Technical and Market Analysis by Vistabrokers - page 34
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Market Pulse 07/10
On Friday, the market will wait for the speech of the Fed's head Janet Yellen, which may shed light on the future plans of the US central bank (namely, terms in which the rate hike can be expected). Canada will attract the attention of traders with the release of the data on the labor market.
8:30 ** Visible Trade Balance - May (UK)
8:30 ** Trade Balance Non EU - May (UK)
Moderate impact on the market (GPB). The balance of trade is the difference between exports and imports in the reporting month. Higher values are favorable for the currency, as they reflect a smaller outflow of money from the country (as a rule, Britain suffers from a deficit).
12:30 *** Unemployment Rate - June (Canada)
12:30 *** Employment Change - June (Canada)
12:30 ** Full Time Employment Change - June (Canada)
12:30 ** Part Time Employment Change - June (Canada)
Strong impact on the market (CAD). Projections on labor market data in Canada are hardly optimistic - unemployment is expected to rise in June from 6.8% to 6.9%, and the number of employees - to decline by 4,500.
16:30 *** Federal Reserve Chairperson Janet Yellen Speaks - July (USA)
Strong impact on the market (USD). From Janet Yellen market participants expect hints on when the Fed will raise the interest rate. As a rule, Yellen is cautious in her statements.
Vista Brokers: Dollar Increased despite Weak US Labor Market Data
On Thursday, the US dollar, was mainly increasing against the euro and other competitors. Vista Brokers analysts note that the position of the US currency did not weaken even after the release of the data on unemployment claims in the United States, which was much worse than expected. The market ignored the statistics, watching only the developments in Greece.
Nevertheless, it is worth noting that the number of initial claims for unemployment benefits for the week ended July 4 has increased by 15 000 to 297 000, while analysts had expected a decline of 7 000 to 275 000. This is not a good sign, because the last minutes of the Fed's meeting has once again confirmed that the regulator requires more obvious signals of economic recovery, to talk about rate hike. Today, market participants will wait for the speech of the Fed's head Janet Yellen and her comments on the matter.
By the way, according to minutes, FOMC members have mentioned Greece and the impact of its problems on financial markets, which may keep the Fed from the rate hike. Now European authorities are deciding whether to accept conditions of the three-year program of financial assistance for which Greece has requested - the issue should be resolved at a crisis summit on Sunday.
EUR / USD. «Head-n-Shoulders»?
On
Friday morning bulls have started to wreck
nerves
of
Euro-skeptics - quotes have increased to the
1-
month
high
, making attempts to overcome not only the resistance line of
the
recent weeks short-term downtrend, but
also
the graphic border
of the
remarkable figure. Yes, indeed, it seems,
that
we have an inverted "head and shoulders" that determines our next steps. Note that in the absence of important fundamental releases today
's trading
will increasingly depend on technical factors, and that's good.
It is recommended to be prepared for entry into a long position in the case of
overcoming graphic
boundaries (the neckline)
of the
reversal pattern.
Volatility: 67%
Trend:
s
ide
ways
Fundamental background: weak
USD / JPY
I
s
T
rading in
P
hase with Asia
During the last few days
trading in
USD / JPY
was mostly
determined
with
the situation on Asian stock markets - recall the Chinese stock market this week
has
experienced the powerful wave of
sales. Amid this a
key Japanese index NIKKEI
was also under pressure
,
which
in a domino effect
has led to the
USD / JPY
decline
. Thus, quotes
have
reached the lower limit of the downward channel (which was launched at the beginning of June), where
it was
a sharp rebound.
It is recommended to open long positions in order to achieve the resistance line of the current price channel.
Volatility: 54%
Trend:
b
earish
Fundamental background: weak
Vista Brokers: European Stock Markets Rise
On Friday, European stock markets rallied. Vista Brokersanalysts note that financial market participants are hoping that the "Greek saga" will complete on Sunday with an agreement between Athens and creditors and approval of a new financial bailout program. Although this saga with the negotiations has been going on for months, still remains a chance that the European authorities will not allow the bankruptcy of Greece and its exit from the euro zone.
Amid optimistic expectations in early hours of the European trading session, the EURO STOXX 50 has risen by 2.60%, the French CAC 40 – by 2.57% and the German DAX 30 - by 2.27%.
So, the decision on Greece must be taken on a Sunday, at the unscheduled summit of European Union higher ranks. Athens are walking the razor's edge - if the agreement with creditors is not reached, the country will face in the first place, the collapse of the banking system. All banks in the country are closed for nearly two weeks and without liquidity from the ECB it is not understandable how they open. ATMs can give no more than 60 euros per day.
Nevertheless, the Greeks, led by Prime Minister Alexis Tsipras and the new Minister of Finance Euclid Tsakalotos defenses and keep going just to make some concessions in the negotiations. So, late in the evening on Thursday, Athens have offered creditors a new reform plan, which includes painful budget cuts and tax increases. In return, Greece expects to receive from the "troika" 50 billion euros over the next three years.
Today's increase in European stocks, was primarily caused with the financial sectorrally. For example, shares of French lenders Societe Generale and BNP Paribas climbed 3.38% and 3.51%, and securities of Deutsche Bank and Commerzbank - by 3.39% and 2.93%. On the periphery the Italian Intesa Sanpaolo and Unicredit rose by 3.74% and 3.78%, while Spanish BBVA and Banco Santander - by 2.52% and 2.99%.
Vista Brokers: Oil Is Rising amid Stock Market Rally in China
On Friday, oil futures are rising in price amid China's stock market rally, which followed protracted decline (-30% over the last three weeks). Vista Brokersanalysts note that the main index of the Chinese market Shanghai Composite has gained more than 5% today after the Chinese authorities have taken additional measures to stabilize the situation and to ensure market liquidity inflows.
Commodity investors viewed negatively the decline of the Chinese stock market, because China is one of the largest importers of oil and other resources in the world. Stabilization of the situation supports the market. Today, on the New York Mercantile Exchange crude oil futures for August delivery have reached during early European trading the level of $ 53.28 a barrel, gaining 0.90%.
Meanwhile, on the ICE Futures Exchange in London, August Brent futures have risen by 1.09% to $ 59.22 per barrel. The spread between Brent and WTI contracts is equal to $ 5.94 per barrel.
Market Outlook According to the Method of Bill Williams:GOLD
We have fixed the result on the long position from 1164.93 at 1158.19 (the red Alligator's line crossing) with loss. At this stage, when we are out of the market, we need to place pending breakthrough orders at the nearest fractals. Thus, we will buy from 1167.62, and sale from 1156.84.
Volatility: 22%
Trend: sideways
Fundamental background: weak
Market Outlook According to the Method of Bill Williams:USD/JPY
It seems that Asian stock markets have come out of anosedive and currently we have strong recovery of the USD / JPY, which, in particular, seriously correlates with the dynamics of the Japanese index NIKKEI. Amid this we have to urgently fix the result onthe short position from 122.59 in accord with the signal on the closure of one of the bars above the red Alligator's line (121.71). Currently we are out of the market with the nearest buy order at 122.87 and the sale one at 120.39. Note that conditions for potential entry are not the best, since indicators values are far from zero, and Alligator's lines are not intertwined.
Volatility: 56%
Trend: sideways
Fundamental background: weak
Market Outlook According to the Method of Bill Williams: EUR/USD
The long position from 1.1091 has not given the expected effect, because soon we received a signal to leave the market at 1.1021. However, soon it took another fractal breakthrough, which means for us another entry into the market to buy from 1.1127. It seems that the movement continues,so we are ready to add to the position if receive additional System signals.
Volatility: 68%
Trend: bullish
Fundamental background: weak
Market Outlook According to the Method of Bill Williams:GBP/USD
We have closed the order to sale from 1.5671 with a significant profit (1.5445) on the signal of the red Alligator's line crossing. Now the price is going up, but it does not concern us, because none of placed in opposite directions breakthrough orders at 1.5627 (buy) and 1.5342 (sell) was reached.
Volatility: 37%
Trend: sideways
Fundamental background: weak
Market Pulse 07/13
The most important event of the day on Monday will be a meeting of the European authorities in Brussels devoted to the Greek bailout program. The Bank of England today will publish its credit conditions survey.
*** Trade Balance - June (China)
** Exports - June (China)
** Imports - June (China)
Strong impact on the market. China does not inform in advance the exact time of publication, but it is worth noting that statistics published in this country, can significantly affect financial markets. In June, analysts expect the decline of the positive trade balance, a slight increase in imports and decrease in exports.
4:40 ** Tertiary Industry Activity - May (Japan)
Moderate impact on the market (JPY). The importance of this indicator in Japan inferiors to a manufacturing activity, but together they allow to form a picture of activity in the economy. In May it is expected a slowdown.
8:30 ** Credit Conditions Survey - Q2 (UK)
Moderate impact on the market (GPB). The quarterly survey of the Bank of England regards credit conditionsfor households, small businesses, non-financial corporations and non-financial companies in which respondents are asked to assess the availability and volume of lending.
*** Eurogroup Meetings - June (euro zone)
** ECB President Mario Draghi Speaks - June (euro zone)
Strong impact on the market (EUR). The question of financial assistance to Greece remains in focus of the market, so the Eurogroup meeting on this subject will certainly attract attention. Any decisions taken regards Greece, as well as expectations and assessment of these decisions will be reflected in the dynamics of the euro and other tools.
Vista Brokers: Market Believed in Greece again
On Friday, the euro was increasing against the US dollar and the Japanese yen amid renewed optimism about Greece. Vista Brokersanalystspoint out that Athens gave creditors a new reform plan, including budget cuts, and this gives hope that Greece will still receive financial assistance and remain in the euro zone. Amid this the EUR / USD has risen by 1.1% to 1.1148 on Friday after touching the peak of July at around 1.1215.
The pair has stopped growing when comments of Fed's head Janet Yellen were more optimistic than the market had expected. According to Yellen, the Fed is getting ready to raise the key interest rate later this year. However, it did not add the US currency enough strength to finish the week higher against a basket of currencies. The dollar index has fallen on Friday by 0.73% to 95.96.
Recall that at the weekend the Greek question was not decided. According to participants of the summit, Greece needs funding in the amount from 82 to 86 billion euros. The country needs 7 billion transfer until 20 July, and another 20.5 billion - until mid-August.
Vista Brokers: Chinese Statistics Added Optimism
During Monday's morning trading the European single currency was rising after a slight decrease at the opening. Vista Brokersanalysts note that the Asian stock market also strengthens amid statistics on the import and export in China, which was better than expected.
Today it became known that euro zone leaders had met through the night and held a meeting on the new program of financial aid to Greece. The Greek authorities reported received a message that key reforms must be introduced this week to earn the trust of creditors and only then talks about the third program of financial rescue will continue. Note also that in the media there was anecdotal evidence that the European Central Bank has allowed Athens to delay payment on the loan, scheduled for July 20 in the amount of 3.5 billion euros.
\Asian indices are growing today after data on import and export in China, published in the morning, were higher than forecasts, and this led to the increased optimism of investors regards the second world's largest economy. Thus, in June, the balance of foreign trade in China has declined, but exports have risen by 2.8% after falling by 2.5% a month earlier and against the expected growth of only 1.0%. The volume of imports continues to decline. In June the figure has dropped by 6.1%, but compared with the expected decline of 15.5% and a fall of 17.6% in May, the data can be regarded as positive.
Amid this the main Japanese Nikkei index has risen by 1.6%. The MSCI index of Asia-Pacific region, excluding Japan, has increased by 0.8%. Recall that last week the Asian stock market was supported by additional measures taken by Beijing, and today's strong data from China only increased optimism. Thus, the index CSI300, covering major Chinese companies, rose 3% after rallying 5.7% last week.
EUR / USD. Techn
ical
vs.
Fundamental
Fundamental factors (there is still no agreement on Greece) hinder a full formation
of
a
graphic reversal pattern «Head-n-Shoulders».
Meanwhile, an
upside potential remains.
If purchases were made in accordance with the signal of
the
graphic "neck line" breakthrough,
it is recommended to hold the position
.
Volatility: 67%
Trend:
s
ide
ways
Fundamental background: weak
USD / CAD.
Near
D
ividing
L
ine
In the course of the next
growth
wave
within boundaries of
a wide up
ward channel
quot
s have
reached its upper border. This level
is
very close to multi-year highs set in March of this year. In the past few days, market participants could not determine the
ir
preferences, and, given the very weak news background today, it is doubtful that in the next few hours anything
will be
decided. At the same time, the technical picture leads to the conclusion,
using
indicators to determine the future trading direction.
Receiving reversal
signal
s
, it is recommended to open short positions with the aim of achieving the opposite
border
of the channel.
A
Stop loss should be placed above the high,
at
1.2780.
Volatility: 65%
Trend:
b
earish
Fundamental background: weak