Technical and Market Analysis by Vistabrokers - page 18
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GBP/USD.Atthe Crossroads Again
Despite the fact that there was no significant changes in the dynamics of the "cable" (in terms of the movement scale), we have a steady drift farther from overcoming support line of the last few weeks' trend. A level of support we have mentioned in one of previous reviews (1.5382) was also pushed through, and currently only one significant level is on bears' road - 1.5330. It should be noted that tomorrow will be a meeting of the Bank of England, that definitely keeps the tension of market players now (not allowing to take more decisive action), whereas immediately after the announcement of the results, we can count on more specific dynamics. We should also note the fact that the indicated level of support is strengthened by the Fibonacci correction level 38.2% of the above-mentioned pair growth in January and February of this year.
Overcoming and subsequent consolidation of quotes below 1.5330 would give rise to open short positions with the target of 1.5250 (50% correction) and then - 1.5180 (61.8%) of the ascending wave in January and February. In the case of rebound from current levels and return to boundaries of the abandoned channel, we can expect growth to the February maximum (1.5550).
EUR / USD. InvestorsWaitforExplanation...
In anticipation of tomorrow's ECB meeting market players try not to tempt fate, and quotes are near the lower boundary of two downstream channels that differ only with angle of inclination. Returning to the subject of the European Central Bank, it is worth noting that the market expects explanations on a number of points regarding the upcoming program of quantitative easing, which could seriously affect the single currency.
Thus, we recommend to wait for tomorrow's events and be ready to respond appropriately to changing market conditions after the new data. At the moment, the key support level is 1.1096 – the eleven-year minimum for EUR / USD, on top the growth is limited by 1.1270. In some degree the market can "swing" today due to the Services PMI publication.
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Vista Brokers: AussieDrops afterWeak GDPData
On Wednesday, the Australian dollar dropped after the release of Australia's GDP statistics for Q4 2104. Vista Brokers analysts note that the weak data made aussie fall to 0.7813 dollars compared with 0.7824 dollars late Tuesday.
Thus, it became known that the Australian economy in the 4th quarter increased by 0.5% qoq and 2.5% yoy against forecasts of 0.7% and 2.5%, respectively. As you can see, the data did not meet investors' expectations, and it is natural that they began to sell the currency of the Green continent.
Recall that the Australian dollar on Tuesday has received support after the announcement of the RBA decision, and has grown against the US dollar. The thing is that analysts expected the Reserve Bank to announce reduction of interest rates from the level of 2.25% to 2%, but this has not happened. The RBA accompanying statement also was rather neutral, without much pessimism, so aussie rose.
But, as it often happens in Forex, optimism was short term, and today, having received a reminder of the Australian economic problems (the GDP data) the Aussie fell again. Weak statistics has reminded the market that the Reserve Bank of Australia is set to easing of monetary policy, and if this has not happen yesterday, it is likely would happen at the next meeting. Westpac analysts expect a rate cut by 0.25% in April or May. ANZ economists are inclined to believe that it will happen at the May meeting.
The belief that the RBA will go with further rate cuts was strengthened by its member John Edwards comments. Today, he said that the GDP growth rate is significantly lower than those needed to effectively strike unemployment and to restore the labor market, they need the GDP growth of at least 3%. Therefore, Edwards considers further rate cuts necessary.
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Market Pulse 04.03
Wednesday is saturated, as the whole week is. Today Australia has already release data on changes in GDP for the 4th quarter, the Fed Chairman Janet Yellen has spoken in the USA. In many countries today PMI index will be published, this time for the services sector, as well as the PMI composite. The Bank of Canada today will announce its decision on interest rates, and in the US ADPnon-farmemploymentchange data will be released.
8:15 ** Services PMI - February (Spain)
8:15 ** PMI Composite - February (Spain)
8:45 ** Services PMI - February (Italy)
8:45 ** PMI Composite - February (Italy)
8:50 ** Services PMI - February (France)
8:50 ** PMI Composite - February (France)
8:55 ** Services PMI - February (Germany)
8:55 ** PMI Composite - February (Germany)
9:00 ** Services PMI - February (euro zone)
9:00 ** PMI Composite - February (euro zone)
Moderate impact on the market (EUR). Typically, the PMI composite index and Services PMI have less impact than the corresponding manufacturing index. Analysts expect that in the majority of countries of the euro zone indices will remain at levels of January, and only in Spain is expected a slight increase.
9:30 *** Services PMI - February (UK)
9:30 *** PMI Composite - February (UK)
Strong impact on the market (GPB). The UK purchasing managers' index in the service sector is considered important.Currently, the index is at a high level, and in February, experts also predict a rise.
13:15 *** ADP Non-Farm Employment Change - February (USA)
Strong impact on the market (USD). The indicator of employment in the private sector is the main reference to official statistics (non-farm payrolls) and often causes significant fluctuations in the market. Expectations regarding the index are optimistic, so that the US dollar could gain significant support.
15:00 ***BOCOvernight Rate- March (Canada)
15:00 *** BOC Rate Statement - March (Canada)
Strong impact on the market (CAD). Analysts do not expect the Bank of Canada will cut interest rates once again, but as the results of yesterday's meeting of the Reserve Bank of Australia have shown, the regulators are full of surprises. In any case, investors will pay much attention to the accompanying statement.
15:00 *** ISM Non-Manufacturing PMI - February (USA)
Strong impact on the market (USD). Analysts expect a slight decrease in the index for non-manufacturing sector, although the rate is still at a high level, so the market reaction may be ambiguous.
19:00 ** Beige Book - March (USA)
Moderate impact on the market (USD). The Overview of 12 US Federal Reserve banks on the state of the local economies may be interesting from the point of the current situation. Better-than-expected statements are able to support the dollar.
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Vista Brokers:EUR/USD Continues to “Swing”
On Tuesday, EUR / USD at first rose slightly amid the positive statistics from the euro zone, but then fell again. Vista Brokers analysts note that the pair is actively moving up and down in anticipation of the ECB meeting on Thursday.
The data on retail sales in Germany were much better than expected and the euro grew to the maximum of 1.1210. Thus, the retail trade in the euro zone's largest economy grew by 2.9% mom and 5.3% yoy (up to June 2010), against forecasts of 0.5% and 2.6% respectively. The sale of food, beverages and tobacco rose by 3.8%, while sales of non-food products increased by 6.3%.
As you can see, the difference between expected and actual data is significant, and it gave an upward impetus to the single currency. Much stronger than the forecast was also statistics on the unemployment change in Spain. The indicator has shown a 13.5 thousand decline of unemployed versus expected 10 thousand.
However, the euro could not held the growth too long, even with such a positive background. Pressure on the currency was put with expectations about the ECB meeting and comments that may sound at the traditional press conference. It is unlikely that they will be bullish for the euro, so that investors act out beforehand.
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GBP/USD.Is it aCorrectionofCorrection?
Yesterday, the US dollar buyers stepped up again, which resulted in the fall of the "cable" to the area of 50% correction (1.5250) after overcoming of the preceding Fibo level 38.2% (of the January-February growth in this year), as well as previously indicated support level 1.5330. The main reason could be the publication of the quite weak data on business activity in the services sector, however, apparently it was only an indirect factor, because purchases of the dollar yesterday prevailed in most areas. Today will be held the Bank of England meeting - a major factor that can cause strong fluctuations in the market, and this also should not be forgotten.
So, the next reducing target is 1.5180 (61.8%) from the abovementioned wave of growth. Will the achievement of the following target become the logical correction of the previous growth, which, in its turn, has become the first corrective wave of the second half of 2014 downtrend? The time will show us, but at this stage it is not necessary to persist in preferences, demonstrating a flexibility in tactical decisions.
EUR / USD.Is the Path TabooedorWhether we shouldWait aLittleLonger?
The last bastion of bulls we have mentioned in the previous review fall. It is the established in January level of support corresponding to the minimum value over the past 11 years (1.1096). Together with it was finally won a support corresponding to a Fibonacci correction 61.8% of the total growth in 2000-2008 and it is quite a big deal because there is no other reasons for buyers to catch current levels. Today is held the ECB meeting, where will be announced details of the, adopted at the January meeting program of quantitative easing (12.45 GMT). And then at13.30 GMT the European Central Bank President will give the traditional press conference, where market players can hear a lot of interesting. However, the nature of this reduction lets us think that "the ice was broken," and it has come to stay no matter what would officials tell today. The US economy is growing on all fronts, as statistics says (which this year will result in the rates hike), while the euro zone only makes its first steps in quantitative easing. This is a long-term factor to be reckoned with for a long time.
If you have no open short positions, it is recommended to wait for the completion of the Dreghi press conference before entering the market. A new downstream channel was formed, in which boundaries we must look for the entry point, working on a rebound from the trend line.
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Vista Brokers: EuroDropped LowerPriorto ECBMeeting
On Wednesday, the single currency continued to move in a downtrend, reaching new lows against the US dollar and other major currencies. Vista Brokers analysts say that it was mainly due to releases of Services PMI in some countries of the euro zone. In another situation, the response to such data would not be so stormy, but not before the ECB meeting, which, according to market expectations, will disclose some details of the ambitious program of quantitative easing realization.
Thus, in Spain the PMI index for the services sector in February went down from 56.7 to 56.2 against the expected growth to 56.9. In Italy, analysts had expected growth from 51.2 to 51.8, but the index dropped to 50. In France, the index remained at the level of January meeting with expectations. In Germany, analysts expect that the rate will remain unchanged, but it fell from 55.5 to 54.7. And finally, in the euro zone the index fell from 53.9 to 53.7.
While statistics was published in different countries, the EUR / USD continued to fall. Even retail sales data for the euro zone, which came much better than expected (1.1% vs. 0.2%) could not stop its decline as well as ADP non-farm employment change index, which came weaker than expected. Thus, ADP data showed that in February, the private sector added 212,000 new jobs, and the forecast was 220,000.
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Vista Brokers: EuroFreshes Lowsagainst otherCurrencies
During early Thursday trading the single currency was declining against all major competitors in anticipation of today's ECB meeting and the official start of the quantitative easing program in the euro zone. Vista Brokers analysts note that the euro has fallen against the dollar to the minimu, since September 2003.
Also the euro is losing ground against the British pound, Swiss franc, Japanese yen. EUR / JPY today is trading at 132.31 yen against 132.58 yen late Wednesday.
Recall that the European Central Bank is preparing to launch a large-scale program of quantitative easing, which involves the purchase of government bonds in the amount of 60 billion euros per month. Analysts expect that after today's meeting rates will remain the same: 0.05% for the key rate and 0.2% for the deposit rate. Such large-scale measures to stimulate the economy have a strong pressure on the euro.
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Market Pulse 05.03
On Thursday will be published a lot of important data that can significantly affect the dynamics of currency pairs. Australia has already released statistics on retail sales and the trade balance. Today, two major world central banks at once will announce their decisions on interest rates and comment on the economic situation in accompanying statements. The market will be waiting for this information.
12:00 *** Bank of England Interest Rate Decision - March (UK)
12:00 *** Asset Purchase Facility - March (UK)
12:00 *** MPC Rate Statement - March (UK)
Strong impact on the market (GPB). Although investors do not expect any surprises from the Bank of England, they will listen to its comments carefully. If the nature of statements is optimistic, investors will consider this as a signal that the bank could start to raise rates in the foreseeable future. If the comments seem too neutral or even pessimistic, the reaction can be quite the opposite.
12:45 *** ECB Interest Rate Decision - March (euro zone)
12:45 ** Deposit Facility Rate-(euro zone)
12:45 ** Marginal lending facility - March (euro zone)
13:30 *** ECB Press Conference - March (euro zone)
Strong impact on the market (EUR). At the ECB meeting some interesting details can be sounded regarding to the start of the asset repurchase program which is the part of the program of quantitative easing later this month. So that its results can significantly affect dynamics of the pair.
13:30 *** Unemployment Claims - February (USA)
13:30 ** Continuing Claims - February (USA)
13:30 ** Revised Nonfarm Productivity - Q4 (USA)
Strong impact on the market (USD). Analysts expect that the number of unemployment claims during the reporting week has grown a little more than a week earlier, and the level of labor productivity in the 4th quarter has increased.
15:00 *** Ivey PMI - February (Canada)
Strong impact on the market (CAD). The index is based on a survey of purchasing managers. It shows an improvement or deterioration in comparison with the previous month. Growth rate or exceeded the forecast is favorable for the currency.
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AUD / USD.Will the Correction Begin?
In anticipation of the US employment data release quotes of the pair are frozen near a line of a medium-term trend. Meanwhile the latest wave of reduction has already been corrected to 38.2% Fibonacci, which gives us formal grounds to enter a short position if getting additional signals. At the same time, a breakthrough of the resistance line is also not excluded, because at the beginning of February the long-term trend line of the channel was tested, which in any case should not be ignored. Thus, it is dangerous for the deposit to take decisive actions directly before the main event of the month.
It is recommended to closely monitor the pair dynamics, keeping the willingness to buy on the resistance level 0.7910 break. Bears are limited with the mark 0.7624. Within this range boundaries we do not recommend to act decisively.
EUR / USDis Looking forSupport anddoes not Findit
Yesterday's meeting of the ECB is now a history. The market got specifics regarding the asset repurchase program, which is a part of the quantitative easing, start on March 9 (as it became known). Thus, the ECB will buy securities even with a negative yield. The central bank seems to by very optimistic regarding prospects for economic recovery in the region due to low oil prices, as well as considerably reduce of the single currency in the foreign market. Amid this quotes have made several strong movements, close to the upper boundary of the formed channel, but only to give bears a point for new sales. We have the new eleven-year minimum, as well as all the prerequisites for further reduce. The downward movement can get e renewed momentum from today's publication of the US labor market data.
It is recommended to hold short positions, refilling them in the case of the pair rebound from the trend line in order to achieve the opposite channel border. More conservative tactics is to wait for today's statistics from the US Department of Labor and then enter at the break of yesterday's low (1.0986).
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Vista Brokers: EuroMoves Closer to Parity with Dollar
On Thursday, the single currency has decreased during the trading day first on expectations of the ECB meeting and Mario Draghi press conference, and then on the information that the European Central Bank has given to the market. Vista Brokers analysts say that the euro against the dollar has freshed the 11-year low, reaching the level of 1.100. Thus, the euro zone currency is getting closer to parity with the US dollar, which many experts predict.
So, yesterday the ECB held its first meeting since the launch of quantitative easing program was announced. Rates remained unchanged as it was expected, and the central bank revealed some details about asset purchases. The program starts on March 9. In the accompanying statement, the regulator noted that the purchase will be carried out gradually and on a wide range of assets.
At the press conference Draghi reiterated that the ECB plans to buy assets in the form of private and public sector liabilities in the amount of 60 billion euros per month during the period from March to September 2016. The total volume of quantitative easing will be 1.1 trillion euros. The plans also include the ECB's purchase of assets with a negative yield if it is above the deposit rate (-0.2%). Analysts say that this fact has led to a sharp drop in European bond yields.
Meanwhile, the euro is at a minimum in September 2003 against the dollar. In tandem with the Japanese yen and other major competitors, the single currency also fell.
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