My forecasts by EURUSD, GBPUSD, USDCHF, USDJPY, GOLD - page 36
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GBP/USD forecast for the week of May 12, 2014, Technical Analysis
The GBP/USD pair initially tried to rally during the week, but as you can see the 1.70 level of course did offer the resistance and we anticipated seen. With that, it appears that the market found a lot of sellers in that general vicinity, turning the market completely around and forming a massive shooting star by the end of the week. The target has been hit with that we have been talking about for some time, so quite frankly we are flat of this market at the moment. However, we still believe that the buyers will take control the market again. However, it might take a minute.
The shooting star doesn’t have us selling, rather it has us looking for some type of buying opportunity lower as we pull back from lofty levels. That being the case, the reality is that the buyers will be very interested in going long as lower levels.
The 1.65 level is massively supportive obviously, and therefore any move down to that level would be very interesting for us as it would provide a longer-term buying opportunity. However, the 1.67 level could also be an area where we find buyers. On the other hand, if we break the top of the shooting star, that’s a very bullish move, and we would be very bullish of the British pound at that point time as it should send the market to the 1.75 handle first, and probably much higher than that.
We also see a taut of support just below the 1.65 handle, so we think that is essentially the “floor” in this marketplace. If we managed to break down below the 1.64 handle, at that point time we could very easily see this market turned around and perhaps have a trend change again. That is without a doubt the least likely scenario, but it is a possibility that we have to keep in mind. Ultimately though, we do have a longer-term target 1.75, and possibly 1.80 by the end of the year given the right conditions.
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USD/JPY Forecast May 12-16
The Japanese yen enjoyed the weakness of the greenback and USD/JPY dropped. Can it bounce from uptrend support?The main event of this busy week is the release of GDP for the first quarter. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
The big fall in the USD gave a boost to the yen, which had a slow start to the week due to the holiday. Yellen’s soft words in two testimonies had little positive impact, but the pair managed to stabilize above the moderate uptrend support line. The focus now shifts to Japan.
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GBP/USD forecast for the week of May 19, 2014
The GBP/USD pair fell during the bulk of the week, but found enough support below to form a hammer. This hammer should send prices back to the upside, but we had a shooting star from the previous week right at the 1.70 level, an obvious resistance area on the longer-term charts. Because of this, we feel that this market will probably go higher, but it may be a bit of a grind from here as the resistance will have to be overcome. However, we get above the 1.70 level, we feel that this market will in fact go much higher, probably to the 1.75 level, if not higher than that. Obviously, that’s a longer-term Outlook, but ultimately we do see that this market has been very well supported and has had a nice uptrend for some time. In fact, the bottom of the hammer from the week touched that uptrend line that we just mentioned.
There should be a bit of a “floor” at the 1.65 handle, which has been massively supportive as well as resistive in the past. In fact, that’s a very thick support zone down to the 1.64 handle at the very least, so the on-demand unit broken to the downside are very slim at this point in time. With that, we think that buying on the dips will be done by short-term traders, and probably will remain so until we get to the 1.75 handle, whenever that ends up being.
If we did manage to break down below the 1.64 handle, we think at that point time the market would be somewhat broken, and would almost have to go down to the 1.60 handle if not lower than that given enough time. However, the interest rate differential continues to favor the British pound, and we see absolutely no reason to think why that’s going to change anytime soon, so ultimately we feel that we are in an uptrend going forward, thereby giving us much more confident on the long side of the equation in this pair.
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The Japanese yen had a second strong week, with USD/JPY dipping below uptrend support. The rate decision in Japan is the key event now. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
Japanese GDP growth came out at 1.5% in Q1 2014, much better than expected. Stronger economic growth can turn into wage growth and then into stronger inflation: the BOJ’s target. Adding the ongoing tensions in Ukraine, the safe haven yen certainly benefited from the move and hit uptrend support. Can it break below this line now? The big current account deficit was ignored. In the US, data was mostly positive, but the drop in US yields made it hard for the greenback to rally, especially against the yen.
* All times are GMT
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GBP/USD forecast for the week of May 26, 2014, Technical Analysis
The GBP/USD pair went back and forth during the course of the week, forming a shooting star right after forming a hammer. We now have a pattern where we have 2 shooting stars and one hammer recently, and as a result we feel that this market is probably going to struggle to get above the 1.70 level, but it will do so eventually. A break above that level census market much higher probably going to the 1.75 handle given enough time. A pullback to the 1.65 level is rather supportive, and as a result we feel that would probably be a buying opportunity as well.
EUR$ drops to 3-month lows, GBP/USD close to cycle highs
The British Pound has enjoyed a strong week as both the GBPEUR and GBPUSD (Cable) traded with firm footing thanks to bolstered sentiment. The revived Sterling interest stems from better than expected Consumer Price Index (CPI) and Retail Sales results this week.
On Tuesday data showed that consumer prices (inflation) in the UK grew at an annualised rate of +1.8%, which is better than both market expectations of +1.7% and last month’s reading of +1.6%. CPI has declined steadily from near 3% in the later part of 2013, which has been a concern for the Bank of England (BoE), who maintain a target inflation rate of 2.0%. This week’s result was welcomed by investors and the BoE alike, as it signals that the kind of declining inflation we’ve seen over the last 9 months or so may be starting to reverse. Retail Sales on Wednesday also posted better than forecast results, printing month-over-month growth of +1.3% against expectations of +0.5%.
One point to observe is that despite the positive data this week and the subsequent bounce off of monthly lows last week, gains in Cable have been rather limited. In fact, the pair’s entire weekly range was little more than 100-pips. While it is trading near multi-year highs, the lack of material gains this week nods to the theory that the multi-month rally this pair has enjoyed might be on its last legs. Put another way, given the epic rally in GBPUSD rates over the last year, markets could be moving towards a place where they’ve fully priced optimistic economic expectations for the UK; meaning that going forward gains could be harder fought.
GBPEUR’s performance this week has also been strong, the pair marching higher again and touching fresh 16-month highs; aided both by improved Sterling interest as well as worsening Euro sentiment. In fact the Euro looks to be wrapping the week up on a soft note following disappointing PMI data. Purchasing Managers’ Index survey results for both the Manufacturing and Services sectors of the Eurozone were mixed, with a few specific disappointments drawing the attention of investors and in turn defining the overall sentiment. Most notable among the data misses was French Services and Manufacturing results. Both of which printed below the critical 50.0 threshold, suggesting that surveyed managers feel their industry is in a state of contraction.
The worsening sentiment also drove EUR$ to its lowest since mid-February this week. This pair has now given up almost 4 big-figures since taking a run at 1.4000 early in May, as fortunes for this pair have reversed drastically in the last few weeks. The declines are primarily due to comments from European Central Bank president Mario Draghi, who signaled that a strong Euro may be the trigger for further accommodative monetary policy. The next major support in this pair comes in at 1.3475, which represents historical support from late January/ Early February.
It’s a light data calendar heading into the last week of May due to bank holidays in the USA & UK on Monday, and the EU on Thursday. The situation is compounded by a lack of top-tier data from either the EU or UK the entire week. Meaning that both Sterling and Euro are likely to take direction from broader market sentiment, and in particular US Dollar (Greenback) activity. With that in mind there are 2 pieces of American data that have the potential to impact currency markets; first up is Durable Goods on Tuesday and then Q2-2014 GDP on Thursday.
Expectations are that Durable Goods figure, which, excluding transportation items like airplanes, measures the volume of new orders placed with manufactures, will post +0.6% month-over-month growth, against last month’s reading of +2.0%. A healthy manufacturing pipeline is a key element to strong economic growth and thus the timing of any future monetary policy changes from the Federal Reserve (Fed), which directly impact USD values. As for Thursday’s GDP, markets will be looking for a rebound from Q1’s reading of +0.1%. Over the last year or so, the annualised GDP has consistently published in the upper +2% area, both the Fed as well as investors will likely need a result is consistent with that to support current monetary policy guidance.
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USD/JPY Forecast May 26-30
USD/JPY dropped to key support but bounced very nicely. A speech from BOJ governor Kuroda and fresh inflation numbers are the key events. What is the next direction for this major pair? Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
Yet again, the Bank of Japan refrained from action and it seems that the chances of new moves becomes lower. Together with global worries, the yen strengthened. However, the resilience seen in US stock markets together with a steady US dollar supported the pair.
* All times are GMT
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AUDUSD stays in a narrow range between 0.9208 and 0.9277. As long as 0.9277 resistance holds, the price action in the range could be treated as consolidation of the downtrend from 0.9408, further decline to 0.9000 area is still possible after consolidation. However, a break above 09277 resistance will indicate that the downward movement from 0.9408 had completed, then the following upward movement could bring price to 0.9360 area.
fter consolidation, EURUSD continued its downward movement from 1.3993, and the fall extended to as low as 1.3588. Resistance is now at 1.3668, as long as this level holds, the downtrend could be expected to continue, and next target would be at 1.3500 area. On the upside, a break above 1.3668 resistance will indicate that the downtrend 1.3993 had completed, then the following upward movement could bring price back to 1.4200 zone.
BPUSD broke below 1.6731 support, and the fall from 1.6920 extended to as low as 1.6697. Further decline could be expected in a couple of days, and next target would be at 1.6600 area. Near term resistance is at 1.6675, as long as this level holds, the downtrend will continue.
GBP/USD forecast for the week of June 2, 2014, Technical Analysis
The GBP/USD pair went back and forth during the course of the week with a slightly negative tone to it. At the end of the day though, the market seems to have found a little bit of support at the 1.67 level, so we think that this market will continue to go higher, and ultimately test the 1.70 level yet again. That area getting broken to the upside would be very bullish, and as a result it would become a buy-and-hold market at that point in time. The “floor” in this market is down at the 1.65 level.
USD/JPY Weekly Fundamental Analysis June 2 – 6
The USD/JPY ended the week at 101.77. The JPY remains in range-trading mode, temporarily supported by its safe-haven status. The Japanese yen (JPY) is likely to regain a weaker tone; traders can estimate a USDJPY 109 rate by the end of the year. USDJPY has traded in a relatively tight 100.76 to 104.13 range for several months, confined by Bank of Japan policy, a shifting macro outlook and investor positioning. Nevertheless, global investors are keenly monitoring the outcome of structural reforms implemented by the Shinzo Abe administration to address an unsustainable government finance situation
Data showed on Friday that the Japanese economy stumbled in April following the sales tax hike, and the International Monetary Fund warned that aggressive monetary easing “may need to be maintained for an extended period.”
The Bank of Japan “should act quickly if actual or expected inflation stagnates or growth disappoints,” the International Monetary Fund said. Massive monetary easing by the Bank of Japan has mainly given the government leeway to work on reforms needed to enhance Japan’s competitiveness in the longer run and to repair government finances, said Masaaki Kanno, chief economist at JP Morgan in Tokyo.
The April 1 tax hike and a further 2 percentage point increase planned for next year are part of the government’s effort to bring under control Japan’s huge public debt, which is more than twice the size of the economy.
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