearish for the EUR/USD because it will bring the Fed closer to raising rates. Traders are currently pricing in a potential rate hike in June although Fed Chair Janet Yellen said late last month that the central bank was in no hurry to raise interest rates because of a struggling labor market and low inflation.

Weak jobs data won’t necessarily be bullish for the EUR/USD, but it will encourage position-squaring and short-covering, but any gains will be limited.



Technically, the main trend is down on the monthly chart. The close under the long-term Fibonacci level at 1.1211 indicates weakness. If a fresh round of selling pressure starts after the U.S. jobs report then sellers will go after the low for the year at 1.1097. Crossing to the bearish side of a steep downtrending angle at 1.10793 will put the market in an extremely weak position.

The tone of the market this month will be determined by trader reaction to 1.1211. If this area holds as support and momentum gets strong then look for the short-covering rally to extend into at least 1.1687.
Sergey Golubev
Moderator
101620
Sergey Golubev  

Forex technical analysis: EURUSD review for February 2015 and preview for March (based on forexlive article)

The month of February was a "take a breather" month for the EURUSD. That is not much of a surprise given the trend month in January, which saw the pair have an oversized 1003 pips trading range. In February the range was a more modest 357 pips.  

For most of the month, the pair was preoccupied with the headline news from Greece. That "can was kicked down the road" with a four month extension of the loan agreement. Although, there will likely need to be another bailout down the road, the EU (and the market) will deal with that later.  For now there was no Greek exit (or Grexit) and although that bullet was dodged the EURUSD remained in a consolidative range for much of the month. 

The uncertainty from the event (and countless headlines) gave traders the incentive to like the market not love it.  Although the net shorts remained throughout the month (at least from the weekly commitment of traders reports), the action was more two way with a move higher followed by a move lower.  Apart from a strong US employment report at the beginning of the month, the US data was more mixed/disappointing in the month. This too helped contribute to some of the up and down choppy action.

With Greece, settled, traders made a play to the downside on the next to last trading day of the month. The extension to the downside on February 26th, turned the technical bias to the downside going into the new trading month.


Some technical highlights:
  • The high for the month extended up to 1.1533. The high was able to stay below the November 2005 low at the 1.1639 level. This remains a key level on the topside that if the price can stay below, the bears are more comfortable and in control
  • The low could not extend below the January 2015 low (at 1.1097).  As a result, there were "no new lows going back to 2003" in the month.The 1.1097 level is a target level to get and stay below in March for the trend down to resume.
  • The price closed below the 1.12092 level. This is the 61.8% retracement of the move up from the 2000 year low to the 2008 year high. This will be a close resistance level for traders into the new trading month.
  • The price closed the month below the prior month close at 1.12785 area (more bearish).
Looking at the hourly chart (see below):
  • The price moved below the month swing lows on the next to last trading day of the month. Those lows came in between 1.12605 and 1.12790. Into March, that is the risk for shorts. Stay below that ceiling area, and the bears remain in control.  Putting it another way, "The price should not trade back above the 1.12605-79 area.". If it does, there should be further upside momentum in March.
  • The low in trading on Friday found support against a low trend line.  A break below that line is the next downside target for the pair.  That level comes in at 1.1173 area (and moving lower as each hour passes).
Overall, the EURUSD stayed steady for most of February, but ended the month with a more bearish bias.  If that bearish trend continues into March, the pair would next look  toward the 1.0917 high from October 1999, or - on a stretch and trend month - the September 2003 low at 1.0759.   
Conversely, if the market does not find the follow through selling, and there is a move back above the 1.1209 then 1.1260-79 area, the pair would be back in the bellow the the February trading range and I would not be surprised to see the 1.1500 area again.



Sergey Golubev
Moderator
101620
Sergey Golubev  

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

The euro pared back gains against the dollar on Friday after data showed that the U.S. economy expanded modestly in the final three months of 2014, supporting expectations for higher interest rates.

The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.

Other reports showed that U.S. pending home sales rose to a one-and-a-half year high in January and consumer sentiment also remained strong.

The February reading of the University of Michigan's consumer sentiment index was revised up to 95.4 from the preliminary reading of 93.6. While this was down from the previous month final reading of 98.1, it was the second highest level since January 2007.

EUR/USD was at one-month lows of 1.1194 in late trade, off earlier highs of 1.1244.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the day almost unchanged at 95.29, not far from Thursday’s one-month highs of 95.43.

The dollar rallied on Thursday after stronger-than-forecast data on U.S. durable goods orders added to indications that the economic recovery is on track.

Earlier in the week, Federal Reserve Chair Janet Yellen said that if the economy keeps improving as the bank expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.

EUR/JPY was up 0.15% to 133.9 late Friday, recovering from earlier one-month lows of 133.43.

In the week ahead, Friday’s U.S. employment report will be closely watched, while Thursday’s European Central Bank monetary policy meeting will also be in focus.

Monday, March 2

  • The euro zone is to produce preliminary data on consumer prices and a report on unemployment.
  • In the U.S., the Institute of Supply Management is to report on manufacturing activity.

Tuesday, March 3

  • In the euro zone, Spain is to report on the change in the number of people employed.

Wednesday, March 4

  • The euro zone is to release revised data on service sector output, as well as a report on retail sales.
  • The U.S. is to release the ADP non-farm payrolls report, while looks at private sector jobs growth. Later in the day, the ISM is to report on services sector activity.

Thursday, March 5

  • In the euro area, Germany is to release data on factory orders.
  • The ECB is also to announce its monetary policy decision. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi.
  • The U.S. is to release the weekly report on initial jobless claims and data on factory orders.

Friday, March 6

  • The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings and a report on the trade balance.
Sergey Golubev
Moderator
101620
Sergey Golubev  
Weekly Trends, Signals: S&P 500, Gold, Crude Oil, EURUSD, KOSPI, RTS (based on investting.com article)

Sergey Golubev
Moderator
101620
Sergey Golubev  

EUR/USD Drops Below 1.12 (based on marketpulse article)

he dollar edged up on Monday, with an index that tracks the greenback against major currencies touching an 11-year peak even after soft economic data.

The euro, which is off nearly 10 percent in the last three months, had been up by as much as a third of a percent against the dollar on Monday but surrendered gains and last traded flat at $1.1192.

The yen went through 120 against the dollar for the first time since Feb. 12. The dollar was last up 0.50 percent to 120.09 yen, marking a three-week high for the dollar against the yen.  The dollar index was last up 0.14 percent at 95.427 after earlier going as high as 95.514, its highest since September 2003.

Sergey Golubev
Moderator
101620
Sergey Golubev  

Euro Exchange Rate: EURGBP and EURUSD Weakness Forecast to Resume

Eurozone inflation rebounded in February with the annual cost of living standing at -0.3%, up from -0.6% in January, the EU statistics agency Eurostat said in preliminary data.

Markets had expected a reading of -0.5%; the positive surprise got the shared currency off to a strong start.

Any upside surprises in Eurozone data will have notable impacts on the EUR owing to the massive amount of negative bets currently placed against the currency.

Contrast this to the pound sterling which hardly moved in response to March’s positive Manufacturing data. It will take blow-out positive data surprises to shift the GBP precisely because the market is so massively aligned behind the currency.

Dennis de Jong, managing director at UFX.com, comments on the EU deflation numbers:

“Mario Draghi would have had his fingers crossed before the consumer price index figures were released this morning, and though the results were better than expected, the outlook for Europe is still precarious.

“At least Draghi isn’t alone in fighting deflation. Of the 28 countries in the EU, 23 are officially in deflation and the UK looks likely to make it 24 in a few weeks’ time. Having already embarked on a massive bond buying programme, and with interest rates already at historic lows in many member countries, it’s difficult to see how Draghi and Co. will be able to escape deflation anytime soon.”

Euro Exchange Rate: EURGBP and EURUSD Weakness Forecast to Resume
Euro Exchange Rate: EURGBP and EURUSD Weakness Forecast to Resume
  • 2015.03.03
  • Will Peters
  • www.poundsterlinglive.com
Further EGB purchase details from the ECB; continued stabilisation in euro area activity shouldn’t disturb EURUSD downtrend." - Barclays.  While we are seeing relief buying of the euro at the onset of the new trading month, the outlook remains resolutely negative in the long-term timeframes. Studies contained in this report give readers an...
Sergey Golubev
Moderator
101620
Sergey Golubev  

EUR/USD slips close to 11-1/2 year lows on Draghi remarks

On Thursday, Draghi confirmed that the ECB will begin purchasing euro zone government bonds on March 9 under its new quantitative easing program.

The combined asset purchases will amount to €60 billion per month and are expected to run until September 2016, or until the ECB sees that inflation is on a "sustained path" to its target of close to, but below, 2% in the medium term.

In addition, the ECB raised its growth forecast for this year to 1.5% from 1.0% previously, followed by faster growth in 2016 and 2017.

But it cut its inflation forecast for 2015, saying it now expects inflation to be flat, down from 0.7% previously. It then expects inflation to increase to 1.5% in 2016, up from 1.3% and 1.8% in 2017.

Meanwhile, sentiment on the dollar remained fragile after data on Thursday showed that the number of Americans who filed for unemployment assistance rose by 7,000 to 320,000 last week from the previous week's total of 313,000.

The euro was also lower against the pound, with EUR/GBP edging down 0.10% to 0.7229.

Later in the day, the U.S. was to release the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings.

Forex - EUR/USD slips close to 11-1/2 year lows on Draghi remarks
Forex - EUR/USD slips close to 11-1/2 year lows on Draghi remarks
  • Investing.com
  • www.nasdaq.com
Investing.com - Investing.com - The euro slipped lower against the U.S. dollar on Friday, to trade close to Thursday's 11-1/2 year lows as European Central Bank President Mario Draghi's comments continued to weigh on the single currency. EUR/USD hit 1.1015 during late Asian trade, the session low; the pair subsequently consolidated at 1.1019...
Sergey Golubev
Moderator
101620
Sergey Golubev  

Forex Weekly Outlook Mar. 9-13 (based on forexcrunch aricle)

The US dollar had an excellent week, soaring across the board, most notably against the plunging euro. A rate decision in New Zealand, Employment figures from Australia and Canada, Retail sales, PPI, Unemployment claims and Consumer sentiment from the US are the top events on FX calendar. Let’s see, in detail, the main market movers for this week.

Yet another robust reading from the US job market. The all-important NFP release showed a strong gain of 295,000 positions in February while and the jobless rate fell to a 6.5 year low of 5.5%. The disappointment came from slow wage growth. This raises the chances of a rate hike in June. This boosted the dollar across the board. In the euro-zone, Draghi showed determination on implementing QE, and the euro plunged. The pound followed suit. Elsewhere, an upbeat BOC helped CAD, while no cut from the RBA kept AUD bid. All was lost when the NFP numbers came in.

  1. NZ rate decision: Wednesday, 20:00. New Zealand’s central bank decided to keep its benchmark Official Cash Rate at 3.5%. The decision was in line with market forecast, however, the RBNZ maintained a tightening policy bias due to weaker than expected growth but stated that future rate adjustments will depend on economic data.  RBNZ Governor Graeme Wheeler also voiced his concerns about the unjustified strength of the kiwi and its downside risks to exports. Economists expect the RBNZ will maintain rates this time.
  2. Australian employment data: Thursday, 0:30. Australian labor market contracted by 12,200 positions in January pushing the unemployment rate to its highest level in 13 years reaching 6.4%. Both readings were worse than expected. Analysts forecasted a job loss of 4,700, expecting only a minor rise of 0.1% in the unemployment rate. Full-time employment fell by 28,100 in January and part-time employment was up 15,900. Australian labor market is expected to expand by15,300 while the unemployment rate is predicted to remain at 6.4%.
  3. US Retail sales: Thursday, 12:30. U.S. Retail sales slipped 0.8% in January as consumer spending decreased, suggesting the economy started the first quarter on a weaker note. Despite cheap gasoline prices, sales did not pick-up. Economists speculate that consumers were using the extra income to reduce debt and boost savings. Retail sales excluding automobiles, gasoline, building materials and food services plunged 0.9% following a 1.0% slide in the previous month. Retail sales  is expected to gain 0.5%, while Core sales are expected to rise 0.6%.
  4. US Unemployment Claims: Thursday, 12:30.  More Americans filled applications for unemployment benefits last week as the long winter stalled further progress in US labor market. Jobless claims edged up 7,000 to 320,000, the highest since May 2014. Analysts expected a lower figure of 293,000. However, the rise in the number of applications does not affect the positive trend in the job market. The four-week average of claims increased to 304,750 from 294,500 the week before.  The number of claims is expected to  reach 317,000 this week.
  5. Canadian employment data: Friday, 12:30. The Canadian labor market was boosted by a part-time jobs gain in January, adding 35,400 new positions, well above the 4,700 increase forecasted by analysts. However the report was disappointing since 11,800 full-time positions were lost and the better than expected 6.6% unemployment rate was due to part time job gains. Analysts expect Canadian job figures to decline in the coming months as part-time workers are struggling to find full-time employment and the falling oil prices will also have a negative effect on the labor market. Canadian job market is expected to add 21,300 while the unemployment rate is expected to decline to 6.5%.
  6. US PPI : Friday, 12:30. U.S. producer prices plunged 0.8%, recording their biggest decline in more than five years due to the ongoing erosion in energy prices. Economists expected a smaller fall of 0.4%. Core prices excluding food, energy, and trade also fell 0.1% after a 0.3% gain in December. Producer prices are predicted to rise 0.2%.
  7. US UoM Consumer Sentiment: Friday, 14:00. Consumer confidence dropped in February to 93.6 after seven months of gains due to a rise in gasoline prices shifting Americans’ optimism about the economy. The preliminary sentiment index declined to 93.6 from the final January reading of 98.1 the highest since 2004. Economists expected a further rise in sentiment to 98.2. Energy an oil related workers were more concerned about their jobs in case of a fall in production. Consumer sentiment is expected to rise to 95.6.