Eur/usd - page 229
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EURUSD still stuck in the range. How best to approach trading it
A technical look at the EURUSD
The EURUSD continued to trade in a consolidation range last week. This week there is potential for a break with Greece hangover, Yellen and Draghi scheduled to speak. How can you approach trading in this type of environment.source
Euro Cautious Ahead Greek Extension Deal Confirmation
The euro was little changed ahead of the European open on Monday, with the Greek deal from Friday bringing at least short-term relief to markets.
"While markets will no doubt greet Friday’s events with relief, anyone thinking that this is the end of the matter had better think again. While the fear of a Greek exit has been avoided for now, it is by no means off the table, and to all intents and purposes nothing much has changed, in Greece, or anywhere else for that matter," Michael Hewson from CMC markets wrote on Monday.
Greek PM Alexis Tsipras's government prepared a list of reform steps on Sunday to secure an extension of loans from the euro zone as required by the deal agreed on Friday night in Brussels. The meeting was also attended by the European Central Bank (ECB) Head Mario Draghi, International Monetary Fund (IMF) Managing Director Christine Lagarde, EU Economic Commissioner Pierre Moscovici and several other EU officials.
The agreement of a temporary four month extension or "bridge" obtained by Greece now needs to be backed up today by a list of reforms, to replace the other 30% of the measures that it didn’t agree with as part of its current program.
The euro traded in a very narrow range on Monday morning, recovering somewhat from the overnight fall to $1.1360, to trade 0.02% higher at $1.1379.
Technical analysis
EUR/USD is moving sideways on intraday charts, as it reached a multi week low at $1.109. The currency cross established a trading range between $1.15 and $1.11, which on a daily timeframe looks like a so-called downtrend continuation pattern "bearish flag formation".
On an intraday basis the range is even thinner, and the playground is outlined by resistance at $1.1470 and support of $1.13.
Any trading, as long as the cross remains in the pattern, should be avoided. In the short term we are more likely bullish, since if prices break above $1.15, a spike toward $1.17 will likely be seen.
source
EURUSD initially fell but found enough support at 1.1278 near the bottom of the consolidation zone to turn around and close slightly in the green above the 10-day moving average. Greece and the Euro group agreed a 4-month extension of the country’s bailout program so we might see another retest of the top of the consolidation zone at 1.1450.
German IFO Business Climate disappoints
The German IFO Business Claimte number for February was expected to continue advancing, to 107.7 points from 106.7 reported for January. The expectations component carried expectations for a move from 102 to 103 points and the current assessment from 111.7 to 112.7 points.
EUR/USD began the week on the back foot, falling to 1.1337 before the publication.
Business confidence has been on the rise in recent months after long months of falls in the first part of 2014. However, the latest release from ZEW showed a weaker than expected advance.
The Greek crisis has seen a temporary relief with a deal on a 4 month extension on Friday. Nevertheless, the crisis is far from over.
EUR/USD loses 1.13 as some Greek proposals reported
EUR/USD began the new trading week with a gradual and consistent slide to the downside. It fell from the highs but still has room towards support.
Reports coming out of Greece suggest that the government in Athens is not backing down from its red lines regarding the minimum wage, pensions and other heated topics. The list of reforms still hasn’t been officially submitted, but these reports already cause a stir.
Alongside a rejection of some of the austerity measures, these reports also note other sources of raising money: mostly via cracking down on tax evasion. Nevertheless, markets currently think it’s not good enough.
In any case, the crisis is far from over, and there could be additional “cliffhangers”. Greeks have a public holiday today but the Greek government and especially Yanis Varoufakis are very busy.
According to the deal struck on Friday, Greece will get a 4 month extension, but this depends on an approval of reforms. The debt stricken has a deadline: end of day.
Support awaits at 1.1270, a line tested on Friday before the deal was reached. Further support is at the round number of 1.12. Resistance awaits at 1.1373, followed by 1.1460.
source
thanks for the news.
Solid Growth 'Sicher' in Germany: Final Q4 GDP
he final GDP reading for Germany acknowledged that the largest economy in Europe moved further away from recession territory in the final quarter of 2014, according to data provided by the Federal Statistical Office (Destatis) on Tuesday.
Economic output in Europe's powerhouse posted 0.7% growth in the three-month period ending December 2014, after showing a meager 0.1% improvement in the third quarter, measured on a quarterly basis. The reading was in line with the growth projected by analysts and confirmed preliminary data.
Calculated on a yearly and non-seasonably adjusted basis, the gauge revealed a 1.6% increase, in line with estimates, and better than the previous quarter's 1.2% upturn.
Economic outlook
"Germany’s economic growth is expected to strengthen gradually with the support of a robust labor market and favorable financing conditions underpinning domestic demand, and improving external demand," according to the latest economic forecast from the European Commission (EC), the so-called Winter Economic Forecast.
"The continued decline in oil prices should have a positive effect on growth but will also temporarily significantly lower inflation. Corporate investment is forecast to resume hesitantly, while public investment is expected to pick up further. The general government budget should remain in surplus over the forecast horizon," the EC says.
Based on the EC's forecast, GDP is expected to increase by a moderate 1.5% in 2015, helped also by more working days, and to accelerate to a rate of 2.0% in 2016.
Consumer prices are forecast to rise only slightly by 0.1% in 2015 and more strongly by 1.6% in 2016.
The unemployment rate is expected to edge down by one notch in both 2014 and 2015, coming in at 4.9% and 4.8%, respectively.
Moreover, the German Chambers of Commerce (DIHK) on February 11 considerably lifted its growth outlook for 2015, as lower oil prices and a weaker euro are expected to boost Europe's powerhouse, despite the Ukraine crisis and uncertainty about Greece's future in the euro.
The DIHK said the German economy will expand more strongly this year than previously expected. It raised its growth forecast for this year to 1.3% of GDP from 0.8% forecast previously.
source
EURUSD fell during yesterday session, closing in the red, below the 10-day moving average and in the middle of the day’s range. The pair is still consolidating between the top 1.1450 level and the 1.1270 level on the bottom. The currency should continue in consolidation mode until we see a clear break off a support or resistance with an impulsive candle.
EUR/USD fails to recover as Greek list examined
Greece has submitted the list of reforms to the euro-zone and now it is examined.
Despite some optimistic comments, EUR/USD remains in the low range.
According to some sources, the Greek list is “sufficiently comprehensive” to be a valid starting point. What does this mean? The European ministers will convene by teleconference.
According to the original plan, Greece was to submit a general list by Monday, end of day. It is unclear if it was submitted on time, or if Greece received an extension of one day.
The German finance minister already submitted a request to the parliament to extend the Greek loan, but this is with a big asterisk: pending institutions’ approval.
Yesterday, some leaks of the Greek draft weighed on the euro: it seemed that they would not go far enough to receive the green light from the European partners.
However, EUR/USD managed to recover thanks to the dollar’s weakness. Nevertheless, EUR/GBP fell quite sharply. Later today we have speeches from both ECB president Mario Draghi and Fed Chair Janet Yellen.
Support awaits at 1.1270 and resistance at 1.1373.
source
Euro Inflation Tumbles to Joint-Record Low in Jan : CPI
Euro zone consumer prices markedly accelerated their downturn in January, Eurostat confirmed in a final reading on Tuesday. With the gauge continuing to be dragged down by a slump in the cost of non-energy industrial goods, annual inflation remained well below the European Central Bank's target, supporting the backers of the latest money-printing plan.
Prices in the 19 countries using the single currency in January were 0.6% lower than a year earlier, after a 0.2% decline in December.
A flash print on January 30, showed such a figure, missing original estimates that had called for a 0.5% downturn.
The euro zone has only endured negative inflation rates in one other period, from June to October 2009, immediately after the outbreak of the global financial crisis. Last month's decline matched the lowest figure booked back then, in July 2009.
Tumbling deeper
On the month-on-month basis, the gauge trashed 1.6%, falling markedly deeper than the 0.1% downturn seen in December.
Meanwhile, the so-called core CPI - a gauge stripped of volatile energy, food, alcohol & tobacco - rose 0.6% during the reported month, measured on a non-seasonally-adjusted and yearly basis. Back in December, the gauge hiked 0.7%.
The final figure met the preliminary print, while original estimates had called for an unchanged print.
Fighting with deflation
So, the numbers suggest prices have not responded to recent easing measures, but the ECB is scaling up its efforts this month by unveiling a full-blown QE.
Headline inflation has also been in what the ECB calls the 'danger zone' - below 1% since October 2013.
The ECB aims to keep inflation just under 2% over the medium term and the risk of sustained deflation led the bank earlier this month to launch a €1.1 trillion quantitative easing program of government-bond buying.
Although ECB board members accept that weaker oil prices should increase spending power - recognizing that falling prices do not necessarily stifle consumer demand - they also point to a prime evil of deflation - a scenario in which shoppers and companies would delay purchases and investment because they anticipate lower prices in the future.
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