Fading Global Growth View Doesn’t Faze Equities, Yen Crosses or EURUSD (based on dailyfx article)
"Investors should be wary and opportunistic speculators on alert. We
revisit the risk-reward evaluation of the global capital markets and
sentiment in today's Strategy Video."
if actual > forecast (or previous data) = good for currency (for USD 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
"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index declined 0.2 percent before seasonal adjustment.The index for all items less food and energy rose 0.3 percent in April and led to the slight increase in the seasonally adjusted all items index. The index for shelter rose, as did the indexes for medical care, household furnishings and operations, used cars and trucks, and new vehicles. In contrast, the indexes for apparel and airline fares declined in April."
AUDIO Pulling Back the Curtain with Gina Monetti
It took 5 years to happen, but we finally get Gina Monetti on the
show! Gina is instrumental in student support, XLT, Mastermind,
Clubhouse, ProPicks and much more at Online Trading Academy! Gina talks
about her role and how it all revolves around student success. Later,
Gina talks about her trading style and where she sees the market headed.
Holiday Conditions and Record Equities Remind of Bigger Liquidity Risks (based on dailyfx article)
If capital markets correct under risk aversion - inevitable over a long enough period - will the retreat be orderly or chaotic? There is usually at least a little panic in a bearish phase after a long build up, but conditions behind the current six-year bull trend suggest there may be more acute trouble when speculative appetites cool. Liquidity risks may have been fostered by the aggressive risk-taking and incredible policy intervention through these past years. We've seen how important liquidity is in the post-Lehman collapse and SNB's withdrawal of its exchange rate floor. But, what happens when the traditional outlets for safety are distorted? We consider the risks - and perhaps some opportunities - of liquidity issues in the unavoidable, next market bear wave in this weekend Strategy Video.
Forex Weekly Outlook May 25-29 (based on forexcrunch article)
The US dollar made a comeback and the greenback was a big loser in a
week that saw trends change. And now, US Durable Goods Orders, Consumer
Confidence as well as UK, Canadian and US GDP data stand out. These are
the highlight events in Forex calendar. Here is an outlook on the main
market-movers for this week.
The Federal Reserve released minutes from its April 28-29 policy
meeting, revealing the planned rate hike will not take place in June.
Despite growing confidence in the US economic recovery, the recent data
suggest a temporary slowdown. Weaker consumer spending, slow growth and
employment data led policy makers to postpone their decision on raising
rates. Fed officials were also disappointed that falling oil prices did
not spur growth as anticipated and that the recent dollar softness muted
inflation. The Fed has reiterated it will not raise rates until it is
“reasonably confident” that prices are moving toward its 2% target. Will
the US economy rebound from its recent soft patch? In the euro-zone,
talk about front-loading QE hit the euro in particular. The common
currency reversed its previous gains. In the UK, inflation dipped below
0% and in Japan GDP came out better than expected.
Gold forecast for the week of May 25, 2015, Technical Analysis (based on fxempire article)
Gold markets fell during the course of the week, testing the $1200 level
again. Because of this, we feel that the markets probably going to
grind around in this area, and we are not ready to make any longer-term
trades as a result. We believe that short-term traders will continue to
pushes market around, and as a result it is probably best left to those
who play short-term charts. Ultimately though, we do think the gold will
offer value, so picking up some physical metal might not be a bad move.
USD/JPY forecast for the week of May 25, 2015, Technical Analysis
(based on fxempire article)
The USD/JPY pair broke higher during the course of the week, as we
closed out the 121.50 area. That being the case, it now looks as if we
are ready to break out above the potential ascending triangle that it
appears on the weekly chart. That of course would be a very bullish
sign, as the height of the triangle measures roughly 650 pips. Because
of this, we believe that the USD/JPY pair will be very bullish soon, and
a break above the 122 level is enough to get us to start buying again.
We believe at that point in time that the market should head to roughly
128 given enough time.
Needless to say, the market should have a bit of resistance at the 125
level though, and we don’t necessarily think that it will be the easiest
move. However, by the end of the week we started to see US dollar
strength just about everywhere, and as a result it seems as if the
market is suddenly in favor the US dollar overall again. The US Dollar
Index broke above the 96 handle, which of course is very bullish, and
the EUR/USD pair suddenly testing the 1.10 level, an area that is indeed
important. Ultimately, we have to wait to see what happens on a daily
close, but it certainly looks as if the USD/JPY is ready to continue the
Even if we fell from here, we believe that there is enough support below
to keep this market going higher, and as a result we look at pullbacks
as potential buying opportunities. We think that the absolute “floor” in
this market is somewhere near the 115 handle, and with that we have no
intentions of selling this pair anytime soon. In fact, we believe that a
lot of traders are starting to think longer-term “buy-and-hold” type of
thoughts when it comes to this currency pair. Ultimately, the market
should continue to find itself well supported, especially considering
that the Bank of Japan is so dovish at the moment.
USD/CHF forecast for the week of May 25, 2015, Technical Analysis (based on fxempire article)
The USD/CHF pair broke higher during the course of the week, bouncing
off of the 0.92 level. However, we have the vital 0.95 level just above,
and we believe that will be somewhat resistive. With that being the
case, we believe that longer-term traders can have to wait until we get a
nice close on the daily chart above the 0.95 level in order to start
going long. As far selling is concerned, we have no interest whatsoever
in going so at the moment, especially considering that the US dollar is
so strong all of a sudden.
USD/CAD forecast for the week of May 25, 2015, Technical Analysis (based on fxempire article)
The USD/CAD pair broke higher during the course of the week, clearing
the top of the three hammers that we have recently formed. We crashed
into the 1.23 level, which we see as the beginning of a significant
barrier to the upside, and as a result we need to get back above the
range for the week in order to consider buying. If we do, we feel that
the market will probably head back towards the 1.28 level. It will be
interesting see how this plays out though, because the oil markets don’t
look like they agree.
NZD/USD forecast for the week of May 25, 2015, Technical Analysis (based on fxempire article)
The New Zealand dollar fell during the course of the week, testing the
0.73 level. We believe that there is a significant amount of support
below though, so quite frankly we are not comfortable selling at this
point. We certainly can’t buy this market though, because it is far too
bearish. With that being the case, we are simply sitting on the
sidelines as far as longer-term trades are concerned. However,
shorter-term selling opportunities should continue to be the case going
forward, so we suggest shorter time frames.