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IronFX Daily Commentary | 12/10/2015
Language English
• USD defies Fed officials bullish comments The dollar remained under heavy selling pressure even after Fed Vice Chairman Stanley Fischer, became the latest policy maker to support the case for a year-end hike, joining William Dudley, Dennis Lockhart and John Williams. In IMF’s annual meeting in Peru, he said that while the previous two payroll reports have been “disappointing,” the job market’s prospects for further improvement “look good overall”. In line with the other FOMC members, he downplayed the significance of the weak September NFP report and emphasized on the overall labor market improvement. The dollar index, which measures the greenback's value against a basket of six major currencies, touched a low of 94.69 on Friday, its weakest level since September 18.
• The aspect of a US rate hike gained more supporters during the IMF’s annual meeting in Peru. Many central bank officials said that they prefer certainty over agony of waiting, and compared to a year ago, several EM Governors were keener that the Fed just go with it. In such case, the uncertainty over the impact on the markets from a forthcoming rate increase will be reduced, as simply delaying the increase will not solve the situation. Therefore, I would treat the current weakness in USD against its major peers as a corrective phase.
• Today’s highlights: The economic calendar is very light today and trading activity is likely to be thinner than usual. It is the Thanksgiving Day in Canada, the Health and Sports Day in Japan and the Columbus Day in the US. The US equity market will be open, but Banks and the Bond Market will be closed.
• There are three speakers on the agenda. The focus will be on the Atlanta Fed President Dennis Lockhart and Chicago Fed President Charles Evans, on any signs if they also support the notion that it would be appropriate to hike this year. Bank of Canada Governor Stephen Poloz also speaks.
• As for the rest of the week, on Tuesday, China’s trade surplus for September is forecast to have declined. Both exports and imports are expected to fall at a faster pace than in August. One of the reasons PBOC devaluated the yuan was to boost the nation’s exports. This doesn’t seem to have the desirable effect though. Also the decline in imports could hit AUD and NZD since Australia and New Zealand are heavily dependent on exports to China.
• The German ZEW survey for October is also coming out. The survey for September showed a mixed picture for Eurozone’s strongest economy. The expectations index declined once again from the previous month, while the current situation index increased moderately. This time, both indices are forecast to decline a bit, which could prove negative for EUR.
• We also get inflation data from the UK. The headline CPI is expected to have remained flat in September, while the core rate is expected to have risen a bit. Given that last Thursday, BoE officials were concerned that inflation is likely to rise slower than previously expected, a disappointing figure is likely to push further back expectations of a rate hike by the BoE, and put GBP under renewed selling pressure.
• On Wednesday, China’s CPI and PPI data for September are coming out. The forecast is for the CPI rate to decline to +1.8% yoy from 2.0% yoy, while the PPI rate is expected to remain unchanged. The slowdown in the CPI is likely to add to concerns over China’s economic slowdown and alongside a disappointing trade balance could hurt further AUD and NZD.
• In the UK, the unemployment rate for August is forecast to have remained unchanged at 5.5%, while average weekly earnings are expected to have accelerated to 3.1% yoy from 2.9% yoy. Further improvement in the UK job market is likely to support the pound, which could erase some of its Tuesday’s losses if the CPI data disappoint.
• In the US, both the headline and core (excluding autos and gasoline) retail sales for September are expected to have risen at the same pace as in August. The US PPI is also coming out.
• On Thursday, Australia’s employment report for September is coming out. The unemployment rate is forecast to have risen to 6.3% from 6.2%, while the net change in employment is expected to show an increase of 5k, much less than in August. This could prove AUD-negative somewhat.
• In the US, the headline and core CPI rates for September are coming out. The headline CPI is expected to have turned negative, while the core CPI is expected to have remained unchanged. Having in mind that on Thursday, the Fed minutes showed officials worried on low inflation, a dip into deflation will confirm their concerns and increase the possibilities that the committee will not raise rates this year.
• Finally on Friday, New Zealand’s CPI for Q3 is forecast to have slowed to +0.2% qoq from 0.4% qoq in Q2. This will bring the annual rate down to +0.3% yoy from +0.4% yoy. The inflation rate remains well below the 1%-3% target of the RBNZ and consequently, this increases the probabilities for the Bank to cut rates at its next meeting at the end of the month.
• In the US, industrial production is forecast to have risen a bit in September after falling in the previous month. The preliminary U of M consumer sentiment index for October is also coming out along with the surveys of 1-year and 5-to-10 year inflation expectations.
Currency Titles:
EUR/USD trades higher and hits resistance around 1.1390
GBP/USD finds support near 1.5300
USD/JPY in a consolidative mode
Gold advances towards 1165
Currencies Image Url:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October12/EURUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October12/GBPUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October12/USDJPY.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October12/XAUUSD.PNG
Currencies Text:
• EUR/USD traded higher on Friday but the advance was halted near our 1.1390 (R1) resistance zone. During the early European morning Monday, the bulls seem to go for another attempt to break that territory. A break above that level is needed for the pair to move towards our next resistance at 1.1450 (R2). Our short-term oscillators though, support a minor correction towards the 1.1320 (S1) support area before the next strong move higher. The RSI found resistance at its 70 line and declined a bit, while the MACD, although above its zero and trigger lines, show signs of topping. On the daily chart, as long as EUR/USD is trading between the 1.0800 key support and the psychological zone of 1.1500, I would hold a neutral stance as far as the overall picture is concerned. I would like to see another move above 1.1500 before assuming that the overall outlook is back positive. On the downside, a break below the 1.0800 hurdle is the move that could shift the picture negative.
• Support: 1.1320 (S1), 1.1265 (S2), 1.1230 (S3)
• Resistance: 1.1390 (R1), 1.1450 (R2), 1.1520 (R3)
• GBP/USD declined a bit on Friday after it found resistance near 1.5385 (R1). The fall was halted near the 1.5300 (S1) support area. A decisive break of that territory could push the rate lower, perhaps towards our next support of 1.3260 (S2). Our short-term momentum studies support the notion for further declines. The RSI found resistance at its 70 line and moved lower, while the MACD, crossed below its trigger line and points down. Also, negative divergence is detect between the RSI and the price action, which favor further declines. Plotting the daily chart, I see that Cable remains below the 80 day exponential moving average. However, given the recent advances and the several important economic indicators coming out from the UK this week, I would adopt a “wait and see” stance as far as the overall outlook of the pair is concerned.
• Support: 1.5300 (S1), 1.5260 (S2), 1.5170 (S3)
• Resistance: 1.5385 (R1), 1.5460 (R2), 1.5510 (R3)
• USD/JPY continued trading in a consolidative mode, gyrating around the psychological level of 120.00. The indecisive mood of investors is reflected in our short-term momentum signs as well. The RSI remains near its 50 line pointing sideways, while the MACD, lies marginally above zero and moves along its trigger line. As a result, I would still consider the short-term outlook to stay neutral. I will need to see a break either above 121.65 (R2) or below 119.20 (S2) for any hope of a nice move into the end of the week. A break below 119.20 (S2) is needed to turn the near-term picture back to the downside. Something like that could initially aim for the next support at 118.60 (S3). As for the broader trend, the plunge on the 24th of August signaled the completion of a possible double top formation, which turned the medium-term outlook somewhat negative. As a result I would treat the recovery from the 116.00 zone as a corrective phase and I believe that it is more likely for the pair to exit its short-term sideways range to the downside in the foreseeable future.
• Support: 119.70 (S1) 119.20 (S2), 118.60 (S3)
• Resistance: 120.55 (R1), 121.25 (R2), 121.75 (R3)
Benchmark Currency Rates:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October12/Benchmark.JPG
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IronFX Daily Commentary | 13/10/15
Language English
•China’s trade figures show weak demand all around China’s trade balance soared in September as both exports fell and imports fell sharply. Imports in particular were down 20.4% yoy, worse than the forecast of -16.0% yoy. Exports were down 3.7% yoy. The figures demonstrate how demand is softening all over the world: both domestic demand in China as construction and investment slow, and demand for China’s exports elsewhere in the world. The figures are bad news for Australia and New Zealand, which count China as their major export market. Aussie and kiwi plunged on the news giving back some of the last days gains. The sharp slide in imports however, helped for a near-record trade surplus in China ($60.24bn vs the record $60.62bn). The focus now turns on next Monday’s release of retail sales, industrial production and fixed asset investment and to a key meeting of Chinese Communist Party leaders’ end of the month, focusing on the next five-year plan. A lowering of the 7% yoy growth projection is a possibility, which could hurt the AUD and NZD.
• Overnight, from Japan, we got the minutes of Bank of Japan September policy meeting. These are not the minutes from the most recent meeting but rather from the previous one. The minutes revealed that many members shared the view that the underlying trend in inflation continue to improve. This is in line with the BoJ Governor Kuroda reluctance to take further actions at their next meeting end of this month. The focus is now about restructuring and corporate tax reform and less about using monetary policy to boost inflation expectations. USD/JPY continued to gyrate around the psychological 120.00 level. ( see more technical below)
• Today’s highlights: During the European day, the main event will be the German ZEW survey for October. The survey for September showed a mixed picture for Eurozone’s strongest economy. The expectations index declined once again from the previous month, while the current situation index increased moderately. This time, both indices are forecast to decline a bit, which could prove negative for EUR. The final German CPI data for September confirmed the preliminary reading and showed a fall of 0.2% yoy. The market reaction at this event was modest.
• In Sweden, CPI and CPIF for September are due to be released. The CPI is expected to remain flat, while the CPIF is expected to have risen by a percentage point. At its latest meeting, the RIksbank maintained its benchmark interest rate unchanged and the monthly pace of bond purchases intact. I believe that unless we see a fall into deflation, the Bank is unlikely to alter its stance and SEK could strengthen. However, given that the Bank remains willing to act even in between ordinary meeting, I would treat any short-term strength as a correction of the longer-term USD/SEK downtrend.
• In the UK, the spotlight will be on the CPI data for September. The headline figure is expected to have remained flat, while the core rate is expected to have risen a bit. Given that last Thursday, BoE officials were concerned that inflation is likely to rise slower than previously expected, a disappointing figure is likely to push further back expectations of a rate hike by the BoE, and put GBP under renewed selling pressure.
• In the US, the NFIB small business optimism index for September is due out. Even though this indicator is not a major market mover, it is worth watching because of the Fed’s emphasis on employment, as small businesses employ the majority of people in the US. Following the disappointing NFP figure in September, this indicator could attract more attention than usual.
• As for the speakers, ECB Executive Board member Yves Mersch, St. Louis Fed President James Bullard, BoE official Andrew Haldane and BoE MPC Ian McCafferty speak
Currency Titles:
EUR/USD in a sideways mode
GBP/USD finds support near 1.5300
USD/JPY gyrates around 120.00
Gold found resistance near 1165/70
Currencies Image Url:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October13/EURUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October13/GBPUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October13/USDJPY.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October13/XAUUSD.PNG
Currencies Text:
• EUR/USD traded in sideways mode on Monday, staying below our 1.1390 (R1) resistance line. The failure to break that territory despite the broad USD weakness, make me believe that the next move is likely to be lower, perhaps for a test of our 1.1320 (S1) support barrier. A break of that territory could trigger larger bearish extensions and aim for our next support at 1.1265 (S2). Our short-term momentum signs support this notion. The RSI found resistance at its 70 line and declined, while the MACD, has topped and crossed below its trigger line. As for the broader trend, as long as EUR/USD is trading between the 1.0800 key support and the psychological zone of 1.1500, I would hold a neutral stance as far as the overall picture is concerned. I would like to see another move above 1.1500 before assuming that the overall outlook is back positive. On the downside, a break below the 1.0800 hurdle is the move that could shift the picture negative.
• Support: 1.1320 (S1), 1.1265 (S2), 1.1230 (S3)
• Resistance: 1.1390 (R1), 1.1450 (R2), 1.1520 (R3)
• GBP/USD advanced a bit on Monday but failed to reach our 1.5385 (R1) resistance level and in succession, the rate dropped towards the 1.5300 (S1) support level. A decisive break of that territory could push the rate lower, perhaps towards our next support of 1.5260 (S2). The catalyst for such a break could be a disappointing UK CPI for September released later today. Our short-term momentum studies support the notion for further declines. The RSI found resistance at its trend line and moved lower, while the MACD, crossed below its trigger line and points down. These momentum signs favor further declines. On the daily chart, I see that Cable remains below the 80 day exponential moving average. However, given the recent advances and the several important economic indicators coming out from the UK this week, I would adopt a “wait and see” stance as far as the overall outlook of the pair is concerned.
• Support: 1.5300 (S1), 1.5260 (S2), 1.5170 (S3)
• Resistance: 1.5385 (R1), 1.5460 (R2), 1.5510 (R3)
·******** USD/JPYcontinued trading in a consolidative mode, gyrating around the psychological level of 120.00. The indecisive mood of investors is reflected in our short-term momentum signs as well. The RSI remains near its 50 line pointing sideways, while the MACD, lies marginally below zero and moves along its trigger line.As a result, I would still consider the short-term outlook to stay neutral.I will need to see a break either above 121.65 (R2) or below 119.20 (S2) for any hope of a nice move into the end of the week. A break below 119.20 (S2) is needed to turn the near-term picture back to the downside.Something like that could initially aim for the next support at 118.60 (S3). As for the broader trend, the plunge on the 24[SUP]th[/SUP] of August signaled the completion of a possible double top formation, which turned the medium-term outlook somewhat negative. As a result I would treat the recovery from the 116.00 zone as a corrective phase and I believe that it is more likely for the pair to exit its short-term sideways range to the downside in the foreseeable future. ·******** ·****** Support: 119.70 (S1) 119.20 (S2), 118.60 (S3) ·******** Resistance: 120.55 (R1), 121.25 (R2), 121.75 (R3)
·******** ·**** Gold failed to break our 1165/70 (R1) resistance zone, and fell sharply to find some buy orders slightly above the 1150 (S1) support. A break of that support area is needed to trust further declines, perhaps towards our next support at 1136 (S2). Our short-term momentum studies support the case for further declines. The RSI found resistance slightly below its 70 line and edged lower, while the MACD, although positive, has topped and fell below its signal line. As for the bigger picture, with no clear trending structure on the daily chart, I would hold my neutral stance as far as the overall outlook is concerned. ·******** ·**** Support: 1150 (S1), 1136 (S2), 1129 (S3) ·******** ·**** Resistance: 1165/70 (R1), 1175 (R2), 1185 (R3) *
Benchmark Currency Rates:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October13/Benchmark.JPG
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IronFX Daily Commentary | 14/10/2015
Language English
• China’s CPI slows more than expected. Consumer prices rose only 1.6% yoy in September, down from 2.0% yoy in August, while producer prices fell 5.9% yoy, at the same pace as in the prior month and in line with expectations. The fall in the PPI marked the 43rd consecutive month of price falls, indicating weakness in the export sector. The low level of inflation reflects manufacturing overcapacity meeting weak demand – not a good prospect for AUD and NZD. In other words, no signs of any change in the disinflation picture in China. The soft inflation print is reflective of China’s slowdown and could add to speculation for additional monetary policy easing from PBOC in the months ahead.
• As we mentioned yesterday, the focus now turns on next Monday’s release of retail sales, industrial production and fixed asset investment. In addition to these data, a key meeting of Chinese Communist Party leaders’ end of the month will take place, focusing on the next five-year plan. A lowering of the 7% yoy growth projection is a possibility, which could raise the prospects of a Chinese fiscal package. This has the potential to trigger an AUD and NZD short covering rally, but until then, the weak Chinese data may continue to weigh on those high yielding currencies.
• The soft inflation figure, coming a day after data showed Chinese imports fell 20% in September, suggested the economic picture in China is still cloudy. The greenback stayed near a 3 1/2-week low against a basket of currencies as further signs of weakness in China fanned expectations that the Fed will have to wait longer before any policy tightening.
• Today’s highlights:During the European day, Eurozone’s industrial production for August is forecast to have fallen. Even though this is not a major market mover, the figure will raise concerns that the bloc’s recovery is losing momentum and could weaken EUR a bit.
• The highlight of the day will be the UK employment report for August. The forecast is for the unemployment rate to have remained unchanged at 5.5%, while average weekly earnings are expected to have accelerated to 3.0% yoy from 2.9% yoy. Further improvement in the UK job market is likely to support the pound, which could erase some of its Tuesday’s losses following the disappointing CPI data.
• In the US, both the headline and core (excluding autos and gasoline) retail sales for September are expected to have risen at the same pace as in August. The US PPI for September is also coming out. The headline rate is forecast to have remained unchanged, while the core PPI, excluding food and energy is expected to have accelerated. These data increase the likelihood of a positive surprise in the CPI coming out on Thursday. The headline CPI rate is currently at +0.2% yoy and a possible positive PPI could keep CPI above zero. Fed releases the Beige Book before its October 27-28 policy meeting.
• As for the speakers Norges Bank Governor Oeystein Olsen speaks.
Currency Titles:
EUR/USD still below 1.1400
GBP/USD plunged breaking two support lines in a row
USD/JPY just below 120.00
DAX futures fell below 10000
Currencies Image Url:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October14/EURUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October14/GBPUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October14/USDJPY.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October14/DAX futures.PNG
Currencies Text:
·******** EUR/USDmade several attempts to rally but none of them found much support and the pair is now back below 1.1400 (R1). The failure to break that area, make me believe that the next move is likely to be lower, perhaps for a test of our 1.1320 (S1) support barrier. A break of that territory could trigger larger bearish extensions and aim for our next support at 1.1265 (S2). Our short-term momentum signs support this notion. The RSI found resistance at its 70 line and declined, while the MACD, has topped and crossed below its trigger line.* As for the broader trend, as long as EUR/USD is trading between the 1.0800 key support and the psychological zone of 1.1500, I would hold a neutral stance as far as the overall picture is concerned. I would like to see another move above 1.1500 before assuming that the overall outlook is back positive. On the downside, a break below the 1.0800 hurdle is the move that could shift the picture negative. ·******** Support: 1.1320 (S1), 1.1265 (S2), 1.1230 (S3)·******** Resistance: 1.1400 (R1), 1.1450 (R2), 1.1520 (R3)
·********GBP/USDplunged on Tuesday following the UK CPI data and broke two support lines in a row.Afterwards, the rate found some buy orders at 1.5200 (S2) support level and bounced up again. During the early European hours Wednesday, the pair is headed towards our 1.5300 (R1) resistance zone. A break of that level could open the way for another test of the 1.5385 (R2) resistance hurdle. The catalyst for such a move could be a strong UK employment report released later today. Our short-term momentum studies support the notion for a positive upward move. The RSI found support at its 30 line and bounced up, while the MACD, although stands below its zero and trigger lines, show signs of bottoming and could race higher. On the daily chart, given the several important economic indicators coming out from the UK this week, I would adopt a “wait and see” stance as far as the overall outlook of the pair is concerned.·********Support: 1.5245 (S1), 1.5200 (S2), 1.5170 (S3)·************** ·*******Resistance: 1.5300 (R1) 1.5385 (R2), 1.5460 (R3)
·******** USD/JPYdeclined slightly on Tuesday but stayed close to the psychological level of 120.00. The indecisive mood of investors is reflected on the chart, with no clear trending structure on the 4-hour chart.As a result, I would still consider the short-term outlook to stay neutral.I will need to see a break either above 121.65 (R2) or below 119.20 (S2) for any hope of a nice move into the end of the week. A break below 119.20 (S2) is needed to turn the near-term picture back to the downside.Something like that could initially aim our next support at 118.60 (S3). As for the broader trend, the plunge on the 24[SUP]th[/SUP] of August signaled the completion of a possible double top formation, which turned the medium-term outlook somewhat negative. As a result I would treat the recovery from the 116.00 zone as a corrective phase and I believe that it is more likely for the pair to exit its short-term sideways range to the downside in the foreseeable future.·****************** ·******* Support: 119.50 (S1) 119.20 (S2), 118.60 (S3)·******** Resistance: 120.55 (R1), 121.65 (R2), 121.75 (R3)
·******** DAX futures traded lower on Tuesday after finding resistance near our 10150 (R1) resistance barrier. The decline was halted around our 9935 (S1) support zone. A decisive break of that level is needed to set the stage for extensions towards our next support at 9780 (S2). Our momentum studies reveal downside speed and magnify the case for further declines. The RSI fell below its 50 line and points down, while the MACD, although in its positive territory, has topped and fallen below its trigger line. On the daily chart, the break below 10670 on the 20th of August has shifted the medium-term outlook to the downside, in my view. However, given that the index has printed two lows at around 9315, I would change my stance to neutral for now, as far as the overall picture is concerned. ·******** Support: 9935 (S1), 9780 (S2), 9670 (S3)·******** Resistance: 10150 (R1) 10325 (R2), 10525 (R3)*
Benchmark Currency Rates:
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IronFX Daily Commentary | 15/10/2015
Language English
• Dollar struggles as weak US data scale back rate hike expectations US retail sales for September disappointed, while PPI fell at an accelerating pace, raising doubts about whether the Fed will raise interest rates this year. Retail sales edged up only 0.1% mom, falling short of expectations for a 0.2% mom rise. On top of that, August’s figure was revised down to 0.0% mom from +0.2% mom previously. As for the producer prices, they recorded their biggest decline in eight months. The weak reports on Wednesday were the latest suggestion that the US economy is losing momentum in the face of slowing global growth. Investors will focus today on the US headline and core CPI rates for September. These figures are going to get more attention than usual from investors, as it could help them to re-price rate hike expectations.
• Also on Wednesday, the Fed's Beige Book showed the US economy grew at a modest pace, scaling further back expectations of Fed hike this year. Two weeks before the October FOMC meeting, the Beige Book indicated some slowdown in the economy, while the strong dollar, restrained activity in the manufacturing, tourism and energy sectors.
• Fading expectations of a rate hike pushed the dollar to around a seven-week lows against a basket of currencies. The big question that we face now, is whether the dollar weakness is just a corrective phase or a trend reversal. Will the weakness in dollar persist or will it resume its bullish trend? I believe that this highly depend on Fed officials’ commentary in the following days. Already several officials downplayed the weak employment report recently, and maintained their stance that they are still on track to hike this year. As a result, if Fed officials reiterate that they still could raise rates this year despite the recent disappointing data, USD is likely to regain its lost glamour. On the other hand, any remarks that suggest a change in their stance, could put USD under renewed selling pressure across the board, in my view.
• Today’s highlights: During the European day, Sweden’s official unemployment rate for September is coming out. The PES unemployment rate declined on Monday, which increases the likelihood that the official rate could decline as well.
• In the US, the highlight will be the headline and core CPI rates for September. The headline CPI is expected to have turned negative, while the core CPI is expected to have remained unchanged. Having in mind that on Thursday, the Fed minutes showed officials worried on low inflation, a dip into deflation will confirm their concerns and increase the possibilities that the committee will not raise interest rates this year. The Empire State manufacturing index is expected to show that business conditions for NY manufacturers have deteriorated in October. Initial jobless claims for the week ended Oct. 10 and the Philadelphia Fed Business activity index for October are also coming out.
• We have several speakers on Thursday’s agenda:, ECB Governing Council member Ewald Nowotny, Norges Bank Governor Oeystein Olsen, St. Louis President James Bullard, New York Fed President William Dudley and Cleveland Fed President Loretta Mester speak.
Currency Titles:
EUR/USD broke above 1.1450
GBP/USD surged following the overall strong UK job report
USD/JPY fell below 119.20
Gold broke above the key level of 1175
Currencies Image Url:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October15/EURUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October15/GBPUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October15/USDJPY.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October15/XAUUSD.PNG
Currencies Text:
• EUR/USD rallied on Wednesday and broke above our resistance-turned-into-support barrier of 1.1450 (S1). The break above that territory could trigger larger bullish extensions and aim our resistance at 1.1520 (R1). As we have mentioned several times in previous reports, the break above the psychological 1.1500 is likely to shift the overall outlook back to positive. Therefore, I would prefer to see a decisive break above 1.1520 (R2) to get confident for further advances. Our short-term momentum signs support the case for further advances. The RSI lies above its 70 line pointing up, while the MACD, already in its positive territory has just crossed above its trigger line. These momentum signs detect accelerating momentum. As for the broader trend, since the pair is trading just below the psychological 1.1500 zone, I would prefer to wait for a clear break above that area to shift my overall view to the upside.
• Support: 1.1450 (S1), 1.1380 (S2), 1.1350 (S3)
• Resistance: 1.1520 (R1), 1.1580 (R2), 1.1620 (R3)
• GBP/USD surged on Wednesday following the overall strong UK job report to find resistance fractionally below the round figure of 1.5500 (R1) and the black downtrend line taken from the highs of 25th of August. A break of these obstacles is needed to trigger further advances and perhaps challenge our next resistance level at 1.5540 (R2). Looking at our short-term momentum studies however, a minor pullback before the next leg higher cannot be ruled out. The RSI found resistance at its 70 line and points sideways, while the MACD, although it moved sharply into its positive territory, show signs of topping. Therefore, we could see a pullback towards our 1.5420 (S2) support level before the bulls take control again. On the daily chart, given that Cable moved above its 80-day exponential moving average, I would maintain my neutral stance as far as the overall outlook of the pair is concerned.
• Support: 1.5460 (S1), 1.5420 (S2), 1.5385 (S3)
• Resistance: 1.5500 (R1) 1.5540 (R2), 1.5570 (R3)
• USD/JPY declined on Wednesday and fell below the key support-turned-into-resistance level of 119.20 (R1). The fall was halted at our support of 118.60 (S1). A break below that area is likely to trigger larger bearish extensions and perhaps target our next support at 117.50 (S2). Looking at our short-term momentum studies however, we could see a minor upside correction before the bears prevail again. The RSI found support slightly below its 30 line and bounced up, while the MACD, although below its zero and trigger lines, show signs of bottoming. These signs support the case for a minor upward correction. As for the broader trend, the plunge on the 24th of August signaled the completion of a possible double top formation, which turned the medium-term outlook somewhat negative. As a result I would treat the recovery from the 116.00 zone as a corrective phase and I believe that it is more likely for the pair to exit its short-term sideways range to the downside in the foreseeable future.
• Support: 118.60 (S1) 117.50 (S2), 116.10 (S3)
• Resistance: 119.20 (R1), 119.50 (R2), 120.50 (R3)
• Gold advanced on Wednesday breaking above the key resistance (now turned into support) level of 1175 (S1). The advance was halted near our next resistance zone at 1185 (R2). A decisive break of that level is needed to set the stage for extensions towards the psychological figure of 1200 (R2). However, I detect negative divergence between the RSI and the price action, which suggests that the upside speed is losing some of its momentum and a pullback could be looming. The RSI found resistance at its 70 line and moves along with it, while the MACD, although above its trigger line, show signs of topping. Therefore, we could see a test of the 1175 (S1) level before the next leg higher.
• Support: 1175 (S1), 1165 (S2), 1152 (S3)
• Resistance: 1185 (R1) 1200 (R2), 1204 (R3)
Benchmark Currency Rates:
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Market Summary Url:
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IronFX Daily Commentary | 16/10/2015
Language English
• Dollar gained on US inflation data. The dollar gained thanks to better-than-expected US inflation data released on Thursday. The upbeat inflation data along with an unexpected decline in initial jobless claims, gave the greenback some support. The rebound of DXY index from its lowest level since August, was also supported by ECB Nowotny’s comments for further easing by the ECB. If other ECB officials hint the need for additional stimulus ahead of the next week’s policy meeting, EUR/USD could head lower.
• Overnight, New Zealand’s inflation cooled in Q3, but less than market expectations. The CPI rose 0.3% qoq from 0.4% qoq in Q2, above consensus of 0.2% qoq. Even though inflation remained well below the bottom of the 1%-3% target, it scaled back expectations of a rate cut by the RBNZ from October to December. NZD/USD bounced up on the news, but gave back all the gains immediately.
• Elsewhere, the Reserve Bank of Australia released its semi-annual Financial Stability Review. The two main points from the report was the deteriorating growth outlook for China and other EM economies, and the higher risks to the country’s financial stability that continue to revolve around property markets. The Australian dollar lost some of its recent gains against the dollar, but stayed above the 0.7250 support barrier. A break below that level is needed to set the stage for further bearish extensions.
• Today’s highlights: During the European day, Eurozone’s final CPI for September is coming out. As usual, the final figure is expected to confirm the preliminary reading. Thus the market reaction is usually limited at the release, unless if we have a huge revision.
• From Canada, manufacturing sales for August are forecast fall, a turnaround from the previous month. This could prove CAD-negative.
• In the US, industrial production is forecast to have fallen at a slower pace in September from the previous month. The preliminary U of M consumer sentiment index for October is also coming out along with the surveys of 1-year and 5-to-10 year inflation expectations. The Job Opening and Labor Turnover Survey (JOLTS) report for August is due out and the forecast is for a moderate decrease in the number of job openings. This survey will also bring the “quit rate,” a closely watched indicator of how strong the job market is.
• As for the speakers, Bank of Japan Governor Haruhiko Kuroda, Bank of England MPC member Kristin Forbes and ECB Executive Board member Benoit Coeure speak. ECB’s Coeure is likely to get more attention than usual, for any hint if he shares the same view with ECB’s Nowotny for further easing by the ECB.
Currency Titles:
EUR/USD fell after hitting marginally below 1.1500
GBP/USD just below 1.5500
EUR/GBP traded lower
DAX futures back above 10000
Currencies Image Url:
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http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October16/GBPUSD.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October16/EURGBP.PNG
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October16/DAX futures.PNG
Currencies Text:
• EUR/USD fell on Thursday after finding some sell orders slightly below the psychological 1.1500 (R3) resistance area. The decline was halted above our 1.1340 (S1) support line. A break below that zone could set the stage for further declines and perhaps challenge our next support at 1.1270 (S2). Our short-term momentum signs support the notion. The RSI fell below its 50 line and is pointing down, while the MACD, crossed below its trigger line is also pointing south. As for the broader trend, since the pair failed to break the psychological 1.1500 (R3) zone and is now trading back below it, I would prefer to maintain my neutral stance and wait for a clear break of that obstacle to shift my overall view to the upside.
• Support: 1.1340 (S1), 1.1270 (S2), 1.1175 (S3)
• Resistance: 1.1400 (R1), 1.1450 (R2), 1.1500 (R3)
• GBP/USD made few attempts to break above the crossroad of our 1.5500 (R1) resistance line and the black downtrend line taken from the highs of 25th of August, but none of them found much support and the pair is now back above 1.5460 (S1) support zone. I would need to see a break either above 1.5500 (R1) or below 1.5420 (S2) for any hope of a nice move into the end of the day and week. The indecisive mood of investors is reflected in our short-term momentum studies as well. The RSI lies below its 70 line pointing sideways, while the MACD, although in its positive territory moves along its trigger line also pointing sideways. On the daily chart, given that Cable moved above its 80-day exponential moving average but still stands below the black downtrend line, I would maintain my neutral stance as far as the overall outlook of the pair is concerned.
• Support: 1.5460 (S1), 1.5420 (S2), 1.5385 (S3)
• Resistance: 1.5500 (R1) 1.5540 (R2), 1.5570 (R3)
• EUR/GBP traded lower during the European morning Thursday, after it found resistance near 0.7420 (R2). The rate fell to break below our support (now turned into resistance) area of 0.7375 (R1) and the black uptrend line taken from the lows of 5th of August. The decline was halted above our 0.7335 (S1) support zone at the 200-period moving average, which seems to provide a good support to the lows of the price action. I would need to see a break below the aforementioned moving average to trust further declines. Looking at our short-term momentum signs however, a minor upward move could be looming, perhaps for a test of the 0.7375 (R1) resistance area. Our short-term momentum studies support the case for a minor advance. The RSI found support at its 30 line and bounced up, while the MACD, already below its zero and trigger lines, show signs of bottoming. In the bigger picture, for the broader trend, the move above 0.7170 on the 21st of August has turned the medium-term outlook positive. However, a close above the psychological 0.7500 level is needed to signal larger bullish extensions, in my view.
• Support: 0.7335 (S1), 0.7300 (S2), 0.7250 (S3)
• Resistance: 0.7375 (R1), 0.7420 (R2), 0.7465 (R3)
• DAX futures traded higher on Thursday after finding support near our 9935 (S1) level. The advance was halted around our 10150 (R1) resistance zone. A decisive break above that obstacle is need to set the stage for extensions towards our next resistance at 10325 (R2). Our momentum studies reveal upside speed and support the case for further advances. The RSI moved above its 50 line and is pointing somewhat up, while the MACD, crossed above its trigger line and could poke its nose above zero. On the daily chart, the break below 10670 on the 20th of August has shifted the medium-term outlook to the downside, in my view. However, given that the index has printed two lows at around 9315, I would change my stance to neutral for now, as far as the overall picture is concerned.
• Support: 9935 (S1), 9780 (S2), 9670 (S3)
• Resistance: 10150 (R1) 10325 (R2), 10525 (R3)
Benchmark Currency Rates:
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Market Summary Url:
http://shared.ironfx.com/Morning_Pictures_2015/October_2015/October16/Table.JPG
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