Press review - page 389

Sergey Golubev
Moderator
113476
Sergey Golubev  

EUR/USD Forecasts by Danske Bank (adapted from the source)


"EUR/USD has bought into fading ECB-Fed policy divergence after the ECB largely gave up the fight for euro depreciation and following recent dovish Fed comments. With positioning now much lighter in terms of short EUR/USD bets, we are probably entering a period in which relative rates could increasingly play a role again, and with a mere 50/50 pricing of a September Fed hike, and the ECB once again challenged on its mandate by market inflation expectations, we see relative rates moving for a weaker EUR/USD in 1-3M. Notably a negative Brexit risk premium could also be factored in ahead of the UK referendum but should be priced out swiftly in our main scenario of no Brexit."

"We keep our forecast profile unchanged, which leaves some downside near term (1-3M forecast at 1.12) followed by a sustained move higher towards 1.18 in 12M as valuation continues to drive the cross higher."

EUR/USD: Flows, Valuation, Outlook, Forecast - Danske
EUR/USD: Flows, Valuation, Outlook, Forecast - Danske
  • www.efxnews.com
Flows. Speculators have continued to unwind long USD bets and are less short EUR now; this increases the sensitivity of the cross to any impetus from relative rates. Valuation. Both our PPP and MEVA model suggest the mid 1.20s are ‘fundamentally’ justified and thus that the cross remains undervalued.  Relative rates have recently moved in...
Sergey Golubev
Moderator
113476
Sergey Golubev  

Forex Weekly Outlook April 18-22 (based on the article)

German ZEW Economic Sentiment, US Building Permits, Glenn Stevens’s speech, UK employment data, US Crude Oil Inventories, Eurozone rate decision, US Philly Fed Manufacturing Index and Unemployment claims. These are the highlights of this week.

  1. Eurozone German ZEW Economic Sentiment: Tuesday, 10:00. German business climate increased in March despite global slowdown, amid stronger consumer sentiment. Analysts expect German economic growth would not exceed last year’s 1.7% expansion rate.
  2. US Building Permits: Thursday, 13:30. US building permits came a bit lower than the 1.20 million expected, reaching 1.17 million. The number of permits is expected to remain at 1.2 million.
  3. Glenn Stevens speaks: Tuesday, 14:30. RBA Governor Glenn Stevens will speak at the Global Macro Conference in New York. He may talk about RBA’s recent decision to keep interest rates steady unlike the “aggressive monetary policy” conducted by central banks in the US, Europe, Japan and China which affects the value of their currencies.
  4. UK Employment data: Wednesday, 9:30. UK employment market continued to improve in February as the number of people on the claimant count fell by 18,000 to 716,700. Unemployment fell to 1.68 million between November and January, declining 28,000 from the previous quarter. The number of people on jobless claims is expected to decline by 11,900 in March.
  5. US Crude Oil Inventories: Wednesday, 15:30. U.S. crude stocks soared last week to 6.6 million barrels, almost tripling expectations. Analysts expect crude oil will continue to rally during the summer.
  6. Eurozone rate decision: Thursday, 12:45. The European Central Bank continued to fight the risk of deflation in its March meeting deciding on various stimulus measures such as reducing its benchmark rate to zero, cutting the rate on cash parked overnight by banks to minus 0.4% and increasing bond purchases to 80 billion euros ($87 billion) a month from 60 billion euros.The ECB announced a fresh round of targeted refinancing operations in June.
  7. US Philly Fed Manufacturing Index: Thursday, 13:30. The manufacturing survey in the Philadelphia area climbed sharply in March, exiting a 7-month long negative territory to a reading of 12.4.
  8. US Unemployment Claims: Thursday, 13:30. The number of new claims for unemployment benefits fell more than expected reaching levels seen last in 1973 showing continued strength in the US labor market. The number of claims declined by 13,000, reaching 253,000. Economists expected claims to register 270,000.
Sergey Golubev
Moderator
113476
Sergey Golubev  

Fundamental Weekly Forecasts for Dollar Index, GBPUSD, USDJPY, USD/CNH and GOLD (based on the article)

Dollar Index - "The final theme to consider is risk trends. We’ve not seen the Dollar truly rediscover its ultimate haven status is some time, and recovering it would require extreme risk aversion – possible but not something to hold our breath for. In contrast, there is a tangible ‘risk’ aspect to oil prices taking place. Low oil prices, usually considered a boon, are leveraging serious threats in EM economy collapses and debt failure. There is even a direct inflation aspect here that returns to the Fed. It will be important to watch the Doha meet outcome."


GBP/USD - "While economic data surprises such as increased inflation measurements are nice, it’s unlikely we’ll see anything close to a surge of GBP buying outside the occurrence that Brexit risk is diminishing or has diminished. Additionally, even polls showing a shift in the ‘Vote Stay’ or ‘BRemain’ camp taking a lead are unlikely to be a dramatic catalyst for GBP bargain hunters just yet."


USD/JPY - "In the meantime, there is a threat to the long side of the Yen, and that’s the prospect of BoJ intervention in the spot market. Earlier this week, the head of the BoJ mentioned that he felt that Yen strength had been ‘excessive,’ which would be the most concerted tone that Mr. Kuroda has offered on such matters publicly. This can also be seen as a threat to traders looking to sit in the long Yen trade. But with a G7 meeting in Tokyo set for May, the timing of intervening in the spot market may be ill-suited to such actions. Previous G7 meetings have seen condemnation around ‘beggar thy neighbor,’ currency-weakness based monetary strategies, and Japan might want to avoid such a scenario on their own home turf."


USD/CNH - "The probability of PBOC cutting RRR after the Fed’s next meeting on April 27th is high. The Fed will determine whether to raise US benchmark rates at this meeting, and the probability of the Fed increasing rates in the April meeting is 0% and for June is currently showing at 15.4% based on Fed Funds futures. The Yuan’s appreciation against the US Dollar over the past two weeks has helped to slow down the pace of capital flowing out of China."


GOLD (XAU/USD) - "From a technical standpoint, gold is either setting up a multi-month head & shoulders top OR consolidating into a triangle with an inevitable topside breach favored. In either case, the key levels remain the same with key support eyed at 1211/12 backed by our broader bullish invalidation level at 1191/93. Resistance stands at the February & March high-day closes at 1246/50 with a breach above the median-line confluence, just ahead of the 2016 high-close at 1271 needed to validate the next leg higher. Note that daily momentum has continued to hold above 50 since the start of the year and we’ll want to see this continue if the long-bias is to remain intact." 



Weekly Trading Forecast: Dollar Slide and Euro, Equity Rallies Temper
Weekly Trading Forecast: Dollar Slide and Euro, Equity Rallies Temper
  • DailyFX
  • www.dailyfx.com
Yellen cut the legs from under the Dollar, but the currency hasn't simply collapsed. Market conditions may be tempering fundamental drive heading into the new quarter. The US Dollar has struggled for trend recently; and given the fundamental and market conditions backdrop, that is unlikely to improve in the coming week. As EUR/USD appears to...
Sergey Golubev
Moderator
113476
Sergey Golubev  

NZD/USD Intra-Day Fundamentals: NZ Consumer Price Index and 75 pips range price movement

2016-04-17 22:45 GMT | [NZD - CPI]

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

[NZD - CPI] = Change in the price of goods and services purchased by consumers.

==========

  • The consumers price index (CPI) rose 0.2 percent to a level of 1200.
  • Petrol prices fell 7.7 percent, making the largest downward contribution. 
  • Low oil prices contributed to price falls for air fares.
  • Housing-related prices and food prices rose.
  • Prices for tradable goods and services fell 0.9 percent, while prices for non-tradable goods and services rose 1.0 percent.
  • After seasonal adjustment, the CPI rose 0.2 percent.

==========

NZD/USD M5: 75 pips range price movement by NZ Consumer Price Index news event :


Consumers Price Index: March 2016 quarter
Consumers Price Index: March 2016 quarter
  • www.stats.govt.nz
The CPI increased 0.4 percent (up from 0.1 percent in the year to the December 2015 quarter).
Sergey Golubev
Moderator
113476
Sergey Golubev  

EUR/USD Intra-Day Fundamentals: FOMC Member Dudley Speaks and 16 pips range price movement

2016-04-18 12:30 GMT | [USD - FOMC Member Dudley Speaks]

[USD - FOMC Member Dudley Speaks] = The speech opening remarks at the Federal Reserve Bank of New York's conference.

==========

EUR/USD M5: 16 pips range price movement by FOMC Member Dudley Speech news event :


Opening Remarks at the Transatlantic Economy: Convergence or Divergence Conference - FEDERAL RESERVE BANK of NEW YORK
  • www.newyorkfed.org
It is my pleasure to welcome you to today’s conference.  Over the past decade, the New York Fed has been working together with the European Commission and the Centre for Economic Policy Research in sponsoring a number of conferences on interdependencies and policy challenges on both sides of the Atlantic Ocean.  Today, as in the past, we have a...
Sergey Golubev
Moderator
113476
Sergey Golubev  

Technical evaluation of long-term BNZ forecasts (adapted from the article)

Bank of New Zealand made a long-term forecasts for some pairs as the following:

 PairBy end of Q2'16
(June 2016)
By end of Q3'16
(September 2016)
By end of Q4'16
(December 2016)
By end of Q1'17
(March 2016)
EUR/USD
1.1200
1.1100
1.0900
1.0900
NZD/USD
0.6500
0.6300
0.6100
0.6100

As we do not know the trading system they used for this forecast so let's evaluate on technical way by Metatrader together with using free Codebase indicators.

EUR/USD. As we see from the chart below - weekly price is on bearish market condition with the ranging within the following key support/resistance levels:

  • Fibo resistance level at 1.1464 located near the border between the primary bearish and the ranging bullish trend on the chart, and
  • support level at 1.0821 located far below 100 SMA/200 SMA reversal area on the primary bearish trend.


The price is on local uptrend as the bear market rally to be started in the end of February this year: price is testing Fibo resistance level at 1.1464 to above for the rally to be continuing. The next alternative scenario was evaluated by BNZ and it is related to the following: the price will be on bearish ranging within narrow support/resistance levels such as the following: 23.6% Fibo level at 1.1241 and 50.0% Fibo level at 1.0993. Bank of New Zealand is expecting for this ranging bearish condition to be continuing up to the end of Q1'17 for example.

I think the more likely sscenario for this pair in long-term situation is to ranging with more wide levels within 1.1400 and 1.1000, and those levels are fully related to the daily chart's s/r/ levels together RSI and price pattern's expectation for example.

NZD/USD. BNZ is estimating for this pair to be on bearish ranging within very narrow levels with the bearish trend to be continuing since 0.6500 to 0.6100. But if we look at weekly chart so we can see the bearish market condition with the different ranging levels: the price is on ranging within Fibo resistance level at 0.6965 and 61.8% Fibo support level at 0.6564. By the way, the ascending triangle p[attern was formed by the price to be crossed for the bear market rally to be continuing with the possible buloish reversal to be started in the future.


RSI indicator is also estinating the secondary rally with possible bullish reversal.

Thus, the most likely scenarios for the pair are the following: bearish ranging within 0.69/0.65 levels, or the bullish erversal to be started in case the price breaks 0.6965 to above.

Sergey Golubev
Moderator
113476
Sergey Golubev  

AUD/USD Intra-Day Fundamentals: Reserve Bank of Australia Meeting Minutes and 20 pips range price movement

2016-04-19 01:30 GMT | [AUD - RBA Meeting Minutes]

==========

AUD/USD M5: 20 pips range price movement by Reserve Bank of Australia Meeting Minutes news event :


2016 | Minutes of the Monetary Policy Meeting of the Board | RBA
  • www.rba.gov.au
Minutes of the monetary policy meetings of the Reserve Bank Board are published two weeks after each meeting. (The Reserve Bank Board normally meets eleven times each year, on the first Tuesday of each month, except January.) Minutes were first published in December 2007, when minutes for meetings from October 2006 were also released.
Sergey Golubev
Moderator
113476
Sergey Golubev  

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

EUR/USD: ranging within 1.1233 and 1.1331

H4 price is located near and below 100 period SMA (100 SMA) and above 200 period SMA (200 SMA) for the ranging market condition: the price is testing 1.1331 level to above for the bullish reversal, alternative - if the price breaks 1.1233 support level to below so the bearish reversal will be started.

Anyway, UOB is still looking for the bearish trend for this pair in intra-day basis, for example:

"There is no change to our bearish view but as highlighted previously, downward momentum is not very strong and the downside potential is likely limited to 1.1145. Stop-loss remains unchanged at 1.1395 but 1.1350 is already a strong short-term resistance."

RSI indicator is estimating the ranging bullish trend to be continuing.  

  • If the price will break 1.1331 resistance level on close bar so the primary bullish trend will be continuing without secondary ranging.
  • If price will break 1.1057 support on close bar so the reversal of the price movement from the primary bullish to the primary bearish market condition will be started.
  • If not so the price will be ranging within the levels.


Resistance
Support
1.13311.1233
N/AN/A
  • Recommendation to go short: watch the price to break 1.1233 support level for possible sell trade
  • Recommendation to go long: watch the price to break 1.1331 resistance level for possible buy trade
  • Trading Summary: ranging
Sergey Golubev
Moderator
113476
Sergey Golubev  

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

GBP/USD: bullish breakout with 1.4347 as the target to be continuing

H4 price broke 100 SMA/200 SMA reversal area to above by good breakout: the price is testing 1.4347 resistance level for the bullish trend to be continuing, otherwise the price will be ranging within 1.4347 bullish resistance level and 1.4040 bearish support level. By the way, UOB is evaluating the trend for this pair as a neutral with 1.4000/1.4350 range:

"Improving short-term momentum suggests that a test of the top-end of our expected 1.4000/1.4350 range will not be surprising. However, the overall outlook is mixed and even a break above 1.4350 is not expected to move significantly above the late March high of 1.4455/60."

RSI indicator is estimating the ranging bullish trend to be continuing.  

  • If the price will break 1.4347 resistance level on close H4 bar so the primary bullish trend will be continuing.
  • If price will break 1.4040 support on close bar so the price will be reversed to the bearish market condition.
  • If not so the price will be ranging within the levels.


Resistance
Support
1.43471.4130
N/A
1.4040
  • Recommendation to go short: watch the price to break 1.4040 support level for possible sell trade
  • Recommendation to go long: watch the price to break 1.4347 resistance level for possible buy trade
  • Trading Summary: intra-day bullish reversal
Sergey Golubev
Moderator
113476
Sergey Golubev  

EUR/USD Intra-Day Fundamentals: ECB Current Account and 12 pips range price movement

2016-04-19 08:00 GMT | [EUR - Current Account]

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

[EUR - Current Account] = Difference in value between imported and exported goods, services, income flows, and unilateral transfers during the previous month.

==========

EUR/USD M5: 12 pips range price movement by ECB Current Account news event :


Euro area balance of payments
Euro area balance of payments
  • European Central Bank
  • www.ecb.europa.eu
Latest release on: 19 April 2016 Euro area balance of payments and international investment position (Quarterly developments - BPM6) Latest release on: 07 April 2016 As of 30 October 2014 BPM6 has replaced BPM5.