Press review - page 379

[Sergey Golubev]

Technical Targets for GBP/USD by United Overseas Bank (based on the article)

GBP/USD: secondary rally to be started by 1.43 resistance level to be broken

Daily price is located below 100-day SMA and 200-day SMA for the primary bearish market condition with the secondary ranging: the price is ranging within 1.4316 resistance and 1.3835 support levels.

• "As indicated yesterday, as long as 1.4050 is intact, another attempt higher to test the major 1.4400 resistance cannot be ruled out just yet. GBP dipped to a low of 1.4120 yesterday and the up-move from the low appears to be on track for a move to 1.4400."
• "Only a move back below 1.4050 would indicate that the prevalent upward pressure has eased. Overall, the current movement is reminiscent of the price action in early February where the corrective rebound extended to 1.4672 before topping out."

RSI indicator is estimating the secondary rally to be started.  

• If the price will break 1.4316 resistance level on close D1 bar so the secondary rally will be started.
  
• If price will break 1.3835 support on close daily bar so the bearish trend will be continuing.
  
• If not so the price will be ranging within the levels.
  

Resistance	Support
1.4316	1.3835
1.4667	N/A

• Recommendation to go short: watch the price to break 1.3835 support level for possible sell trade
• Recommendation to go long: watch the price to break 1.4316 resistance level for possible buy trade
• Trading Summary: bearish

[Sergey Golubev]

USD/CAD Forex Trading Strategies March 2016 - Canada's unemployment rate at 2 year high (based on the article)

"While many indicators are on the positive side, Canada's jobless rate is struggling and has yet to reach the 2008 lows of 5.8. If the numbers come out better than the expected 7.2% this Friday at at 1:30 PM GMT, it could contribute to further strength for the loonie, and a stronger bearish scenario for USD/CAD forex strategies March 2016."

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Market Condition Evaluation based on standard indicators in Metatrader 5

Sergey Golubev, 2016.03.11 13:45

USD/CAD Intra-Day Technical Analysis - bear market rally near reversal area

M15 price is located below SMA with period 100 (100-SMA) and SMA with the period 200 (200-SMA) for the primary bearish market condition: price is testing 1.3260 resistance level to above for the secon dary rally to be started.

• If the price will break 1.3311 resistance level on close M15 bar so the reversal of the price movement from the primary bearish to the primary bullish market condition will be started.
  
• If price will break 1.3227 support on close M15 bar so the bearish trend will be continuing.
  
• If not so the price will be ranging within the levels.
  

Resistance	Support
1.3311	1.3227
N/A	N/A

• Recommendation to go short: watch the price to break 1.3227 support level for possible sell trade
• Recommendation to go long: watch the price to break 1.3311 resistance level for possible buy trade
• Trading Summary: rally
  

SUMMARY : bear market rally

TREND : bearish on reversal

[Sergey Golubev]

USD/CAD Intra-Day Fundamentals: Canada Employment Change and 37 pips range price movement

2016-03-11 13:30 GMT | [CAD - Employment Change]

• past data is -5.7K
• forecast data is 10.0K
• actual data is -2.3K according to the latest press release

if actual > forecast (or previous one) = good for currency (for CAD in our case)

[CAD - Employment Change] = Change in the number of employed people during the previous month.

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"Employment was virtually unchanged in February (-2,300 or 0.0%) as gains in part-time work were offset by losses in full time. The unemployment rate rose by 0.1 percentage points for the third consecutive month, reaching 7.3% for the first time since March 2013."

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USDCAD M5: 37 pips range price movement by CAD Employment Change news event :

[Sergey Golubev]

3 Main Themes To Watch In Next Week FOMC - Bank of America Merrill Lynch (the article)

Three main themes at the March FOMC meeting.

• "First, there is a likely to still be a sense of caution hanging over the meeting, helping to justify why the Fed did not hike. The sharp tightening of financial conditions has started to ease and market nervousness over the global growth backdrop has abated, but we expect the FOMC statement will continue to state that the Committee is still closely monitoring global developments and will not reintroduce a balance of risks assessment. Similarly, uncertainty about the near-term inflation outlook – notably a drop in oil prices and inflation expectations, but a strong set of inflation data prints for February – also is likely to keep the Fed cautiously on hold for now."
• "Second, we look for some signs of optimism in the discussion of the outlook going forward, supporting additional hikes later this year. We expect the updated dot plot will show a median three hikes for this year (with a number at two hikes) and four for 2017. In this sense, not hiking in March is similar to last September’s “tactical delay” of liftoff. The opening paragraph of the statement and Yellen’s subsequent comments should note that the US data recently have shown improvement on net. April should remain a “live” meeting – likely noted by Yellen in her press conference."
• "Third, we do not expect significant changes to the Summary of Economic Projections (SEP), in line with a “tactical delay.” There may be some tweaking of the near-term forecasts: we see some chance of slightly lower 2016 GDP growth; a smaller chance of a slight upward revision to 2016 inflation rates. However, we see a high likelihood that the median long-run dot will decline to 3.25% and a good chance that the central tendency for the longer-run GDP growth rate will come down modestly, reflecting disappointing productivity growth over the past few years. We also see some chance that the longer-run unemployment rate projection could move slightly lower."

[Sergey Golubev]

Forex Weekly Outlook March 14-18 (the article)

The ECB’s massive policy announcement did not receive the desired fall in the euro, and the US dollar lost ground in an exciting week. Rate decisions in Japan the US, the UK and Switzerland, Employment data from the UK, the US and Australia, US inflation, manufacturing and sentiment figures.

1. Japan rate decision: Tuesday. The Bank of Japan surprised financial markets by adopting negative interest rates for the first time ever in an attempt to boost growth. BOJ decided to implement a negative rate of 0.1% and charge banks for depositing their excess funds. Analysts did not anticipate this move. The bank also maintained its program to buy government bonds. The BOJ noted that the economy recovered modestly and that there is an increase in inflationary pressures. There is a lot of uncertainty about this decision. On one hand, Kuroda has more leeway to act after Draghi’s move. On the other hand, the effectiveness of such moves is limited.
2. US Retail sales: Tuesday, 12:30. U.S. consumer spending increased more than forecast at the beginning of the year, rising 0.2% after a revised 0.2% increase in December. Sales were up 3.4% compared to January 2015. Furthermore, core retail sales, excluding the auto sales rose 0.1%, compared to a flat reading expected by economists. Sales continue to benefit from falling gasoline prices. The positive sales figures dampened recession fears but are not strong enough for another Fed rate hike decision. Retail sales are expected to decline 0.1% while core sales are forecasted to drop 0.2%.
3. US PPI: Tuesday, 12:30. U.S. producer prices edged up unexpectedly in January despite lower energy prices. Producer price index increased by 0.1% after a 0.2% fall in the previous month. Analysts expected the index to decline 0.2%. The final demand services index increased 0.5%. Margins for machinery and equipment jumped 4%. However despite the rise in the cost of services, declining oil prices and a stronger dollar continued to weigh on wholesale prices. Economists expect producer prices to decline 0.1% this time.
4. UK Employment data: Wednesday, 9:30. The number of people claiming unemployment benefits plunged by 14,800 in January to the lowest level since 1975. The reading surprised analysts predicting a smaller decline of  2,900. However, despite this decline, the unemployment rate disappointed for the first time remaining at 5.1%, while analysts expected a decline to 5.0%. The number of UK jobless claims is estimated to decline by 9,000 in February.
5. US Building Permits: Wednesday, 12:30. The number of building permits dropped 0.2% to a 1.202 million-unit rate in January. Permits for the construction of single-family homes fell 1.6% and multi-family building permits increased 2.1%. Likewise, housing starts fell amid bad weather, disrupting building projects in some parts of the country. Single-family housing starts, the largest segment of the market, fell 3.9%. The number of building permits is expected to remain around 1.2 million.
6. US Inflation data: Wednesday, 12:30. Consumer Price Index, excluding the volatile food and energy components edged up by the most in nearly 4-1/2 years in January, amid rising rents and healthcare costs. The reading beat analysts forecast of a 0.2% rise and following a 0.1% increase in the prior month. Meanwhile the overall CPI remained unchanged after falling 0.1% in December. The rise in core CPI together with the constant improvement in the employment market suggest further rate hikes in the coming months. Consumer Price are forecasted to fall 0.2% while core process are expected to rise 0.1%.
7. US Rate decision: Wednesday, 18:00. The U.S. Federal Reserve maintained rates on January, noting it was “closely monitoring” global economic and financial developments, before deciding on further rate hikes this year. The decision was in line with market forecast. Fed officials said the economy was growing moderately with a stronger employment market. The concerns lay on global economic and financial developments and their effect on US labor market and inflation. Economists expect a one quarter-point rate increase in 2016, probably on July. No change is expected now, but the updated forecasts and press conference promise a lot of action. Will they lower their interest rate projections?
8. New Zealand GDP: Wednesday, 21:45. New Zealand’s economy expanded more than forecast in the third quarter, growing 0.9% from 0.4% in the second quarter. The third-quarter growth rate exceeded the 0.8% forecast. The Reserve Bank of New Zealand expects faster economic growth and higher inflation this year. The boost in growth is attributed to a surge in spending by tourists and retail trade. New Zealand’s growth is expected to reach 0.7% in the fourth quarter of 2015.
9. Australian Employment data: Thursday, 0:30. Australian employment market shed 7,900 jobs in January, while expected to gain 13,000. Full-time employment declined by 40,600, while part-time jobs increased by 32,700. Australia’s unemployment rate jumped to 6% from 5.8% accordingly, the highest level recorded since September 2015. The participation rate remained steady at 65.2%. However, the outlook for the job market remains positive. Economists believe Australia is unlikely to face a recession in 2016 but weak national income poses risks to the economy. Australian job market is expected to add 12,300 positions in February while the unemployment rate is estimated to remain at 6%.
10. Switzerland: Rate decision: Thursday 8:30. Switzerland’s central bank kept its record-low interest rates unchanged after the ECB did the same, giving the Swiss franc some breathing space in its battle with the euro. The central bank decided to maintain its target range for three-month Libor between -1.25 and -0.25% in line with market forecast. Switzerland’s economic activity weakened in the third quarter due to the franc’s fall. The SNB predicts growth would reach 1.5% in 2016 with inflation at -1.1% . Price growth is expected to recuperate in 2017.
11. UK rate decision and meeting minutes: Thursday, 12:00. The Bank pf England cut its forecast for growth, wages and inflation, but kept rates unchanged. Mark Carney raised market speculation that a global economic slowdown could prompt a rate cut. But the policymakers voted unanimously to hold borrowing costs unchanged. Carney said he wants to prepare households and businesses for the scenario that borrowing costs are expected to rise over the next two years. However, according to the Bank’s latest outlook it seems that policymakers are in no hurry to raise rates anytime soon. The meeting minutes showed a unanimous decision against raising rates. Another unanimous vote is likely.
12. US Philly Fed Manufacturing Index: Thursday, 12:30. The manufacturing activity index in the Philadelphia area remained weak in February but improved to minus 2.8 from minus 3.5 in January. The index remained in negative territory for six continuous months however the reading was better than the minus 2.9 forecasted by analysts. Exports remained positive but new orders and employment indexes remained negative dropping modestly. Philly Manufacturing Index is expected to improve further to -1.1 this time.
13. US Unemployment Claims: Thursday, 12:30.  Initial claims for U.S. unemployment benefits plunged by 18,000 last week reaching 259,000. The reading was much better than expected posting the lowest level since mid-October. Economists forecasted 272,000 new claims last week. The four-week moving average fell by 2,500 to 267,500, the lowest figure since October 31 week. The number of new claims is expected to reach 267,000 this time.
14.  US UoM Consumer Sentiment: Friday, 15:00. Consumer sentiment deteriorated in February reaching 90.7 compared to 93.3 posted in the prior month. Analysts expected a reading of 92.7. Oddly enough, the lukewarm sentiment reading followed positive retail sales figures in January spurred by a stronger labor market and higher income gains due to the ultra-low inflation. US Consumer sentiment In March is predicted to reach 92.3.

[Sergey Golubev]

Fundamental Weekly Forecasts for US Dollar, GBP/USD, USDJPY, and GOLD (based on the article)

US Dollar - "The Dollar has dropped ahead of the important meeting deflating some of the hawkish premium, but there is still considerable bullish interest behind the currency considering it a mild pace would still be a severe contrast to its counterparts. Furthermore, we have seen a shift in how the market responds to further drive to the dovish extreme of the policy spectrum. The BoJ adopted negative rates and saw the markets flip against the traditional ‘dovish move equates to bullish capital market, bearish currency’ equation within 24 hours. The ECB’s stimulus bomb this past week broke the function instantly. The market response will likely be a settling of confused speculative interpretations."

GBP/USD - "For the British Pound the big-picture trend remains fairly clear—the GBP/USD exchange rate has fallen in 14 out of the past 19 months. The biggest risk remains a British exit (“Brexit”) from the European Union and the uncertainty it represents. Until there is clarity on that front we do not expect a material GBP recovery."

USD/JPY - "The strong JPY year-to-day is likely to have companies expanding more slowly as their goods have become more expensive by nearly 5% on a global scale to where they were at the end of 2015, and at the same time, demand from Asian countries may continue to drop on tightened lending conditions."

GOLD (XAU/USD) - "Gold looks to be marking a weekly doji after stretching into a fresh yearly high of 1284. Heading into the FOMC next week, the long-side is vulnerable for a pullback but the broader trade remains constructive while above slope support extending off the July low. Key near-term topside resistance objectives stand at the 2015 high-week close at 1239 backed by the 2014 high-week reversal close at 1334. A break sub-1151/55 would be needed to reassert the broader short-trend in bullion."

[Sergey Golubev]

USD/JPY Intra-Day Fundamentals: Japan Machine Orders and 19 pips range price movement

2016-03-13 23:50 GMT | [JPY - Core Machinery Orders]

• past data is 4.2%
• forecast data is 2.0%
• actual data is 15.0% according to the latest press release

if actual > forecast (or previous one) = good for currency (for JPY in our case)

[JPY - Core Machinery Orders] = Change in the total value of new private-sector purchase orders placed with manufacturers for machines, excluding ships and utilities.

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USDJPY M5: 19 pips range price movement by Japan Machine Orders news event :

[Sergey Golubev]

EUR/USD: We maintains a long EUR/USD from 1.1140 targeting a move to 1.1370, with a stop at 1.1058 - Credit Suisse (based on the article)

• "We look for further strength towards gap and 78.6% retracement resistance spanning from 1.1230 to 1.1256/59."
• "Above here can then target the February high at 1.1376 where we would expect fresh selling to show. Immediate support moves towards 1.1136, with the top of the base at 1.1068/58 ideally holding."

[Sergey Golubev]

EUR/USD Intra-Day Fundamentals: Euro-Zone Industrial Production and 14 pips price movement

2016-03-14 10:00 GMT | [EUR - Industrial Production]

• past data is -0.5%
• forecast data is 1.7%
• actual data is 2.1% according to the latest press release

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

[EUR - Industrial Production] = Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

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"In January 2016 compared with December 2015, seasonally adjusted industrial production rose by 2.1% in the euro area (EA19) and by 1.7% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In December 2015 industrial production fell by 0.5% in the euro area and by 0.6 in the EU28."

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EURUSD M5: 14 pips price movement by Euro-Zone Industrial Production news event :

[Sergey Golubev]

Technical Targets for EUR/USD by United Overseas Bank (based on the article)

EUR/USD: bounced from 1.1217 for intra-day correction

H4 price is located above 100 period SMA and 200 period SMA for the primary bullish market condition with the secondary correction: the price was bounced from 1.1217 resistance level to start to be ranging above 200 SMA bullish area.

• "While we turned bullish EUR, the upside potential is likely limited to 1.1245. The current movement is a short-term consolidation and this should lead to an eventual move higher in the next few days."

RSI indicator is estimating the bullish ranging to be continuing.  

• If the price will break 1.1217 resistance level so the primary bullish trend will be continuing.
  
• If price will break 1.1077 support on close H4 bar so the reversal of the price movement from the primary bullish to the primary bearish market condition may be started.
  
• If not so the price will be ranging within the levels.

Resistance	Support
1.1217	1.1077
N/A	N/A

• Recommendation to go short: watch the price to break 1.1077 support level for possible sell trade
• Recommendation to go long: watch the price to break 1.1217 resistance level for possible buy trade
• Trading Summary: bullish