EURUSD Attempts Post News Breakout (based on dailyfx article)
The EURUSD has opened the trading day range bound,
with the pair moving between its R3 and S3 Camarilla pivot points. Price
has traversed this 73 pip range twice thus far, with price currently
trading above its R3 pivot which is found today at 1.0720. Despite being
range bound for most of the session, traders should continue to watch
the R4 pivot found at 1.0755. Price has already attempted to break this
value once this morning on worse than expected initial jobless claims
data. A breakout above this value would suggest the potential for higher
highs for the EURUSD.
In the event that price trades back below its R3 pivot, it opens the possibility of another move back towards values of support. Currently
range support sits at a price of 1.0647 at the S3 pivot. A continued
decline below the S4 pivot at a price of 1.0611 would suggest a larger
reversal on the creation of a lower low.
EUR/USD: BNP say Greek deal unlikely by April 24, see a May deal to avoid default (adapted from forexlive article)
AUDIO - Across the World with Vishal Subandh
Merlin welcomes trader & educator, Vishal Subandh to
the show to discuss how the Indian markets have been fairing over the
past few months. The duo talk about the preferred trading vehicles, and
the subtle differences between the US and India. Vishal also offers his
insights into the direction of the Nifty index, Crude Oil, US dollar and
Technical Analysis for EURUSD - Elliot Wave view from Morgan Stanley (based on forexlive article)
15-year chart saying:
The analysts comes in to a 2-year timeframe:
Trading the News: U.S. Consumer Price Index (CPI) (based on dailyfx article)
The U.S. Consumer Price Index (CPI) may prop up the greenback and spark a near-term decline in EUR/USD should the inflation report highlight sticky price growth in the world’s largest economy.
Why Is This Event Important:
Despite signs of a slower recovery, the Federal Open Market Committee (FOMC)
may continue to prepare U.S. households and business for higher
borrowing-costs as Chair Janet Yellen remains confident in achieving the
2% inflation target over the policy horizon.
How To Trade This Event Risk
Bullish USD Trade: U.S. Headline & Core CPI Highlight Sticky Price Growth
Bearish USD Trade: Consumer Price Index Falls Short of Market Forecast
Potential Price Targets For The Release
if actual > forecast (or previous data) = good for currency (for AUD in our case)
[USD - CPI] = Change in the price of goods and services purchased by consumers. Consumer prices account for a majority of overall inflation. Inflation
is important to currency valuation because rising prices lead the
central bank to raise interest rates out of respect for their inflation
U.S. Consumer Prices Rise 0.2% For Second Straight Month In March
While the Labor Department released a report on Friday showing
another modest increase in U.S. consumer prices in the month of March,
prices rose by slightly less than economists had anticipated.
Labor Department said its consumer price index edged up by 0.2 percent
in March, matching the increase seen in February. Economists had
expected the index to rise by 0.3 percent.
The continued increase
in prices was partly due to another notable increase in energy prices,
which rose by 1.1 percent in March after climbing by 1.0 percent in
The gasoline index showed its biggest increase since
February of 2013, surging up by 3.9 percent, while the fuel oil index
also jumped by 5.9 percent.
However, the increase in energy
prices was partly offset by a drop in food prices, as the food index
fell by 0.2 percent in March after rising by 0.2 percent in February.
Forex Weekly Outlook April 20-24 (based on forexcrunch article)
Inflation data in New Zealand and Australia, Poloz and Stevens’ speeches, German ZEW Economic Sentiment and German Ifo Business Climate, US Unemployment Claims and Durable Goods Orders are the highlights of this week. Here is an outlook on the top events on Forex calendar.
Last week, US data disappointed with weaker than expected housing and employment data as well as soft retail sales. Jobless claims rose 12,000 to 294K, building permits came reached 1.04 million while forecasted 1.08 million and housing starts hardly recovered with 0.93 million. Retail sales registered a 0.9% increase, below the 1.1% rise predicted and Core sales gained 0.4% far below the0.7% expected. However, the Philadelphia Fed Manufacturing Index surprised with 7.5 points vs. 5 in the previous months exceeding forecasts for a 6.5 points reading. Will the US data stabilize this week?
EURUSD tests resistance again (based on forexlive article)
The weekend flows can wreck havoc. Greece will be in play over weekend
(and going forward). As a result geo-political risk have the potential
to lead to more squaring up and choppy trading action -especially in the
EUR/USD: Momentum Shifts - BTMU (based on efxnews article)
EUR/USD is still trading within the 1.05-1.10 range that has been
mainly intact for most of March and April, and in that sense the best
bias to have for the week ahead is probably neutral, notes Bank of Tokyo
"The momentum though appears to be shifting back toward a
higher move with EUR/USD moving that way in the aftermath of the
monetary policy press conference by President Draghi. While the ECB is a
little more upbeat we do not think that will help the euro," BTMU adds.
"The IMF/G20 gathering in Washington may well result in some comments on the dollar
– a G20 statement may refer to FX in a slightly different way and this
is a risk to the upside for EUR/USD. Any sense that officials are
getting more worried about the speed of dollar strength may prompt
selling. However, this is unlikely to be sustained for long – the
reality is that monetary policy divergence is set for some considerable
time," BTMU argues.
"Greece will remain an issue and given the risk that this could go right to the wire,
this is a clear downside risk for EUR/USD if there’s a sense next week
of no progress being made toward a resolution and the release of
additional funds for Greece," BTMU adds.
US Dollar Fundamentals (based on dailyfx article)
Fundamental Forecast for Dollar: Bearish
The Dow Jones FXCM Dollar Index (ticker = USDollar)
dropped 1.1 percent this past week while the ICE Dollar Index tumbled
1.8 percent. That represents the second worst week for the even-weighted measure (USDollar) in 12 months and the second worst performance for the EURUSD-heavy
gauge in 22 months. Have speculators over-reached on this advantaged
currency? The recent stumble after two months of consolidation alongside
speculative positioning suggests that may be the case. However, as
market participants weigh the impetus for correction against the
tangible fundamental appeal the currency holds over the longer-term;
progress will lean heavily on meaningful catalysts to motivate a
counter-trend move. And, this week’s docket will struggle for the high
profile drivers while the period after is overstocked with redefining
From a fundamental perspective, it is important to
establish the longer-term position for the Greenback. Treasury Secretary
Jack Lew at the G-20 noted the United States’ economic dominance when
he remarked that it was not ‘sufficient’ that the US be the lone driver
of global growth. That bodes well for investor returns (and thereby
capital inflow) alongside the first-mover advantage the Fed seems to be
taking with its relatively hawkish monetary policy standing.
Furthermore, in the event of a global financial slump; the Dollar will
likely revert back to its ‘haven’ status – after a certain intensity is
reached. Medium to
long-term, the currency looks well positioned to advance further. Yet,
that doesn’t preclude it to interim corrections.
A ‘correction’ is what lurks for the Greenback.
Nine-months of steady climb in the most rapid move since the early
1980’s mixes both fundamental reasoning and speculative exuberance. It
is the faction that participated to take advantage of momemtum rather
than hold positions to realize long-term developments that pose the
currency short-term risk. It is difficult to establish exactly how much
excess could be worked off, but positioning measures can act as a proxy.
Commitment of Traders (COT) report this past week showed a continued
reversal from the record net-long exposure set in January.
Now at its lowest level since the end of December, there is still
plenty of room for moderation as we’ve only seen a 13 percent retreat
from the bullish shift that began in 2012.
The most capable driver for the Dollar in its long
and short-term course is monetary policy. This past Friday, a range of
inflation measures bolstered the persistent doubt of near-term FOMC rate
hikes. The headline CPI reading for March slipped back into negative territory
(-0.1 percent), a real average weekly earnings figure retreated from
its series high to a 2.2 percent clip and price forecasts from the
University of Michigan confidence survey posted sharp declines. Caveats
of robust core measures and the general trend of the wage numbers factor
in, but viability of a near-term hike is certainly diminished. According to Fed Fund futures, the first hike is once again not fully priced in until January 2016.
Moderated rate expectations reinforced by tepid
data, but it’s capability as a fundamental driver is diminished
considering the time frame yields imply and the persistent buoyancy of
the Dollar – a rate hike may come later but it is still a hike among QE
programs. Sentiment may simply tip out of favor for the Greenback and
pull it lower, but the most effective means would by through key event
risk to focus the selling effort. For the coming week’s docket, there is
limited high-profile event risk to hit all traders’ radars. And,
marking a meaningful distraction, there are very high profile events in the following week (FOMC decision and GDP amongst others).