Press review - page 297

Sergey Golubev
Moderator
113476
Sergey Golubev  

EUR/USD Technical Analysis: Aiming Above 1.12 Figure (based on dailyfx article)


The Euro rose as expected against US Dollar, with prices now poised to make a move above the 1.12 figure. Near-term resistance is at 1.1263, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 1.1513. Alternatively, a reversal below 1.0955 (trend line resistance-turned-support, 23.6% retracement) clears the way for a test of the 1.0456-541 area (March 16 low, the 23.6% Fib expansion).

  • Support: 1.0955, 1.0456, 1.0233
  • Resistance:1.1263, 1.1513, 1.1762

Our long-term outlook envisions Euro weakness. With that in mind, we will treat any on-coming upswing as corrective and look to enter short once signs of a renewed turn lower emerge. In the meantime, we will remain on the sidelines.

Sergey Golubev
Moderator
113476
Sergey Golubev  

Gold nears $1,200 in 6-day winning streak (based on marketwatch article)

  • Gold futures rebounded from early weakness and posted a sixth straight winning session on Wednesday after an unexpected drop in February durable-goods orders.
  • Gold for April delivery rose $5.60, or 0.5%, to close at $1,197 an ounce on Comex after tapping an intraday high of $1,199.30. The close was the highest since March 4.
  • May silver rose 2 cents, or 0.1%, to settle at $17 an ounce.

Meanwhile, David Govett of Marex Spectron isn’t buying into this recent stretch of strength for gold. “I cannot see the Fed raising rates in the near future with inflation non-existent, so the current dollar weakness may be with us for a while,” he said. “However, it will happen at some stage and with the rest of the world on an economic slowdown, the U.S. may be the only game in town. In the long run, I would still want to be long dollars, short precious metals.”

Sergey Golubev
Moderator
113476
Sergey Golubev  

AUDIO - Fed, Money & Commodities with Scott Greer


Merlin and Scott scour the markets for trading opportunities which are abundant given the recent fed meeting! The duo takes a look at the essence of the feds actions as well as how it has impacted the US Dollar and the global commodity markets.

Sergey Golubev
Moderator
113476
Sergey Golubev  

EUR/USD Continues to Put Pressure on the 1.1040 Resistance (based on forexminute article)

EUR/USD rallied from 1.0462 to 1.1040 last week. The main bullish breakout move followed the FOMC statement. After that, there was a sharp pullback, but that held above 1.06 and maintained a bullish outlook. Let’s follow up on the price action since this breakout and confirmation.

The 4H chart shows that price has continued to threaten the 1.1040 resistance. During the 3/24 session, there was a bearish engulfing candle. However, this candle failed to extend the retreat and price held above 1.09. This suggests that the bulls in this market is in control in the short-term.

Also note the 200-period SMA just above 1.1040. A break above 1.1050 is likely to open up further bullish correction. When we look at the daily chart, we can see some room to rally until a key pivot around 1.1270. If price stalls here, and the daily RSI also stalls around 60, be ready for a bearish attempt at least to test the 1.09 level that acted as support in the previous couple of sessions.


Sergey Golubev
Moderator
113476
Sergey Golubev  

EUR/USD Mid-Session Technical Analysis for March 26, 2015 (based on fxempire article)

The EUR/USD is trading better at the mid-session. Overnight, the market held a key 50% level at 1.0956 and is also trading on the bullish side of a downtrending angle at 1.0949, indicating that more than short-covering may be going on. Both of these levels are new support.

If 1.0949 fails as support then look for an acceleration to the downside with a steep uptrending angle at 1.0822 the next downside target.

With the EUR/USD chewing through a high at 1.1025 and a closing price reversal top at 1.1028, traders have set their sights on the Fibonacci level at 1.1072. There could be a technical bounce at this level since the main trend is down, but this price is also a potential trigger point for an upside breakout.

If 1.1072 is taken out with conviction then look for a possible acceleration into 1.1168. This is followed by another angle at 1.1199 and a major, long-term 61.8% level at 1.1211.

Look for a bullish tone to develop over 1.1072 and a bearish tone under 1.0956.

Sergey Golubev
Moderator
113476
Sergey Golubev  

EURUSD Morning Reversal- EURUSD Opens to a False Breakout (based on dailyfx article)


The EURUSD has opened the day with a false breakout in early London trading. Prices moved above resistance found at the R4 Camarilla pivot near 1.1031, but quickly slipped back into the pivot range. Range resistance begins at the R3 pivot found at the psychological 1.1000 price point. Immediately price continued to decline down to range support found at the S3 pivot at a price of 1.0937.
Currently price is again trading outside of its 63 pip range. In the event that price begins to decline further, trend traders may elect to look for a breakout under the S4 pivot. This would signal a potential increase in USD strength and traders would look for a reversal back in the direction of the markets predominant trend. Conversely, if price moves back inside of range support, this may temporarily suspend any further attempts at a market breakout.

Sergey Golubev
Moderator
113476
Sergey Golubev  

AUDIO - Mapping the future with Darek Zelek

The Federal Reserve is on the verge of raising rates for the first time in 9 years! What will the impacts be, and how can you position your portfolio to reap the biggest rewards? Tune in to find out how long term investors should embrace these upcoming market changes. Darek and Merlin also look at listener questions regarding gap protection and employee sponsored 401k programs.


Sergey Golubev
Moderator
113476
Sergey Golubev  

Barclays says ... (based on forexlive article)

"The two key drivers of the multi-year downtrend in the EUR remain in force. In our view, remain the two that we identified last summer: 1) persistently low expected returns to capital in the euro area due to its relatively larger output gap and its structural impediments to growth; and 2) an Odyssian commitment by the ECB to a long period of low (or negative) interest rates. Both forces continue to augur for a much lower EUR, despite an encouraging pick-up in euro area economic indicators and a likely slowing in the pace of Fed tightening," Barclays argues.

"In particular, as long as the ECB is committed to highly elastic provision of liquidity, the EURUSD will struggle to find its footing and risks come primarily from the US economy. In our view, a stabilization or turn in the EUR will require a sustained and convincing pickup in real investment or acceleration in core inflation that all into question the ECB's commitments. Neither appears on offer anytime soon," Barclays adds.


2-way risks:

"Two-way risks almost certainly have risen and we do not expect the torrid pace of EUR depreciation to be sustained. But the two drivers of EUR weakness appear strong, suggesting to us that the EUR still has much further to fall in its multi-year downtrend," Barclays argues.

How much lower?

"After plunging 23% in 10 months, the question of how much further EURUSD can drop has moved to the fore...We now expect EURUSD to fall to parity by Q3 15 and to 0.95 by end Q1 16," Barclays projects.
Sergey Golubev
Moderator
113476
Sergey Golubev  

Forex Weekly Outlook Mar 30-Apr 3 (based on forexcrunch article)

Canadian GDP, US Consumer Confidence, Trade Balance and important employment data including ADP Non-Farm Employment Change and the all-important Non-Farm Payrolls. Join us as we explore the top events of this week.

Last week, US labor market continued to improve with a decline in the number of jobless claims, reaching 282,000. Robust job creation and better employment conditions have strengthen the labor market spurring growth. However, the final GDP release for the fourth quarter of 2014 slightly disappointed remaining unchanged at 2.2%, below the 2.4% forecast. Despite a 4.4% jump in consumer spending, the economy shrank at an annual rate of 2.1% in the first quarter due to severe winter storms. Nevertheless, economists forecast stronger growth in the coming months, as the labor market continues its positive expansion trend.

  1. Canada GDP: Tuesday: 12:30. The Canadian economy expanded 0.3% in December, exceeding analysts’ expectations for a 0.2% gain. The reading was preceded by a 0.2% contraction in November. On a yearly base, GDP edged up 2.5% in 2014. The annual growth rate in the fourth quarter reached 2.4%, below the 3.2% posted in the third quarter. Household spending continued to be the main force in the Canadian economy increasing consumption expenditure by 2.0% on an annualized basis. Exports of goods fell 2.5%, exports of crude oil declined 6.5% and exports of refined petroleum products slumped 36.3%. Economists forecast a 0.2%growth rate in January.
  2. US CB Consumer Confidence: Tuesday, 14:00. Consumer confidence declined more than expected in February reaching 96.4 from 103.8 in January. Economists expected a smaller drop to 99.6. Current declined to 110.2 from a revised 113.9 in January. Consumer outlook for the next six months dropped to 87.2 from a revised 97.0. Consumers were less optimistic about job prospects. However, despite the lower figures, the general level show positive trend. Consumer confidence is predicted to reach 96.6 in March.
  3. US ADP Non-Farm Employment Change: Wednesday, 12:15. U.S. private sector gained 212,000 jobs in February following an upwardly revised reading of 250,000 in the previous month. The release was below expectations. The manufacturing and the services sectors improved the most. However, despite the weaker job gain, the private sector’s outlook remains bright. Analysts expect a 231,000 job gain in the US private sector for March.
  4. US ISM Manufacturing PMI: Wednesday, 14:00. US manufacturing sector weakened in February, dropping 0.6 points to 52.9. The reading was worse than the 53.4 points forecasted by analysts, however, the reading remained above the 50 point line, indicating continued growth. New orders fell 0.4 points to 52.5 while factory activity dropped from 56.5 in January to 53.7. Manufacturing employment also slipped from 54.1 to 51.4. Manufacturing exports continued to contract in February to 48.5, while imports softened, from 55.5 to 54. US manufacturing PMI is expected to reach 52.5 this time.
  5. US Trade Balance: Thursday, 12:30. The U.S. trade deficit narrowed in January to $41.8 billion amid weakening in exports and imports. The 8.3% fall was broadly in line with market forecast. Imports contracted due to lower oil prices and labor strikes disrupting shipping of goods. Exports fell $5.6 million to $189.4 billion while imports dropped $9.4 billion to $231.1 billion. However, domestic production increased due to low oil prices and petroleum imports fell 23% to $17.7 billion. The U.S. trade deficit  is expected to contract further to $41.5 billion.
  6. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial claims for unemployment benefits declined more than expected last week, reaching 282K after a 291,000 addition in the prior week. The 9,000 drop continues to suggest an ongoing improvement in the US job market despite the recent volatility due to the harsh weather, softer global demand and the strong dollar. The four-week moving average fell 7,750 to 297,000 last week. The number of jobless claims is expected to reach 285,000 this week.
  7. US Non-Farm Employment Change and Unemployment rate: Friday, 12:30.  U.S. job creation strengthened in February rising 295,000 and lowering jobless rate to a more than 6-1/2 year low of 5.5%. Job gain was stronger despite harsh weather conditions disrupting activity. The report supported the Fed’s rate hike move planned in June. Average hourly earnings edged up by three cents and further gains are expected. The participation rate in the US labor market has been steady at a 5-1/2 year high of 59.3%. US private sector is expected to gain 251,000 positions while the unemployment rate is expected to remain at 5.5%.
Sergey Golubev
Moderator
113476
Sergey Golubev  

US Dollar Fundamentals (based on dailyfx article)

Fundamental Forecast for Dollar: Bullish

  • NFPs are scheduled for release on Good Friday – key event risk stirring a key trend on a low liquidity day
  • After Yellen’s remarks, the focus intensifies on Fed timing with FF futures still dovish but swaps hawkish


The Dollar came dangerously close to a nasty speculative spill this past week. While the medium-term fundamental picture supports the currency’s progress over its counterparts, there is enough evidence that the market has ran beyond its quantifiable advantage and is therby exposed to a rebalance. However, it seems to realize a correction in the Dollar’s incredible run, their needs to be a more motivated thrust for profit taking. Soon to close out a record nine consecutive month rally (on the ICE Dollar Index), we face a market more sensitive to week-to-week event risk and a docket that can strike exposed nerves.

With a ‘trader’s’ mentality in mind, bulls head into the new trading week with a little more breathing room. Fed Chairwoman Janet Yellen lended support to to the run in her Friday afternoon speech. As is her method, she offered enough balance to her comments to feed both a dove’s and a hawk’s convictions on where monetary policy is heading. Though potentially interpretive, Yellen remarked that they should not wait until they have returned to the 2 percent inflation target before they move. Given it takes time for policy to filter into the economy, that makes sense. However, from an investor’s perspective, this fits a concerted effort made by the central bank to ready the market for the inevitable – with heavy insinuation that it can happen earlier than many expect.

Indeed, when we look at what the market’s expectations for pricing in monetary policy paths, it is clear that there is plenty of room for adjustment on both sides. The Dollar is perhaps one of the most hawkish reflecting instruments, but that may be due in part to its exceptionally dovish counterparts (particularly the BoJ and ECB). On the other end of the spectrum, we find Fed Fund futures – specifically tailored to hedging rate forecasts – pricing the first hike way out into November and no follow up until March/April of next year. This is enough skepticism in the market that a steady march to mearly meet what is the consensus amongst analysts, economists and primary dealers can generate further Dollar gains.

After the FOMC rate decision two weeks ago and Yellen’s remarks this past week, it is clear that the first hike is increasingly data dependent. That will emphasize the importance of significant fundamental developments in the rates picture. In the register of event risk, few items will outshine the BLS labor conditions report for influence. That said, the March update is due on Friday (Good Friday). From this data though, the wage growth report should be paid specific attention. This is the connection between labor growth and inflation. And, on the topic of inflation, the Fed’s preferred reading – the PCE deflator – is due on Monday. And, between those two high profile book ends, we have no fewer than 10 Fed speeches scheduled. This should be an interesting, speculative week.