Technical and Market Analysis by Vistabrokers - page 24
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GBP / USD.Situation isHeating up
A situation with the pair resembles a wound-up to a limit spring, which is ready to burst soon. Fluctuations amplitude is gradually reduced, which is confirmed by converging lines of graphic consolidation figure "triangle". Today at 9.30 GMT data on retail sales, as well as the quarterly report of the Bank of England, will be published in the UK, and it will likely cause a breakthrough of at least one of the closest price levels, giving us a reason to enter the market in an appropriate direction.
We may talk about a possibility of opening positions in the direction of the triangle's exit only in the case of the level 1.4990 (buy) overcoming, while sales are recommended only when the price will overcome the level 1.4830. In such cases, it is important not to outperform the market, but to be abreast with it.
USD / JPY. BullsFailedandRetreated
As it was expected, in order to hit important (from a technical point of view) lines and levels of support it was needed a proper reason. Yesterday this reason was (not at once) the release of disappointing data on durable goods orders in the USA. They were particularly important because of the market's sensitivity to statistics, which has increased after the Fed at its last meeting had signaled for its propensity for analysis of upcoming statistical data. This took pressure on world stock indexes (including the US and Asian ones), with which USD / JPY is in a high degree of correlation, and the US dollar. All of this did not leave a chance to bulls, and at the moment we have an avalanche activation of stop orders, which are traditionally located slightly below important support levels.
It is recommended to sell with a target of 118.20, where is a 61.8% Fibonacci correction of growth in January-March.
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EUR / USD.End of the WeekExpectedto be Warm
Generally positive statistics on the US labor market, which has been published on Thursday, as well as a speech of a FOMC member Dennis Lockhart provoked the fall of the pair to an area of a short-term trend support line. It should be also noted that sales started from an important resistance level (61.8% Fibonacci correction of decrease in February-March), where long-term downtrend line also goes. Today, shortly after the opening of the US trading session the National Statistical Service of the United States will publish the final GDP for the fourth quarter of last year, and it is definitely worth attention.
In the context of the observed volatility increase it is recommended to work on a breakthrough of nearest technical levels, but before opening the position, it is better to wait for confirmation from indicators. Thus, purchases are justified in a case of rebound from a support line with a target at 1.1042, while a breakthrough of this line will open the way to achieving a following support.
USD / JPY. In anticipation of the US GDP
Buyers could benefit from yesterday's positive for the dollar events, which could again inspire optimism to the US economic growth and (for investors it is even more important), of course, increased expectations of markets regards rates hike in the near future. As a FOMC member Lockhart said yesterday during his speech, a strong economy gives grounds to wait for the policy tightening this summer. It is not necessary to write off a technical factor in a form of prices rebound from a 61.8% correctional Fibonacci level of an upward trend of January-March of this year.
A formal target of reducing (abovementioned Fibo level) was achieved, and now it is recommended to wait the final US GDP data (they are expected today in 14.30 GMT), before putting a stake on the particular scenario.
Vista Brokers: Online Investing and Trading, CFD for Stocks, Forex, Commodities and IndicesVista Brokers: Online Investing and Trading, CFD for Stocks, Forex, Commodities and Indices
EUR / USD.End of the WeekExpectedto be Warm
Generally positive statistics on the US labor market, which has been published on Thursday, as well as a speech of a FOMC member Dennis Lockhart provoked the fall of the pair to an area of a short-term trend support line. It should be also noted that sales started from an important resistance level (61.8% Fibonacci correction of decrease in February-March), where long-term downtrend line also goes. Today, shortly after the opening of the US trading session the National Statistical Service of the United States will publish the final GDP for the fourth quarter of last year, and it is definitely worth attention.
In the context of the observed volatility increase it is recommended to work on a breakthrough of nearest technical levels, but before opening the position, it is better to wait for confirmation from indicators. Thus, purchases are justified in a case of rebound from a support line with a target at 1.1042, while a breakthrough of this line will open the way to achieving a following support.
USD / JPY. In anticipation of the US GDP
Buyers could benefit from yesterday's positive for the dollar events, which could again inspire optimism to the US economic growth and (for investors it is even more important), of course, increased expectations of markets regards rates hike in the near future. As a FOMC member Lockhart said yesterday during his speech, a strong economy gives grounds to wait for the policy tightening this summer. It is not necessary to write off a technical factor in a form of prices rebound from a 61.8% correctional Fibonacci level of an upward trend of January-March of this year.
A formal target of reducing (abovementioned Fibo level) was achieved, and now it is recommended to wait the final US GDP data (they are expected today in 14.30 GMT), before putting a stake on the particular scenario.
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Market Pulse03/27
On Thursday, there will be a lack of important information. Several officials will speak today in Britain, and their comments may affect the dynamics of the pound. Some interesting indicators will be released in the USA, where also Fed head Janet Yellen will speak today.
7:00 ** Nationwide House Price Index - March (UK)
8:00 ** MPC Member Andy Haldane Speaks - March (UK)
8:45 ** BOE Governor Mark Carney Speaks - March (UK)
9:15 ** BOE Deputy Governor for Monetary Policy Ben Broadbent Speaks - March (UK)
Moderate impact on the market (GPB). Nationwide house price index shows the change in house prices in the UK. It is considered slightly lagging indicator of the housing market, but research notes may be interesting. Bank's of England officials speeches may also be interesting - investors will look for hints on the future strategy of the Central Bank in them.
10:30 ** Vice Chairman of the Federal Reserve Stanley Fischer Speaks - March (USA)
Moderate impact on the market (USD). Fisher is an influential economist who has worked on management positions at the Bank of Israel, the IMF, the World Bank, Citibank. Market analysts listen to his comments and observations closely.
12:30 ** Final GDP - Q4 (USA)
12:30 ** Personal Consumption (Final) - Q4 (USA)
12:30 ** Core Personal Consumption Expenditure (Final) - Q4 (USA)
14:00 ** Revised UoM Consumer Sentiment - March (USA)
Moderate impact on the market (USD). Analysts believe that the final data will show that the US GDP in the 4th quarter increased by 2.4% qoq and by 2.3% yoy. These data, as well as the information about personal consumer spending and consumer confidence may affect the market, which is now extremely sensitive to the US statistics.
19:45 *** Federal Reserve Chairperson Janet Yellen Speaks - March (USA)
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Vista Brokers:LaborMarket StatisticsPut New Heart into Dollar
On Thursday in the US were published data on unemployment and counting claims, which once again confirmed the recovery of the US labor market. After the publication the US dollar rose against major competitors, showing the strongest daily growth in a week against the euro.
Vista Brokers analysts note that the strong statistics give market participants confidence that the Fed will still raise rates in mid-2015. Especially because at the last press conference after the meeting of the Federal Reserve, its head Janet Yellen reiterated that the central bank is closely watching the outgoing data, on the basis of which will be made decisions on monetary policy.
Thus, the number of initial unemployment claims for the week ended on March 21 fell by 9,000 to 282,000, while analysts expected that value is similar to the previous week - 291 000 new applications. The number of counting claims fell by 6,000 to 2,416.
In February, US employers hired 295,000 workers. Thus, this index exceeds 200,000 the12th consecutive month, and it is the longest period of such growth since 1995. In addition, the US unemployment rate currently is at a minimum since May 2008 - 5.5%.
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Vista Brokers: Weak Statistics Boost Expectations of BOE New Stimulus
In the night from Wednesday to Thursday Japan has published a portion of important statistics, and most of the data were weaker than expected. Vista Brokers analysts say that amid such data, the confidence of market participants that the Bank of Japan will take new measures to stimulate the economy is boosting.
A consumer price index in the country continues to check the growth. In February, CPI rose by 2.2% vs. expected 2.3% and previous rate 2.4%. The consumer price index ex-fresh food showed an increase of 2.0% against expected 2.1%, as well as the consumer price index ex-food, energy.
We should also note that consumer price indices for the Japanese capital Tokyo were fully in line with forecasts, as well as data on unemployment. In February, the unemployment rate in Japan fell from 3.6% to 3.5%. Data on changes in retail sales were worse than expected. During the last winter month this index increased by 0.7% mom and fell by 1.8% yoy, against expectations of 0.9% and -1.4% respectively.
Recently, market participants and financial analysts are talking more about the possibility that the Bank of Japan will have to expand its already massive bond buying program, as the central bank did not succeed to achieve the inflation target of 2% yet. Interestingly, the target for consumer prices was established in April 2013, so that next month will be two years, during which the Bank of Japan is trying to achieve this target. In the way of the central bank are both political mistakes, such as sales tax increasing, and bad luck, by which we mean a decrease in oil prices.
Meanwhile, experts say that Japan's central bank is creating its own bubble in the country's securities market and risks to monopolize the market of government bonds. At the end of 2014 the Bank of Japan bought ETF assets in the amount of 3.85 trillion yen, and plans to buy 3 trillion yen annually. But the current ETF market value is only 11.5 trillion yen, that is, the market will be entirely in the hands of the central bank by the end of 2017. Then there will be only stocks. The central bank periodically enters to the market and buy stocks for 30-40 billion yen in the first half of the trading day, when the main trend has not formed yet. Naturally, then price goes up. Now Bank owns 2% of the total market in Japan, but this number is constantly increasing.
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GOLD.Goals of Correction are Achieved
A gold price has reached a broken at the beginning of this month support line, but this time from the bottom. Another limiting factor for bulls is a nearby 38.2% Fibo level of a total fall in January-March. Here, prior to weekly trading closing investors were taking profits, and after that quotes moved into an area of a formed with a nearest 38.2% Fibo level support. At the same time a reaction on fundamental statistics on Friday was smoothed, causing only a local increase in volatility, and this when the US GDP data were worse than expected (2.2% vs. 2.4%), and the consumer confidence index was better than expected.
It is expected that buyers' activity will increase on drawing near a level of 1190, which means an actual testing of the abovementioned 38.2% Fibonacci correction. It is recommended to open long positions only after a rebound and getting additional signals from trend indicators.
USD / JPY. BullsCome toLife
The final US GDP has confirmed a previous estimate (2.2%), disappointing those who hoped for more positive data. This has a short-term impact on the dynamics of the dollar, which fell directly after the publication. But then trading returned into a stable course and in the end of the week, no one dared to demonstrate a proactive stance. There were too many conflicting factors to take risks. While the market pays more attention to some technical aspects, the most influential of which can be called testing and rebound from a 61.8% Fibo level from an upward trend in January-March.
Correction of a first wave of growth that followed a testing of the abovementioned 61.8% Fibonacci level, gives reason to buy on a breakthrough of a top of this magnitude, corresponding to 119.50. Another barrier for growth and at the same a target level may be a lower limit of an overcome few days ago upward channel in a range of 120.10.
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Vista Brokers:DollarEnded theWeekLower against itsMajorCompetitors
A key event of Friday was a speech of the Fed Chairman Janet Yellen at a conference in San Francisco late in the evening. Vista Brokers analysts say that prior to this speech, market participants were afraid to make any sudden movements and to bet on the rise of the dollar. And these fears were justified: Yellen comments were as restrained as the Fed's accompanying statement after the meeting on March 18th.
The US dollar declines against a basket of major currencies for the second week in a row. Last trading week, the dollar index finished with a reduction, at around 97,374. While on Thursday the US currency had all the chances to increase when the labor market data came out stronger than expected.
So, let us note the main points of the Janet Yellen's speech: it is appropriate to leave monetary policy stimulating for some time, and rates will rise gradually over the next few years; the economy remains relatively weak, and the labor market still has a space to grow; retail sales data were a little disappointed, and the strong dollar has a negative impact on exports. The euro ended the week at $ 1.08910, against the yen the dollar fell to 119,150, and against the franc - to 0.96180.
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Vista Brokers: New Zealand DollarFalls againsttheUSDollar
Vista Brokers analysts point out that on Monday NZD / USD continues to decline, while against the Australian dollar the kiwi is recovering. At of this writing, versus the US dollar the New Zealand currency is at around 0.7514 against 0.7579 at the close of trading on Friday. A pair New Zealand dollar / Australian dollar is trading at 0.9756 against 0.9714 on Friday.
Note that for New Zealand and Australian currencies, two important events in the near future are GlobalDairyTrade auction this week, which will indicate a direction of prices for dairy products in the world and a meeting of the Reserve Bank of Australia. New Zealand's economy is largely influenced by the price of dairy products, and ANZ Bank predicts a fall in prices in next two months. Sentiment in the dairy market may be pessimistic, as it became known that Fonterra has increased supply volumes.
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Market Pulse03/30
On Monday, in many European countries will be published data on preliminary consumer price index. In the United States will be published data on personal spending. The day is not too full of important information, although the publication of the consumer price index in Germany may have a significant impact on the market.
7:00 ** Flash Consumer Price Index - March (Spain)
Moderate impact on the market (EUR). Inflation is one of key indicators, as it often has an influence on monetary policy. In Spain, analysts expect a decrease in inflation in March by 1%.
7:00 ** KOF Economic Barometer - March(Switzerland)
Moderate impact on the market (CHF). The barometer covers a lot of different indicators. In March, the index is expected to decline, which could put pressure on the franc.
8:30 ** Net Lending to Individuals - February (UK)
8:30 ** Mortgage Approvals - February (UK)
Moderate impact on the market (GPB). These indicators show a situation in lending, including the one at the real estate market, so that their growth is favorable for the currency. Experts' forecasts for February are positive.
12:00 *** Prelim Consumer Price Index - March (Germany)
12:00 *** Prelim Consumer Price Index - EU Harmonised - March (Germany)
Strong impact on the market (EUR). Analysts expect that in March the preliminary consumer price index has risen by 0.4% mom and 0.3% yoy. Expectations regarding the harmonized index are also optimistic. If the data exceeds the forecast, it may cause the upward movement of the euro.
12:30 ** Core PCE Price Index - February (USA)
12:30 ** Personal Spending - February (USA)
12:30 ** Personal Consumption Expenditure Deflator - February (USA)
Moderate impact on the market (USD). It is expected that in February, personal spending has risen, and it is considered one of the signals of economic recovery, which investors may perceive positively. Each signal market participants perceive now as proof of imminent Fed rate hikes.
14:00 ** Pending Home Sales - February (USA)
Moderate impact on the market (USD). Change in the volume of pending transactions at the real estate is an early indicator of the US housing market activity. Strong data are beneficial for the dollar.
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