EUR/USD Technical Analysis: Euro Snaps 3-Day Loss Streak (based on dailyfx article)
The Euro paused to digest losses above the 1.08 figure against the US Dollar having turned lower as expected.
Near-term support is at 1.0804, the 61.8% Fibonacci expansion, with a
break below that exposing the 76.4% level at 1.0647. Alternatively, a
reversal above the 50% Fib at 1.0930 clears the way for a test of the
38.2% expansion at 1.1056.
AUD Resuming Downtrend Backed by FX Sentiment & Volume Analysis (adapted from dailyfx article)
The recent spike in AUDUSD happened on muted volume,
which favors prior trend. Combining the lack of volume on the terminal
move in an addition to the following factors of sentiment and chart
patterns. This article will guide you through what to look for on the
chart while adding sentiment and volume analysis to see if the trend is
ready to resume or rather a reversal is underway.
Technical analysis looks for potentially repeatable patterns that can provide an edge, so long as risk is managed. The chart above shows AUDUSD traced out a clean broadening pattern
(diverging red trend lines), which communicates trend interruption more
than trend reversal and often favors a new low is likely in a larger
if actual < forecast (or previous data) = good for currency (for USD in our case)
[USD - Unemployment Claims] = The number of individuals who filed for unemployment insurance for the first time during the past week. Although it's generally viewed as a lagging indicator, the number of
unemployed people is an important signal of overall economic health
because consumer spending is highly correlated with labor-market
conditions. Unemployment is also a major consideration for those
steering the country's monetary policy.
"In the week ending May 23, the advance figure for seasonally adjusted initial claimswas 282,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 274,000 to 275,000. The 4-week moving average was 271,500, an increase of 5,000 from the previous week's revised average. The previous week's average was revised up by 250 from 266,250 to 266,500."
A fresh factor will drive EUR/USD declines - Deutsche Bank (based on forexlive article)
Cleaner positioning. "Equally, positioning metrics suggest
that dollar longs have being pared back. A regression of currency manager index
returns against the DXY now points to flat positioning, while the IMM shows a
greater than 50% paring back in dollar longs," Deutsche Bank notes.
All about the Fed. "History has been all about the ECB, but the
dominant driver of FX is now likely to be the Fed. On that front, monetary
policy could come back in focus sooner than many expect," Deutsche Bank argues.
Euro still a good short. "While market focus is very likely
to shift to the other side of the Atlantic, EUR/USD is still a good vehicle to
express dollar longs. To start with, the euro is a consistent underperformer
around Fed turning points," DB advises.
Negative euro flows. "Beyond that, the European flow picture
remains very negative. The recent VaR shock in bund yields is likely to further
discourage, rather than encourage fixed income inflows," Deutsche Bank adds.
Appraising AUDUSD, USDJPY Breakouts with Fundamentals (based on dailyfx article)
Is USDJPY's massive breakout destined to extend its run or will it suffer the same fate as AUDUSD which saw its 0.79 breakout stall almost immediately? While many concern themselves only with the 'break' part of breakout scenarios, it is the follow through that determines whether there is a significant trading opportunity at hand. For AUDUSD, the 0.7900 break was a remarkable technical break from a period of extended consolidation; but its effort to generate traction contradicted the impact of an RBA rate cut. Further, monetary policy divergence between the Aussie and US Dollars provided a serious headwind to follow through. What does the fundamental backdrop look like for USDJPY moving forward? We discuss that in today's Strategy Video.
if actual > forecast (or previous data) = good for currency (for NZD in our case)
[NZD - NBNZ Business Confidence] = Level of a diffusion index based on surveyed manufacturers, builders, retailers, agricultural firms, and service providers. It's a leading indicator of economic health - businesses react quickly
to market conditions, and changes in their sentiment can be an early
signal of future economic activity such as spending, hiring, and
Trading News Events: U.S. Gross Domestic Product (GDP) (based on dailyfx article)
A marked downward revision in the preliminary 1Q U.S. Gross Domestic
Product (GDP) report may drag on the greenback and spur a near-term
rebound in EUR/USD as the Federal Reserve looks to carry its
zero-interest rate policy into the second-half of 2015.
Why Is This Event Important:
Even though the Fed pledges to look past the economic weakness drive by
transitory factors, a larger-than-expected contraction in the growth
rate may spur a further delay in the central bank’s normalization cycle
as it undermines expectations for a stronger recovery.
Nevertheless, increased business outputs paired with the expansion in
private-sector credit may offer a better-than-expected GDP print, and
prospects for a stronger recovery may spur a bullish reaction in the
dollar as the Fed remains on course to remove the zero-interest rate
policy (ZIRP) in 2015.
How To Trade This Event Risk
Bearish USD Trade: Growth Rate Contracts 0.9% or Greater
4Q 2014 U.S. Gross Domestic Product (GDP)
EURUSD M5: 19 pips price movement by USD - GDP news event:
Even though the preliminary 4Q U.S. GDP print was revised down to an
annualized 2.2% from an initial forecast of 2.6%, the print still
managed to exceed market expectations for a 2.0% rate of growth. At the
same time, Personal Consumption was also revised down to 4.2% from 4.3%,
while the core Personal Consumption Expenditure (PCE) remained
unchanged at 1.1% during the same period. The better-than-expected GDP
reading may keep the Fed on course to normalize monetary policy in 2015
as the central bank anticipates a stronger recovery in the year ahead.
The greenback strengthened following the report, with EUR/USD slipping
below the 1.1200 handle to end the North American session at 1.1189.
MetaTrader Trading Platform Screenshots
EURUSD, M5, 2015.05.29
MetaQuotes Software Corp., MetaTrader 5
EURUSD M5: 42 pips rangeprice movement by USD - GDP news event
GBPUSD, M5, 2015.05.29
GBPUSD M5: 59 pips range price movement by USD - GDP news event
USDCAD, M5, 2015.05.29
USDCAD M5: 83 pips price movement by USD - GDP news event
AUDUSD, M5, 2015.05.29
AUDUSD M5: 20 pips rangeprice movement by USD - GDP news event
Forex Weekly Outlook June 1-5 (based on forexcrunch article)
ISM Manufacturing PMI, Rate decisions in Australia, the UK
and the Eurozone, GDP data from Australia, Employment data from Canada
as well as important labor figures from the US including the
all-important NFP release. These are the highlights event on forex
calendar. Join us as we explore the market-movers of this week.
U.S. second GDP estimate was released, indicating the economy
contracted 0.7% in the first quarter, amid harsh winter storms, strong
dollar weighing on exports and labor disputes at West Coast ports. While
the first estimate a month ago, showed 0.2% growth. Economists say the
first quarter GDP reading is not accurate and expect a pick-up in the
next quarter. Also upbeat data in Durable goods orders and Consumer
sentiment fuels optimism about US economic growth.
AUDIO - Income Generation with Darek Zelek (based on fxstreet article)
Traditional investment advisors point investors to the bond market to
generate income, yet that is a dangerous undertaking in these markets.
Master trader, Darek Zelek joins Merlin for a look at how he uses
options to grow his portfolios and generate the desired rate of return
he is looking for. The duo look at several examples of options trades on
assets like Oil and Gold.
US Dollar Fundamentals (based on dailyfx article)
Fundamental Forecast for Dollar: Neutral
"Interest rate forecasting
has proven the most tangible motivator for fundamental traders these
past months, but it is not the only game in town for price and
volatility. Risk trends should not be underestimated for its heavy
influence over the market. Volatility measures in different capital markets look dangerous, but not as dangerous as equity indexes like the S&P 500 and Shanghai Composite.
Meanwhile, the ‘relative’ factor to exchange rates should have us also
looking at Greece, the RBA rate decision and other event risk that can
buoy or crush the Dollar’s most liquid counterparts."