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Press review - page 308

Sergey Golubev
Moderator
103843
Sergey Golubev  

EUR/JPY, EUR/USD Triangles Continue to Develop Downside Potential (based on dailyfx article)

  • EURJPY, EURUSD triangles begin to favor more downside.
  • EURGBP double top remains valid towards 0.7063.

Short-term technical indicators are close to turning outright negative for various EUR-crosses. For EURJPY and EURUSD, this potentially means continuation outside of their recent triangls after breaking the uptrends from last week's lows (although in EURUSD, a longer-term triangle may be in the works). For EURGBP, we've seen the key topside resistance level respected throughout the consolidation, keeping the double top intact.


Sergey Golubev
Moderator
103843
Sergey Golubev  

ECB Mulls Tightening Noose Around Greek Banks (based on rttnews article)

The European Central Bank is exploring measures to reduce the Emergency Liquidity Assistance to Greek banks, reports said Tuesday, citing people with knowledge of the discussions. ECB Staff have suggested an increase in the haircuts banks take on the collateral they offer for emergency funding from the Bank of Greece, both Bloomberg and CNBC said.

Sergey Golubev
Moderator
103843
Sergey Golubev  

As DXY Consolidates, GBP/USD, EUR/USD Start To Rally - BofA Merrill (based on efxnews article)

While Bank of America Merrill Lynch didn't expect the USD Index DXY to remain within its recent corrective range trade (currently consolidating between 99.92 & 96.58), BofA now thinks that this longer than anticipated consolidation has done no damage to the larger bull trend.

"Absent a sustained break off 96.58/95.94 we look for a bullish resolution towards 103.85 (Triangle objective) ahead of 106.00 (long term upside target)," BofA argues.

It is a slightly different story for GBP/USD, according to BofA, as the setup here is for a more directional correction higher.

"In the sessions ahead we look for a push to 7m channel resistance at 1.5232 ahead of swing targets at 1.5350 and potentially beyond before the long term downtrend resumes for a push towards 1.35/1.40 (secular range lows), BofA projects.


Turning to EUR/USD, BofA advises bulls to watch the 55d average around 1.0992.

"While we remain long term EUR/USD bears, targeting 1.0283/1.000, in the near term the pair is stuck in a choppy corrective range between 1.0462 (Mar-16 low) and the 55d avg (now 1.0992)," BofA notes.

"Bulls need a sustained break of the 55d to point to a greater correction than anticipated, exposing the 1.1261/1.1534 February congestion zone," BofA advises

Sergey Golubev
Moderator
103843
Sergey Golubev  
2015-04-22 02:30 GMT (or 04:30 MQ MT5 time) | [AUD - CPI]

if actual > forecast (or previous data) = good for currency (for AUD in our case)

[AUD - 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 containment mandate.

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"THE ALL GROUPS CPI

  • rose 0.2% in the March quarter 2015, compared with a rise of 0.2% in the December quarter 2014.
  • rose 1.3% through the year to the March quarter 2015, compared with a rise of 1.7% through the year to the December quarter 2014.
OVERVIEW OF CPI MOVEMENTS
  • The most significant price rises this quarter were for domestic holiday travel and accommodation (+3.5%), tertiary education (+5.7%) and medical and hospital services (+2.2%).
  • The most significant offsetting price falls this quarter were for automotive fuel (-12.2%) and fruit (-8.0%)."
Sergey Golubev
Moderator
103843
Sergey Golubev  

AUDIO - The BECC Report with Scott McCormick

Markets surged on good earnings and easing by China. Will the momentum continue? Scott McCormick joins Merlin for a look at what Bonds, Equities, Commodities & Currencies have to say about our markets. The duo looks at earnings season and answer some questions about how to trade earnings and news related events.


Sergey Golubev
Moderator
103843
Sergey Golubev  

EURUSD Technical Analysis: Digesting Gains Above 1.07 (based on dailyfx article)

The Euro is digesting gains against the US Dollar after rising as expected after showing a bullish Morning Star candlestick pattern. Near-term resistance is at 1.1040, the March 18 high, with a break above that on a daily closing basis exposing the 38.2% Fibonacci retracement at 1.1266. Alternatively, a move back below the March 31 low at 1.0712 clears the way for a test of the 1.0461-1.0554 area (March 13 low, 23.6% Fibonacci expansion).


We see the Euro trend as broadly bearish, in line with our long-term outlook. As such, we will approach on-coming gains as corrective in the context of a larger structural decline and position for opportunities to enter short after the move higher is exhausted. In the meantime, we remain flat.

Sergey Golubev
Moderator
103843
Sergey Golubev  

EUR/GBP: Breaks Down; EUR/USD: Excellent Selling Pattern - BofA Merrill (based on efxnews article)

EUR/GBP is resuming its larger downtrend, following the break of 0.7174/0.7166, notes Bank of America Merrill Lynch.

"We look for a test and break of the Mar-11 low at 0.7014, ahead of the 0.6900/0.6800 region. Bounces should not exceed the Apr-19 high at 0.7245," BofA projects.


Turning to EUR/USD, BofA notes that while the 1.0500-1.1000 range is still intact, its correction is turning increasingly in a 'Triangular' pattern.

A Triangular Correction, according to BofA, is a range defined by two contracting trendlines.

"This is one of our favorite patterns and should provide an excellent opportunity to go short for a move toward 1.0000 once the pattern completes," BofA argues.

"For now, stay patient. Gains should not exceed the 55d at 1.0967, while a break of 1.1053 points to a larger correction than anticipated," BofA advises.


Sergey Golubev
Moderator
103843
Sergey Golubev  
2015-04-23 09:00 GMT (or 11:00 MQ MT5 time) | [EUR - Manufacturing PMI]

if actual > forecast (or previous data) = good for currency (for EUR in our case)

[EUR - Manufacturing PMI]  = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.

==========

Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:

“The weaker rate of expansion is a big disappointment, given widespread expectations that the ECB’s quantitative easing will have boosted the fledgling recovery seen at the start of the year. However, it’s too early to draw firm conclusions about whether growth is faltering again and the effectiveness of policy. Although the PMI has pulled back from March’s recent high, the index remains above the average seen in the first quarter and is indicative of the eurozone  economy growing at a reasonably robust quarterly rate of 0.4% at the start of the second quarter. "

Sergey Golubev
Moderator
103843
Sergey Golubev  

EURUSD Mid-Day Outlook (based on actionforex article)

Daily Pivots:

  • (S1) 1.0687
  • (P) 1.0744
  • (R1) 1.0779

No change in EUR/USD's outlook in spite of the mild recovery today. Consolidation pattern from 1.0461 is still in progress and stronger rise cannot be ruled out. But near term outlook stays bearish as long as 1.1096 support turned resistance holds and downside breakout is expected. Below 1.0461 will extend larger down trend to next fibonacci level at 1.0283.

In the bigger picture, overall price actions from 1.6039 long term top is viewed as a corrective pattern. Fall from 1.3993 is the third leg of such pattern and should target 100% projection of 1.6039 to 1.2329 from 1.3993 at 1.0283 next. On the upside, break of 1.2042 support turned resistance is needed to indicate medium term reversal. Otherwise, outlook will stay bearish.

Sergey Golubev
Moderator
103843
Sergey Golubev  

EUR/USD, USD/JPY - Goldman Sachs (based on fxnews article)

Goldman Sachs updates its outlook on EUR/USD and USD/JPY noticing that the latest messages form the ECB and BoJ seem to be 'lost in translation'. The following are the key points in GS' note along with its latest forecasts for EUR/USD and USD/JPY.

1- "When central banks are implementing QE – as the ECB and Bank of Japan clearly are – they deliver two basic messages. First, they comment on whether the current pace of asset purchases is still appropriate and, when it isn’t, they provide more accommodation, as the BoJ did in October. Second, because QE is controversial, they sing the praises of asset purchases, pointing to rising inflation expectations and an improving growth picture," GS argues.

2- "We think this is what happened towards the end of the ECB press conference on Apr. 15, when President Draghi made favorable comments on the inflation and growth picture. The market heard exit, but in our view this is a clear case of “lost in translation." GS adds.

3- "After all, President Draghi earlier in the press conference argued forcefully that focus on early exit is premature and that having this debate now is like “quitting a marathon after 1k.” Our European economists continue to expect “full implementation” of ECB QE, meaning an unchanged pace of asset purchases through at least Sep. 2016. This is key to our view that a cyclical recovery in the Euro zone is not a force for EUR/USD higher," GS clarifies.


4- "There was more “lost in translation” in Governor Kuroda’s speech on Apr. 19. The market picked up headlines that “the underlying trend of inflation has improved markedly,” but the more important message in the speech, in our opinion, is that low inflation momentum is threatening to pull inflation expectations lower (Exhibit 4), which will then set the stage for additional monetary easing," GS notes.

5 "Our Japan Chief Economist forecasts additional stimulus for July by way of duration extension of JGB purchases (akin to "Operation Twist" in the US). Given how small speculative long $/JPY positioning now is, we think there is room for the market to catch up with real story in Japan, which is that another round of monetary easing is coming," GS adds. 

GS targets EUR/USD at 1.00 in 6-months and USD/JPY at 125 over the same end of period.