My forecasts by EURUSD, GBPUSD, USDCHF, USDJPY, GOLD - page 43
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In just a couple of days, all the talk about Euro going to be par with USD disappeared. Anybody feels fooled?
as per my opinion for EURUSD, m bearish on the currency pair. i expect bearish correction in the currency pair which can take it to the level of 1.136 being the possible trigger point for the downward acceleration with dollar getting strong on account recovery from the mondays bloodbath. 1.150 can act as resistance for the pair.
USD/JPY Aug. 31-Sep. 4
USD/JPY plunged to start off the week but recovered and ended the week unchanged. The upcoming week has seven events, highlighted by Average Cash Earnings. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
The yen rose sharply early in the week in response to the financial meltdown due to the Chinese stock market crash. In Japan, consumer spending numbers missed expectations, while retail sales were excellent. Over in the US, Preliminary GDP beat expectations, helping the
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USD/JPY Outlook: Upside Potential Fades in Near Future
The US dollar was trading volatile during the previous weekend and it ended lower, undermined by a less than stellar payrolls report. The labor market data were enough to push the dollar higher against the euro, but not good enough to make the greenback stronger against the yen.
The US economy created 173,000 jobs in August, according to the latest payrolls report, while analysts had expected 217,000. July's number was revised from 215,000 to 245,000.
The unemployment rate ticked down to 5.1% from 5.3%, while the underemployment rate printed 10.3%.
"Given the lack of a clear steer from the Report, we continue to think that the probability of US monetary policy being tightened later this month is around 50:50. The bigger picture, though, is that we still forecast that the FOMC will raise the federal funds rate further and faster over the next year or so than most expect, as a tightening labor market puts significant upward pressure on wage and core inflation," analysts at Capital Economics wrote on Friday.
The option market, according to the 3-month risk reversal, is positioned for further decline on the pair, when the risk reversal dropped below zero again and created new cycle lows. It looks as if there is no impetus for the pair to go higher, but all is open until the FOMC meeting, which concludes on September 17.
Should the Fed hike rates, the USD/JPY pair might start strengthening again toward the ¥125 handle, but keeping rates at current levels will likely be dollar negative.
From the yen point of view, GDP is expected to decline from Q1 levels and should remain well in the negative territory, while the trade balance is also predicted to plummet into a deficit of ¥78 billion.
The technical situation is in favor of bears and the pair is therefore likely to keep declining in the next week, although volatility is not expected to be elevated as there are no significant fundamentals.
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USD/JPY Forecast Sep. 7-11
USD/JPY bucked the trend of the major currencies, as the yen gained about 140 points last week. The pair ended the week just below 119, its lowest weekly close since April. The upcoming week has nine events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
Safe haven flows continued boosting the yen in the ongoing uncertainty over China and the Fed hike. US employment numbers were mixed, last week, which only complicates things for the Fed, as it mulls over a rate hike. Manufacturing PMI was a disappointment, slipping to its lowest level since June 2013. Japanese manufacturing and housing numbers were short of expectations, but the yen still posted strong gains against the greenback.
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JPY: 7 Turning Signals, 2 Circuit Breakers - Deutsche Bank
"It may feel early, but below are 7 reasons that should make dip buyers on USD/JPY extremely nervous. Forces playing to JPY strength:
1. Unraveling of the Abe QE trade.
2. USD/JPY lower forces the likes of Life Insurance companies to raise their low currency hedge ratios on their stock of foreign bonds.
3. An easing in capital outflows.
4. USD/JPY has gone lower in 5 of 7 the last Fed tightening cycles.
5. Obviously the few remaining local carry trades are likely to be extremely vulnerable.
6. We are still at the early stages in an unwind of the yen’s competitiveness advantage, as NJA FX stages a catch up.
7. Early technical signals. GBP/JPY has recently broken its major 2012 ‘BOJ QE’ up trendline (And arguably the GBP has the closest linked cycle to the USD )
More sustained circuit breakers to the above concerns would be:
i) more BoJ QE (still seen as unlikely near term, although the rhetoric could shift if equities slide hard);
or ii) equities making a concerted turn higher. On the latter, how the Nikkei trades around the 2012 trendline that comes in near 17300 will be telling."
Alan Ruskin - Deutsche Bank
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Yen Lowest in a Week as QQE Headwinds Intensify
The Japanese yen dropped to its lowest level since September 2 after ruling Liberal Democratic Party lawmaker Kozo Yamamoto said the Bank of Japan's (BoJ) October meeting would be a "good opportunity" for further easing.
The USD/JPY knee-jerked to ¥121.32 following the comments, but the spike was shortlived and the major consolidated below ¥121 afterwards. It moved back above the ¥121 handle after the European open, and was seen trading 0.60% higher at ¥121.16 later on.
Marcel Thieliant from Capital Economics also expects further easing in October, saying that a tight labor market failing to generate wage gains with renewed falls in crude oil prices undermine the BoJ's attempts to lift inflation expectations.
"Uptrend in core consumer prices has resumed and the labor market continues to tighten but economic activity remains sluggish and wages are still falling," Thieliant said.
"We retain our view that the Bank will step up the annual pace of expansion of the monetary base from ¥80 trillion to ¥90 trillion at its end-October meeting," Thieliant added.
Moreover, the yen will be further influenced by the ongoing change in market sentiment. As for the data, the calendar in US will offer only weekly jobless claims figures.
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USD/JPY forecast for the week of September 14, 2015
The USD/JPY pair broke higher during the course of the week, clearing the 120 handle. With this being the case, if we can break above the top of the range, we feel that the market is going to head to the 125 handle, which means that the buyers should eventually take control. We believe that ultimately this pair does break above the 125 handle and continue to go higher, but at this point in time we have no interest in selling this market as the US dollar continues to strengthen overall.
USD/JPY Outlook: Pair in Consolidation, All Eyes on BoJ & FOMC
Japan's currency fell sharply above the ¥121 handle on Thursday, after ruling Liberal Democratic Party lawmaker Kozo Yamamoto said on Thursday that the Bank of Japan's (BoJ) October meeting would be a "good opportunity" for further easing.
This has been very negative news for the yen as it hints at possible change of rhetoric, or even changes in thinking of the governors in the BoJ. Moreover, the central bank is known for its surprising decisions and actions. Therefore, the risk is for further easing heading into the meeting.
The current QQE program currently stands at ¥80 trillion annually and any increases in volume should be taken very negatively by currency markets.
The technical outlook for the pair in the short term is neutral, with traders waiting for any jumps in the price to re-enter the market with short positions.
When it comes to the Fed, the odds for raising rates fell to only around 30% according to the fed funds futures and the Fed usually does what markets want, meaning more than 50% (ideally odds around 75%) should be required for the central bank to hike.
"Hedge fund managers, the former treasury secretary, the head of the IMF and World Bank chief economist amongst others have all warned against a Federal Reserve rate hike. Nevertheless, the Fed have continued to talk the talk, despite low inflation and turmoil in emerging markets so US stocks are now on the back foot on the chance they walk the walk," Jasper Lawler, market analyst at CMC Markets said on Friday.
Volatility will likely be extreme in the coming days and the Fed will be on the center stage. Should the central bank raise rates, despite market expectations for unchanged monetary policy, the pair should jump toward cycle highs above ¥125.00. The BoJ might help with some dovish statement or negative surprise for the yen.
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USD/JPY Forecast Sep. 14-18
USD/JPY moved higher as markets calmed. Can it continue or will risk aversion trigger flows to Japan? The rate decision by the BOJ is the main event. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
According to the latest data, Japan’s economy contracted by only 0.3% in Q2, better than originally published. Worries about future growth due to the Chinese slowdown were brushed away for now. Nevertheless, there is growing talk that the BOJ could introduce more easing in late October. In the US, positive JOLTs data was countered by a weak consumer confidence number. Will the Fed act?
* All times are GMT