Technical and Market Analysis by Vistabrokers - page 20
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AUD / USD. On theWay toFresh Lows
After Friday's more than optimistic data on the US labor market, AUD / USD has made a significant leap down (at the moment the size of the movement is more than two figures), rebounded from the medium-term trend line in its direction. As a result, today a new six-year low was achieved. It is worth noting that the Reserve Bank of Australia leaders are still interested in further reducing of the national currency in the foreign market – today it was confirmed by the head of the RBA economic forecasts department Kent. As arguments he has named the situation with the current level of unemployment, which, by the way, had reached 13-year highs, and a drop in iron ore, the price of which, in turn, is at multi-year lows. Today, China has reported on industrial production (6.8% yoy against the expected 7.7% yoy), and retail sales, where the growth rate decreased to 10.7% in annual terms vs 11.9% a month earlier.
It is recommended to hold short positions. The global target can be a support line drawn through lows of 2001 and 2008.
USD / CADRemainsStable, despiteDollar Strength
Quotes have reached the upper limit of a shallow rising channel at 1.2700. In general, the loonie in recent weeks was showing a relative stability against the main beneficiary of the foreign exchange market after the Bank of Canada has set out its wait-and-see attitude to the possible change in interest rates, whereas previously the market had expected a further reduction in one of the next meetings. Among upcoming events that can qualitatively affect the current situation, we can note scheduled for Friday data on the labor market in Canada. Before this data we can count on a relatively quiet trading in a range with a high probability.
It is recommended to wait for confirmation of a rebound from the upper border of the channel by means of oscillators (eg, Stochastic) and to sell in order to achieve its opposite graphical boundary. A Protective stop should be moved behind the current local maximum of 1.2703.
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Vista Brokers:Greek RevisedReform PlanFailed toImpressCreditorsAgain
On Tuesday the euro continued to decline against its main competitors, and European bond yields hit new lows. Vista Brokers analysts note that the pressure on the euro has strengthened after the launch of the ECB quantitative easing program on Monday. Moreover, the situation in Greece makes currency to reduce.
It should be noted that Greece has performed another updated list of reforms ahead of the Eurogroup meeting, but international lenders were not satisfied again. They especially did not like the idea to combat tax evasion and youth unemployment at the same time, represented by the Greek government. This idea is to hire students, housewives and even foreign tourists who do not have appropriate education, as tax collectors.
The Eurogroup head Jeroen Deysselblum summed up the new phase of talks on Greece, noting that the country urgently needs to carry out real reform, not just to discuss them, otherwise it will not get the money. The next stage of negotiations with the "troika" of creditors (EU, IMF and ECB) will be held today.
On Tuesday, European stock markets were basically flat. Stoxx Europe 600 Index rose by 0.2%, the German DAX was down by 0.3% and France's CAC 40 index lost 0.2%.
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Vista Brokers: AUD / USDFreshed its Lows
On Wednesday, the Australian dollar has dropped amid weak statistics and general strengthening of the US dollar due to expectations of the Fed interest rates hike. Vista Brokers analysts note that during the Asian session on Wednesday AUD / USD pair has dropped below 0.7600, reaching its lowest level since 2009.
Today's statistics has helped the Australian dollar to fall. Thus, the Westpacconsumersentiment index in March fell by 1.2%, from 100.7 in February to 99.5. In February, the index rose sharply, after the Reserve Bank of Australia had unexpectedly lowered the rate, but after this, as a rule, should be a rebound, so the level of consumer sentiment falled in March.
Among other factors of the index reducing can be noted a sharp increase in gasoline price and weak GDP data. Latest statistics showed that the growth of the Australian economy in the 4th quarter of 2014 amounted to only 0.5%. Consumers are concerned about the economic outlook and the stability of the labor market, and lower interest rates had only a temporary effect, reducing their anxiety.
Also today, data on changes in the volume of mortgage lending came out in Australia and showed a 3.5% decrease in the number of loans, which is much higher than the predicted 1.9%.
A speech of the RBA deputy governor Christopher Kent did not add any positive. He reiterated that the acceleration of economic growth in the short term should not be expected, that unemployment may rise more than expected earlier, that the outlook remains uncertain. He also said that interest rates support the economy and, in particular, the real estate market, and that the low Australian dollar contributes to some sectors.
Analysts note that the statistics released today should not have such a strong influence on the Australian dollar. The main reason for the decline is a strong US dollar, which is risen on expectations of Fed tightening.
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Market Pulse 11.03
On Wednesday, some interesting data will be released in the UK, and the Reserve Bank of New Zealand will announce a decision on interest rates. China has already published data on industrial production, as well as on fixedassetinvestment.
7:00 ** ECB President Mario Draghi Speaks - March (euro zone)
Moderate impact on the market (EUR). This Monday the ECB has officially launched a program of quantitative easing, so that Draghi's comments may be related to the expectations in regard to this program. In any case, in his speech, market participants will be looking for hints of further central bank's actions.
9:30 *** Industrial Production - January (UK)
9:30 ** Manufacturing Production - January (UK)
15:00 ** NIESR GDP Estimate - February (UK)
15:00 ** MPC Member Martin Weale Speaks - February (UK)
Strong impact on the market (GPB). Many analysts believe that the UK is the next applicant for the increase in interest rates after the United States. Investors are now looking for confirmation of this hypothesis, and positive data on industrial production, as well as on NIESR GDPestimatecan be perceived this way.
20:00 *** Official Cash Rate - March (New Zealand)
20:00 *** RBNZ Rate Statement - March (New Zealand)
20:00 ** RBNZ Monetary Policy Statement - March (New Zealand)
20:05 *** RBNZ Press Conference - March (New Zealand)
Strong impact on the market (NZD). Analysts do not expect any surprises from the RBNZ and suggest that the bank will keep its key interest rate unchanged – at the level of 3.50%.
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Market Pulse 12.03
After yesterday's sharp fall of the Australian dollar against the US dollar, investors were waiting for data on the Australian labor market, which came early in the morning. Statistics was surprisingly positive. The unemployment rate in the country decreased by 0.1%, while the number of employees increased by 15.6 thousand. Analysts had expected the unemployment rate will remain at the same level, and employment will grow by 15.3 thousand. Some interesting data will be published today in the United States.
10:00 ** Industrial Production - January (euro zone)
Moderate impact on the market (EUR). Analysts expect a small growth of industry in January, after zero growth mom and decrease yoy a month earlier.
12:30 ** New Housing Price Index - January (Canada)
12:30 ** Capacity Utilization Rate - January (Canada)
Moderate impact on the market (CAD). Expectations regarding these data is moderately optimistic. After the Bank of Canada contrary to the predictions did not go to the next interest rate cut, the position of the Canadian dollar strengthened. Weak statistics can disturb this delicate balance.
12:30 *** Retail Sales - February (USA)
12:30 *** Core Retail Sales - February (USA)
12:30 ** Retail Sales Excluding Auto & Gas - February (USA)
12:30 *** Unemployment Claims - February (USA)
12:30 ** Continuing Claims - February (USA)
12:30 ** Import Prices - February (USA)
Strong impact on the market (USD). After a strong labor market data on Friday, the dollar has received considerable support and continues to grow. Perhaps the positive data today will help the greenback to strengthen its position. In general, forecasts are optimistic.
12:45 *** BOE Governor Mark Carney Speaks - March (UK)
Strong impact on the market (GPB). Carney's optimistic statements may boost the pound, but the head of the Bank of England may once again remind of retained risks for the British economy, the weak inflation and the troubled real estate market. In this case, the pound could come under pressure.
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Vista Brokers: EUR / USDStarted to Fall more Quickly
On Wednesday, the single currency continued to decline against the dollar on expectations associated with the Fed interest rates hike in June and the ECB quantitative easing program launching. Vista Brokers analysts note that a divergence of the United States and the euro zone monetary policies, on the one hand, stirs up investors' interest in the dollar, and on the other - puts pressure on the euro.
According to experts, the euro tends to parity in relation to the dollar. If on Tuesday EUR / USD has been closed at 1.0698, then on Wednesday it dropped down to 1.05562. Fall below 1.5000 would mean the lowest level since January 2003. Note also that the yield of European countries' bonds during the last week fell to record lows. The dollar index has already risen to almost 100.
Recall that on Monday the European Central Bank has launched the quantitative easing program, which involves the repurchase of bonds in the amount of 60 billion euros per month and 1 trillion euros for the whole program. Meanwhile, the Fed may raise interest rates as early as June of this year. Strong labor market data, published last Friday, have strengthened investors' hopes for rates hike.
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Vista Brokers: GoldContinues toFallvs DollarStrengthening
On Wednesday, gold has fallen to 4-month low amid growing demand for the US dollar. Vista Brokers analysts note that the US currency continues to strengthen in the full currency market range: against the euro, franc, pound and other competitors, due to expectations that the Fed will raise interest rates in June. The growth of currency reduces the demand of foreign investors for gold and other precious metals.
By the end of trading on Wednesday on the COMEX April gold futures were down by 9.50 dollars, or 0.8%, to 1150.60 dollars per troy ounce. This is the lowest closing level since November 6, when contracts have ended the session at 1142.60 dollars per ounce.
Thus, the yellow metal was at the level just above $ 8 from the new low of nearly 5 years, and analysts believe that this reduction opens the way to even lower values. Gold does not bring investors income in the form of dividends or interest, so it will be difficult to compete with profitable assets such as treasury bonds and shares amid the Fed rate hike.
Waiting for the Fed interest rates hike in the middle of this year has an impact on all financial markets. On Tuesday the Wall Street Journal has reported that the Fed will probably remove words about "patience" in relation to the interest rate hike from the accompanying statement at the next meeting. This will be an additional signal to the fact that in June the central bank will decide to increase rates.
Note that the Fed will be the first of the largest global regulators who raise rates, as in the past few years we see only decline. Especially noticeable is the contrast between the Fed and the ECB monetary policies. That is why the decline in the euro against the dollar is currently very strong. Thus, on Wednesday, EUR/USD has fallen to 1.0547 level, which is not so far from a parity, continuing to lead from the start of the ECB quantitative easing program.
Other precious metals show the same trend as gold does. Platinum yesterday has dropped in price by 1.3% to 1115.40 dollars per ounce (the lowest closing level since 2009). Palladium fell below $ 800 per ounce for the first time since February 24. Silver lost 26.8 cents to $ 15,365 per ounce.
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Vista Brokers:US RetailSalesDisappointed theMarket
After Friday's strong data on the US labor market, investors for several days were in euphoria in relation to the dollar. This has led to a significant increase of the currency against some of its competitors. Vista Brokers analysts note that on Thursday retail sales data in the United States suspended the rising dollar and forced currency to fall against the euro and the yen.
Thus, the volume of retail trade in February showed a decline of 0.6% against the expected growth of 0.3%. The volume of trade excluding car sales fell by 0.1% against the projected growth of 0.6%. This is the third consecutive monthly decline. In January, sales fell by 0.8% after falling by 0.9% in December.
Thus, despite the apparent improvement in the labor market and the decline in oil prices, consumption is not restored - households remain cautious. This may temper the enthusiasm of investors in the Fed interest rates hike. Recall that at the moment market expectations subtends a rate hike in June this year. After the publication of weak statistics, the euro rose from 1.0622 dollars to 1.0633 dollars. The dollar fell against the yen to 120.88 yen from 121.03 yen.
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Vista Brokers:InvestorsFixed Profitson EUR / USD and USD / JPY
Dollar has stopped to grow against the euro and the yen after weak data on retail sales in the United States, published on Thursday. Vista Brokers analysts say that weak statistics has become a signal for the end of the week-long dollar rally. It is a long overdue pullback, and after the data release, investors began to take profits on EUR / USD and USD / JPY.
EUR / USD has risen from 1.0548 to 1.0635, but currently is still near 12-year highs. USD / JPY on Thursday has dropped from 121.45 to 121.28, but on the Friday morning, returned to the starting position. The pair is at the highest level since July, 2007.
Recall that the strengthening of the dollar against major competitors began when on Friday, March 6 the strong data on the US labor market was published and led to increased expectations of the Fed interest rates hike in June. Then, on Monday, March 9 ECB launched its quantitative easing program and began to purchase bonds, which further undermined the position of the euro. European bank seeks to increase liquidity in the euro and lowering bond yields to help economic growth in the euro zone and push inflation. The Bank of Japan has also significantly softened its monetary policy.
Analysts believe that profit-taking after the week-long rally does not mean that investors have lost confidence in the dollar. In medium and long term, the US currency tends to the uptrend. Today, some accents can be arranged by statistics on the producer price index and consumer sentiment index from the University of Michigan in the United States. But the focus of investors will now be sent to the next week FOMC meeting. Perhaps the Fed will make some sort of clarity about when rates begin to rise. Or vice versa they will disappoint the market with the lack of specificity or doubts.
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Market Pulse 13.03
On Friday, an important statistic is expected mainly in the US and Canada. Data on producer price index and the index of consumer sentiment in the United States may have a significant impact on the US dollar.
12:30 ***UnemploymentRate - February (Canada)
12:30 *** Employment Change - February (Canada)
12:30 ** Full Time Employment Change - February (Canada)
12:30 ** Part Time Employment Change - February (Canada)
Strong impact on the market (CAD). Expectations about Canadian labor market data are optimistic: experts predict a decrease in the unemployment rate from 6.6% to 6.5%. This may support the Canadian dollar, which is already felt confident after the Bank of Canada did not cut interest rates once again, contrary to expectations.
12:30 *** Producer Price Index - February (USA)
12:30 ** Producer Price Index ex Food & Energy - February (USA)
Strong impact on the market (USD). After falling by 0.8% in January, analysts expect growth of the producer price index by 0.2% in February. Strong data could support the dollar.
14:00 *** Michigan Consumer Sentiment Index - March (USA)
Strong impact on the market (USD). In March analytics expect the index growth to 95.6. The US consumer sentiment is improving, so that the actual data can be even stronger than forecast, which could support the dollar.
15:15 **MPCMember Andy HaldaneSpeaks- March (UK)
Moderate impact on the market (GPB). Comments of the Monetary Committee member will attract the attention of investors because they can shed light on sentiment in this BoE body, which takes decisions on interest rates.
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