My forecasts by EURUSD, GBPUSD, USDCHF, USDJPY, GOLD - page 35

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Pound still not finding support. After FOMC time is always like that : very slow

 

USD/JPY weekly outlook: April 14 -18

The yen ended the week broadly higher against the dollar after the Bank of Japan refrained from implementing fresh stimulus measures at its latest policy meeting, while dovish Federal Reserve minutes weighed on the dollar.

USD/JPY ended Friday’s session at 101.61, after weakening to 101.31 earlier in the trading day, the lowest since March 19. For the week, the pair lost 1.41%.

The pair is likely to find support at 101.20 and resistance at 102.12, Thursday’s high.

The greenback briefly found support after data on Friday showed that U.S. producer prices rose 0.5% in March, the largest increase in nine months and ahead of expectations for a 0.1% increase.

Demand for the yen continued to be underpinned after Bank of Japan Governor Haruhiko Kuroda said Tuesday the economy can weather a sales tax increase without further monetary policy measures to offset it.

Earlier Tuesday, the BoJ voted to keep its policy target of increasing the monetary base unchanged at an annual pace of 60 trillion to 70 trillion at the end of its two-day policy meeting.

Kuroda said economic growth and inflation were likely to continue to pick up in the coming months despite a sales tax increase in April.

The dollar came under heavy session pressure after the minutes of the Federal Reserve’s March meeting indicated that an interest rate increase is unlikely to be warranted for some time.

The Fed’s March meeting minutes, released on Wednesday, showed that policymakers discussed whether to keep interest rates at record lows until inflation moves higher, and did not elaborate on a possible timeframe for when rates could start to rise.

Last month the U.S. central bank reduced the monthly pace of asset purchases by $10 billion, to $55 billion, and repeated it is likely to continue paring the program in “further measured steps.”

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GBP/USD Outlook April 14-18

GBP/USD reversed directions last week and climbed 150 points. GBP/USD closed at 1.6728. This week’s highlights are CPI and Claimant Count Change. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

There were no surprises from the Bank of England, as QE and interest levels remained unchanged. Strong manufacturing and GDP data helped lift the pound against a sagging US dollar. In the US, unemployment claims dropped to a six-year low and consumer sentiment wrapped up the week on a high note.

  1. BRC Retail Sales Monitor: Monday, 23:01. This indicator measures retail sales in the BRC chain of stores. The February release disappointed with a decline of 1.0%, its worst showing since last April. The markets will be hoping for a turnaround in the upcoming release.
  2. CPI: Tuesday, 8:30. CPI is the primary gauge of consumer inflation. The index has been dropping steadily since mid-2013. The February release came in at 1.7%, matching the forecast. The downward trend is expected to continue, with an estimate of 1.6%.
  3. PPI Input: Tuesday, 8:30. The Producer Price Index Input looks at inflation in the manufacturing sector. The index has looked weak, with six declines in the past seven releases. Another drop is expected, with the estimate standing at -0.1%.
  4. RPI: Tuesday, 8:30. Retail Price Index has been steady, posting a gain of 2.7% last month, edging out the estimate of 2.6%. The estimate for the March release stands at 2.5%.
  5. Claimant Count Change: Wednesday, 8:30. Claimant Count Change is one of the most important indicators, and can have a significant impact on the movement of USD/CAD. The indicator, which measures the change in unemployment claims, looked solid in February, with a reading of -34.6 thousand. This easily beat the estimate of -23.3 thousand. Another sharp decline is expected in March, with the estimate standing at -30.2 thousand. Will the indicator repeat and beat the prediction? The unemployment rate is expected to remain unchanged at 7.2%.
  6. Average Earnings Index: Wednesday, 8:30. The indicator is an important gauge of consumer inflation. It has been steadily rising, climbing to 1.4% in February, edging above the estimate of 1.3%. The upward trend is expected to continue, with an estimate of 1.8% for March.

* All times are GMT

source

 
The pound also spent the last session in the lateral trade and as the euro, prices closed the day at the dispute with the dollar. However, the pair showed a quite multidirectional activity after the UK news was published. The market is not ready to decrease. We should expect a continued growth in the near future. If buyers are able to break above 1.6800, the next target will be 1.6850.
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GBP/USD strongest since 2009, EUR/USD remains resilient

Sterling is on its front foot as the holiday shortened trading week draws to a close following better than expected UK employment statistics. Data released Wednesday showed that the unemployment rate in the UK bested the consensus forecast of 7.1%, declining to 6.9% in March; its lowest reading in almost 5-years.

Previous to this data the British unit had been looking at risk due to Tuesday’s CPI result, which revealed that inflation in the UK continued to slide last month. As recently as July 2013 inflation was at 2.9%, near the top of the Bank of England’s (BoE) target band, however this week’s number printed 1.6%. The speed and depth of these declines is a concern to the BoE, whom have already warned of the risks that dis-inflation pose to the broader UK recovery.

Investors however chose to focus on the unemployment number over the CPI result, driving cable to its strongest value since late 2009. The move to new highs injects fresh interest into this pair and revives talk of 1.7000. Talk that had previously been sidelined by strong economic results in the United States and the market’s bullish interpretation of comments from new Federal Reserve chairperson Janet Yellen.

The Pound’s gains also extended to the Euro, with GBPEUR edging up this week towards February’s annual high. GBPEUR aside, despite tensions in Ukraine flaring up again this week, the common currency has been remarkably buoyant as EUR$ holds near cycle highs, only a few couple of big figures away from 1.4000, a level not seen since 2011.

Like this week, a bank holiday compounds an already light data calendar next week. There is no top tier data to speak of until Wednesday next week when we get EZ Manufacturing & Services PMI numbers. Particular scrutiny will be on the French Manufacturing results given that last month it posted above 50.0 (indicating expansion) at 51.9. This was the strongest result in almost 3-years and the first time in 2-years that an expansionary number was achieved. Given the weak EZ inflation number released last month markets are wary that the expansionary Manufacturing PMI outcome might have been a 1-off event and will be sensitive to the risks of a sub-50.0 reading next week.

The voting statistics from the recent BoE policy announcement will also be published Wednesday. Expectations are that data will once again reveal unanimity amongst voting members of the Monetary Policy committee to maintain the current accommodative policy rate and quantitative easing program.

source

 

USD/JPY up at the end of U.S. session

The U.S. Dollar was higher against the Japanese Yen on Friday.

USD/JPY was trading at 102.42, up 0.001% at time of writing.

The pair was likely to find support at 101.42, Monday’s low, and resistance at 102.57, today’s high.

Meanwhile, the U.S. Dollar was up against the Euro and down against the British Pound, with EUR/USD shedding 0.03% to hit 1.3810 and GBP/USD rising 0.06% to hit 1.6802.

 

The Japanese yen had a relatively relaxed trading week, sticking to the known range. This will probably change now. A busy week awaits traders with the rate decision standing out. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

Japan reported the widest trade deficit on record: no less than 1.71 trillion yen. The unimpressive rise in exports despite a weak yen is certainly worrying for policymakers. The battle against inflation is making progress, but the post tax hike inflation numbers came out below expectations. Is this enough to trigger new stimulus from the BOJ

  1. Retail Sales: Sunday, 23:50. Japanese retail sales enjoyed nice year over year gains in recent months, reaching 3.6% in February. The month of March was the last one before the sales tax hike, and a much bigger rise is expected. A weak or similar figure could ring alarm bells.
  2. Manufacturing PMI: Tuesday, 23:15. Markit’s survey of around 300 managers has shown a drop in expected growth levels: from 55.5 to 53.9 points in March. For April, a bigger drop is feared after the sales tax hike came into effect. If the index remains above the 50 point mark separating growth from contraction, policymakers could make a sigh of relief.
  3. Industrial Production: Tuesday, 23:50. This is the initial figure for March, and a revision is expected afterwards. February saw a disappointing drop of 2.3% in output after two months of rises. While this indicator is volatile, it still has a significant impact. A rise is expected now.
  4. Average Cash Earnings: Wednesday, 1:30. This year over year measure of salaries is yet another gauge of inflation. The Japanese government called on corporations to raise wages. After remaining flat in February, a minor rise is expected for March.
  5. Rate decision: Wednesday morning. In the first rate decision after the sales tax hike came into effect, the BOJ preferred a “wait and see” approach. Also this time, it is likely that not enough evidence is available in order to assess if more stimulus is needed. A pledge to maintain current policy until the 2% inflation goal is reached is a more likely scenario. Any unexpected moves are likely to weaken the yen.

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GBP/USD Outlook April 28-May 2

GBP/USD had an uneventful week and was practically unchanged. The pair closed the week just shy of the 1.68 line. This week’s highlights are Preliminary GDP and Construction and Manufacturing PMIs. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

In the UK, Retail Sales sagged in March but managed to beat the estimate. Over in the US, key releases pointed in all directions last week. Employment and housing data disappointed, but manufacturing and consumer confidence numbers looked sharp.

  1. Preliminary GDP: Tuesday, 8:30. This is one of the most important economic indicators and should be regarded by traders as a market-mover which could affect the direction of GBP/USD in a hurry. It is released every quarter, magnifying the impact of each release. The indicator continues to point to solid economic growth and posted a gain of 0.7% in Q4. The markets are expecting better news out of Q1, with an estimate of 0.9%.
  2. 10-year Bond Auction: Tuesday, Tentative. The average yield on 10-year bonds rose to 2.93% in the February release, marking a five-month high. As a minor event, the release is not likely to impact on GBP/USD, but helps analysts gauge the level of investor confidence.
  3. GfK Consumer Confidence: Wednesday, 23:05. Despite a stronger British economy, consumer confidence remains mired in negative territory, pointing to a pessimistic British consumer. However, the indicator has been steadily improving, and last month’s reading of -5 points was a five-year high. The estimate for the March release stands at -4 points.
  4. BOE Chief Economist Spencer Dale Speaks: Wednesday, 15:30. Dale will testify before the Treasury Select Committee in London. Analysts will be looking for any hints regarding the BOE’s future monetary policy, particularly interest rate levels.
  5. Nationwide HPI: Thursday, 6:00. The index is an important gauge of activity in the housing sector and also helps measure the depth of consumer spending. The indicator dipped to 0.4% in March, its worst showing in close to a year. This fell short of the estimate of 0.7%. The markets are expecting better news in April, with the estimate standing at 0.6%.

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The USDCHF was indecisive yesterday. The bias is neutral in nearest term probably with a little bearish bias testing 0.8740 support area. Immediate resistance is seen around 0.8815. A clear break above that area could trigger further bullish pressure testing 0.8850. Overall I still prefer a bearish scenario at this phase unless price breaks above 0.8870.

 

USD/JPY Forecast May 5-9

The Japanese yen traded in range for some time and eventually made a move higher. The meeting minutes from the BOJ as well as their outlook are the main events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

The Bank of Japan left its monetary policy unchanged and remained upbeat regarding the economy. This comes despite a weaker than expected growth in industrial output and a worrying manufacturing PMI. In the US, the excellent Non-Farm Payrolls report showed a gain of 288K jobs countering a poor GDP growth figure for Q1.

Updates:

  1. Markit Services PMI: Tuesday, 23:15. In March, Japan’s services sector still pointed to growth, with 52.2. We may get a change in April following the weak manufacturing PMI.
  2. Monetary Policy Meeting Minutes: Tuesday, 23:50. The meeting minutes are not from the latest meeting, but they still provide insight and perhaps hints to the next moves. Is the current stimulus sufficient?
  3. Coincident Index: Friday, 5:00. This figure has been on the rise for quite some time, but ticked lower last month to 114.9 points. The preliminary number for March is likely to show stability now.
  4. Leading Indicators: Friday, 5:00. This composite indicator, based on 11 separate ones, disappointed by falling sharply to 108.5%, erasing steady gains seen beforehand. In March, a small recovery is likely.

* All times are GMT

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