Technical and Market Analysis by Vistabrokers - page 14
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Vista Brokers: AussieRemains withinNarrowPriceRange
On Wednesday, the Australian dollar was trading at 0.7823 against the US dollar compared to 0.7799 on Tuesday evening. As Vista Brokers analysts say, the AUD/USD “swing” within a narrow price range continues.
Recently, an economic activity in Australia shows clear signs of slowing down. So, at the end of last week the disappointing data on unemployment was published, which in January rose by 0.3% immediately. The number of employed in the first month of the year decreased by 12.2 thousand, which is also much worse than expected. On the eve Greg Gibbs, a currency RBS strategist in Singapore noted that the rating of Australia may be revised and given the growing economic instability, the country can hardly expect to maintain AAA rating.
Australia's central bank insists that the low rate of the Australian dollar is useful for the economy.
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GOLD.LevelTest
We continue to pay attention to the current situation in gold again and again. At this stage, the minimum program is executed – the reducing target is achieved (1197.25). It is a support line connecting a number of local minimums, marked during the previous few months. As a result, we can contemplate a fairly powerful rebound and, quite possibly, this is where the bulls can start a counteroffensive. However, in order to consider the possibility of buying, the price is to demonstrate the seriousness of intentions.
So, it is not recommended to take active steps at this stage. At the same time, it is worth considering the possibility of sales in case of a break below 1197.25 in order to achieve the yearly minimum - 1167 dollars. Purchases will be possible only in the case of relevant prerequisites appearance in the form of line of resistance breakthrough and the subsequent formation of growth signs in the form of gradually higher lows and highs.
EUR / USD.Market'sAttention isDirected to ECB "Minutes" andProud Greeks
After reaching eleven-year lows (1.1096) in January market players seem to have left the EUR / USD at rest, and some positions were closed. This led to a short time growth of the quotes, and a peak of buyers' activity was at 1.1532 . Now the pair has found a balance, moving in a narrow trading range. The nearest significant support is 1.1270, resistance - 1.1535. Fundamentally, the market continues to be uncertainty regarding the extension of funding Greece. Its representatives are still unable to find a compromise with the international lenders. Nevertheless, some progress is seen, because there is already a formal request to Brussels to extend the current program for 4-6 months (the period which is needed to develop a new program). We also can not forget about the possible impact of the minutes of the last ECB meeting publication (12.30 GMT), where the discussion of adopted at the January meeting quantitative easing program (60 billion euros per month) will be described in detail.
Thus, aforesaid levels of support (1.1270) and resistance (1.1535) remain delimiters between bulls and bears, and there is something like a buffer zone between them, which means that the recommendation to work on this range exit. As a possible target in the event of rising scenario, we name 1.1655 (38.2% correction from the reduction in December 2014 - January 2015), and then - 1.1800, where is the correction of 50%, and 161.8% extension of the upward momentum in late January - early February. Breakdown of support will lead to January lows testing (1.1096).
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Market Pulse 19.02
After an intensive Wednesday, on Thursday the economic calendar looks quite empty, but during the US trading session we expect some several important publications. In particular, the weekly data on unemployment claims in the US will be released, as well as the Philly Fedmanufacturingindex.
9:00 ** ECB Monetary Policy Meeting Accounts - January (euro zone)
Moderate impact on the market (EUR). The report may contain some hints on future ECB's strategy, so the market pays attention to it.
11:00 ** CBI Industrial Order - February (UK)
Moderate impact on the market (GPB). The index of industrial orders from the British Confederation of Industrialists is a leading indicator of economic health. Its growth is favorable for the currency, and in February, analysts expect positive values.
13:30 *** Unemployment Claims - February (USA)
13:30 ** Continuing Claims - February (USA)
Strong impact on the market (USD). In recent years, this indicator has gained great influence, as it is one of the benchmarks for the monetary policy of the Fed. Analysts expect moderate values for the reporting week, however, the statistics may surprise us.
15:00 ** Flash Consumer Confidence - February (euro zone)
Moderate impact on the market (EUR). The indicator is still at a low level, but in February a slight increase is expected, which may have a positive impact on the single currency.
15:00 *** Philly Fed Manufacturing Index - February (USA)
Strong impact on the market (USD). The index is based on a survey of manufacturing companies in the region. Values greater than zero reflect an improvement in business conditions and the forecast for February is very positive, so that the publication could support the dollar.
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Vista Brokers:WeakUS Statistics did notPrevent Euro from Falling
On Friday a new round of Greece talks with international lenders will be held, and until these negotiations end, the EUR/USD will remain volatile. Vista Brokers analysts say that amid pessimistic expectations of investors on Wednesday, the euro was down, despite the fact that in the US a series of weak statistics was published.
Thus, the volume of building permits in January fell by 0.7% (forecast + 1%), and the number of housing starts – by 2% (forecast -1.7%). The producer price index fell twice stronger than analysts had expected, and the same index, but excluding prices for food and energy showed a drop of 0.1% instead of growth by the same amount. Weaker than expected also was the data on changes in the volume of industrial production and capacity utilization.
However, the single currency remained under pressure looking forward for the decision of the "Greek problem". Recall that on Friday is the deadline for filing an application for an extension of Greece existing international bailout, which will be completed at the end of the month. Analysts say that perhaps Athens will ask about the short-term extension of the program today. Such an action would help the government to buy time for new negotiations that will eventually lead to the cancellation of austerity measures, as Greece hopes.
Earlier, lenders have rejected proposals by the Greek authorities, but everyone understands that time is running out, and therefore, it is likely that a compromise will still be found in the near future.
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Vista Brokers:FedMinutes did notMeetMarketExpectations
On Wednesday evening, the US dollar fell against its major counterparts after the publication of the Federal Committee on Open Market (FOMC) meetings minutes. Vista Brokers analysts point out that market participants expected a "hard" tone, but these expectations were not fulfilled.
In the minutes of the meeting on January 27-28 was marked that some FOMC members had expressed confidence that a premature rise in interest rates could hurt the economy. It was also noted that the decline in rates of other world central banks contain certain risks for the US economy.
After the minutes release, the dollar index fell from 94.09 to 94.45. The EUR / USD rose from 1.1340 to 1.1400, and the USD / JPY fell from 119.25 to 118.70. Now investors are skeptical that the Fed will raise rates in the middle of the year, as they have expected earlier.
Recall that when the January meeting was held, and the accompanying statement of FOMC was published, it contained clearly "hawkish" hints that the market took as a signal of imminent rate increase. Then the dollar received strong support. Given that other central banks are now massively reducing rates, the Fed looked at this background as a bulwark of stability.
However, analysts believe that the long-term trend of the US dollar growth remains relevant. Perhaps the Fed is preparing to raise rates, but not as fast as it was expected by market participants. Or the regulator will "drag its feet" longer to prepare the market and do not cause a shock, suddenly raising rates.
Experts also note that the dollar's decline after the publication of minutes was a correction caused by the closure of long positions.
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Vista Brokers: Inflation in FranceFell more thanExpected
On Thursday, the released French data on the consumer price index for January showed a stronger than expected decline. Vista Brokers analysts say that inflation in one of the largest euro zone economies has returned to a minimum of 2009 when the country had just came out of a recession.
So, in January, the consumer price index in France was down by 1% vs. 0.9% in monthly terms. The annual rate fell by 0.4% against the expected 0.3%.
This week inflation data has also came in Greece, which is now in the focus of the market. The fall of the consumer price index in January was 2.8% versus 2.4%. Also on Friday statistics in Italy will be published. Analysts expect lower inflation by 0.4% mom and by 0.6% in annual terms.
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GBP / USDNeeds a Fuel to Move Further
The British currency is still feeling confident enough versus the US dollar - quotes are within the short-term but quite clear upward price channel. An important role in the development of this movement has played a publication of the last BOE meeting minutes on Wednesday. It became apparent that two members of the Monetary Policy Committee saw a reason for the rate hike from current levels (0.5%) this year. Also good data on the labor market has supported the pound. Thus, the unemployment rate fell and wages rose more than expected. We note that the factor of low wages previously was decisive for the Old Lady in its long periods of inactivity in the context of monetary tightening. In turn, the growth is limited by resistance levels: 61.8% Fibonacci correction of the decline in December 2014 - January 2015, as well as the expansion of 261.8% of the upward impulse that took place in mid-February.
It is recommended to work in a northerly direction, but we should wait for today's publication of retail sales data. It is likely that this data will cause a deeper correction to the area of the support line, which can be used to build up long positions. The enter on a breakthrough of the current local maximum at 1.5480 is also possible.
USD / JPY.Oriental Calm
As we have noted earlier, a situation with the pair is now more complicated due to some representatives of the Bank of Japan. Recall that once quotes have overcome strategically important resistance level (upper limit of the graphic figure "triangle"), in the news appeared comments of BOJ members with respect to the undesirability of further national currency reduce, as well as reflections on the possible negative impact of additional stimulation measures on consumer sentiment. Thus, some market players went out "to clarify" that led to the formation of a new consolidation figure having its own potential.
This figure can be realized in the next few hours and the exit direction is likely to provide the dominant trend in the near future. To confirm it is desirable to consolidate above / below the next resistance (119.40) or support (118.42) levels. We also can not ignore the formed upward price channel, boundaries of which can be boundaries of subsequent market movements.
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Vista Brokers: GreeceReachedTurningPoint
On Thursday, Greece finally took a step, which financial market participants had looked forward to. The country filed a request to extend a loan agreement, which ends on February 28, for another six months. However, Vista Brokers analysts say that investors doubt that international creditors will agree to the terms that Athens offers.
Recall that representatives of the Eurogroup, the ECB and the IMF together previously insisted that the only option for Greece is to agree to an extension of the existing conditions of its international bailout. Athens wants to gain time to review credit conditions. Germany is particularly active opposed to it. Amid the German criticism of the Greek proposal euro on Thursday was traded under the pressure most of the day.
Today, euro zone finance ministers will meet in Brussels to consider the "Greek problem" again. If Greece will be without the financial support of the EU on March 1, it can cause panic in the market and initiate a chain of events that will lead Greece out of the euro zone.
Of course, the hope for a compromise still exists. Even the German Finance Minister Wolfgang Schaeuble, who has picked to pieces all proposals to restructure the debt of Greece, still claims that there is a space for maneuver, but it is limited. He also noted that the Eurogroup should not forget its main responsibility - to maintain the stability of the eurozone.
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VistaBrokers:PoundRoseSignificantly in February
A second month of 2015 was quite successful for the pound. The British currency has risen against the dollar by 2.5%, and this makes it one of the strongest currencies in February among the major ones traded on Forex.
Among main fundamental factors of support for the pound VistaBrokers analysts name the fact that the Bank of England this month has kept its monetary policy unchanged and has not given the market any hint of softening. Investors were worried that the BOE follows the ECB and some other European central banks that have taken additional measures to stimulate their economies. However, the "Old Lady" did not give any signals for it keeping a neutral tone and even expressing some optimism about the economic situation in the country.
With optimism the market also took a traditional BOE Inflation Report. In it regulator has suggested that inflation in the UK will fall to zero soon, but there are no long-term deflationary risks, and the central bank intends to achieve the inflation target of 2% in two years. Amid this the British pound rose significantly against major competitors.
Despite the positive picture that loomed in February, the trend may soon turn because of political disturbance in the UK. In May, elections will be held in the country and, according to preliminary surveys, a good chance of winning has anti-European UK Independence Party (UKIP).
The position of the British Conservative Party is still quite strong, but it is unlikely that it will be able to form a majority in parliament, and in this case, political analysts suggest the following scenario. Conservatives will have to form a coalition with the ultra-UKIP and for this to make certain concessions, and the radicals may require early referendum on the UK's membership in the European Union.
In this case, the pound might appear in a situation similar to one in which the euro is now. Uncertainty about Greece and its possible exit from the euro zone has a lot of pressure on the currency. The referendum in the UK and its possible consequences may become a factor of pressure on the pound too.
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Market Pulse 20.02
On Friday, the economic calendar is full of important statistics. In the euro zone countries and the USA indexes of business activity will be published. In the UK and Canada the information on retail sales will be released. Recall that markets are waiting for the decision on Greece, so part of the statistics may be overlooked.
8:00 *** Flash Manufacturing PMI - February (France)
8:00 ** Flash Services PMI - February (France)
8:00 ** Flash PMI Composite - February (France)
8:30 *** Flash Manufacturing PMI - February (Germany)
8:30 ** Flash Services PMI - February (Germany)
8:30 ** Flash PMI Composite - February (Germany)
9:00 ** Flash Manufacturing PMI - February (euro zone)
9:00 ** Flash Services PMI - February (euro zone)
9:00 ** Flash PMI Composite - February (euro zone)
Strong impact on the market (EUR). In general, analysts' expectations regarding indices of business activity in the euro zone and its largest economies are quite optimistic. Indices in France, Germany and the euro zone are expected to increase as compared with January.
9:30 *** Retail Sales With Auto Fuel - January (UK)
9:30 ** Retail Sales Ex Auto Fuel - January (UK)
Strong impact on the market (GPB). The rate growth or exceeding the forecast reflects higher consumer activity, thereby strengthening currency. An important indicator for the economy as a whole and for the dynamics of the pound in particular. In January, analysts expect a decline.
13:30 *** Retail Sales - December (Canada)
13:30 ***CoreRetail Sales - December (Canada)
Strong impact on the market (CAD). The rate growth or exceeding the forecast reflects higher consumer activity, thereby strengthening currency. An important indicator for the economy as a whole and for the dynamics of the Canadian dollar in particular. In January, analysts expect a decline.
14:45 ** Flash Manufacturing PMI - February (USA)
Moderate impact on the market (USD). The index of purchasing managers in the manufacturing from Markit Economics is at a high level, although it is worth noting that in February expect a slight decline.
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