USDCHF Technical Analysis 2014, 18.05 - 25.05: Breakout
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newdigital, 2014.05.17 11:16
Forex Fundamentals - Weekly Outlook May 19-23Rate decision in Japan, inflation data in the UK and Canada, FOMC Meeting Minutes, Unemployment Claims, German Ifo Business Climate and US housing data are the main events on our list. Here is an outlook on the main market-movers for this week.
Last week, major US figures came out above expectations; Annual inflation reached 2%, as expected and the monthly CPI edged up to 0.3%. Meanwhile, the annual core inflation beat forecasts with a 1.8% reading. Furthermore, the sharp drop in the number of unemployment claims reaching a 7-year low of 297,000, reaffirms the strength of the US labor market. These positive signs support the Fed’s tapering plan, indicating the US economy is getting stronger and does no longer need QE. Will the US housing data also change for the better this week.
- UK inflation data: Tuesday, 8:30. UK inflation remained below the BOE’s 2.0% inflation target in March, reaching 1.6%, the lowest reading since October 2009. This reading was preceded by 1.7% in February. This was the sixth consecutive month of low inflation narrowing the gap between wage growth and the rise in prices contributing to business stability. UK inflation is expected to increase to 1.7%.
- Japan rate decision: Wednesday. Governor Haruhiko Kuroda maintained the BOJ’s monetary policy in April expressing confidence that the economy is advancing according to plan. However, many analysts believe the BOJ will have to ease policy in the near future to prevent a deflation trend. Kuroda told Prime Minister Shinzo Abe that he will adjust policy without hesitation in case the 2.0% inflation target may be jeopardized. No change is expected this time.
- US FOMC Meeting Minutes: Wednesday, 18:00. FOMC minutes released in April indicate the Fed’s intention of maintaining loose monetary policy for years to come. The FOMC welcomed the pickup in GDP growth registered after the weak first quarter affected by the cold weather. The members supported a low fed funds rate for as lonf as inflation remains below the 2% target. Tapering should continue and changes to guidance are possible. The FOMC expects that the economy will improve.
- UK GDP data: Thursday, 8:30. According to the NIESR estimates GDP edged up 1.0% in the second quarter after posting a 0.8% expansion rate in the first three months of 2014. The growth levels nearly equal the pre-financial crisis peak. NIERS forecasts a 2.9% growth rate in 2014. However, despite the pick-up, income per capita will need another three years to catch up with GDP expansion. GDP growth in the second quarter is expected to reach 0.8%.
- US Unemployment Claims: Thursday, 12:30.Initial claims for U.S. unemployment benefits hit a seven-year low of 297,000 claims last week, confirming the strong recovery in the US economy. Claims fell 24,000 from the preceding week, indicating stronger economic growth in the second quarter. Stronger labor market and rising inflation pressures give green light to the Fed’s ongoing tapering move. Jobless claims are expected to increase to 312,000.
- US Existing Home Sales: Thursday, 12:30. Second hand homes sales declined to their lowest level in more than 1-1/2 years in March, reaching an annual rate of 4.59 million units. However, sales were stronger than the 4.57 million forecasted by analysts, indicating that the negative trend in the housing market may be over. Supply increased as well as the number of first time buyers. Existing Home Sales are expected to rise to 4.71 million.
- German Ifo Business Climate: Friday, 8:00. German business climate index rose to 111.2 in March, following a revised 110.7 in February. The reading was stronger than the 110.5 points forecasted by analysts. The Ukraine crisis took less attention in the survey despite Barack Obama’s warnings of additional sanctions against Russia in case it fails to reach an agreement with Ukraine. German business climate is predicted to reach 111.
- US New Home Sales: Friday, 14:00. Sales of new U.S. homes plunged to their lowest level in eight months reaching a seasonally adjusted annual rate of 384,000 units in March. It was the second consecutive monthly drop indicating a slowdown in sales. Economists expected sales to increase to 455,000 saying the unexpected drop may be related to cold weather conditions. However, the weak demand increased the months’ supply of houses on the market to 6.0, the highest level since October 2011, from 5.0 months in February. New home sales are expected to reach 426,000.
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newdigital, 2014.05.19 09:24
2014-05-19 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - German Deutsche Bundesbank (Buba) President Weidmann Speech]
- past data is n/a
- forecast data is n/a
- actual data is n/a according to the latest press release
Speech at a Symposium organized by Deutsche Bundesbank, in Frankfurt
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BUBA’s Weidmann says ECB will closely monitor FX moves when weighing policy decisions
Here we go, right on cue
- but it would be short sighted to look at one-dimensional fx rise without looking at stimulating effecto f lower bond yields
- targeting a weaker euro could prompt counter-reaction
- euro target rate could conflict with price stability
- but fx rate is relevant for monetary policy as it can influence price developments
- Eurozone countries must make their economies competitive
- Euro’s gains partly due to capital inflows
EURUSD a little higher at 1.3719 on the view that a weaker euro could prompt adverse impact so they will be careful on driving it lower.
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USDCHF M5 : 8 pips price movement by EUR - German Buba President Weidmann Speech news event
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newdigital, 2014.05.18 12:57
USD/CHF Fundamentals - weekly outlook: May 19 - 23The dollar moved higher against the Swiss franc on Friday, but remained below the three-month peaks hit in the previous session as investors digested a mixed bag of U.S. economic data.
USD/CHF ended Friday’s session at 0.8926, up 0.19% for the day, holding just below the highs of 0.8959 struck on Thursday, the most since February 13.
The dollar was boosted after the Commerce Department reported that U.S. housing starts jumped 13.2% in April, after a 2.0% increase in March.
It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.
The upbeat housing data was offset by a report showing that U.S. consumer confidence deteriorated in May. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.
The dollar advanced to three month highs against Swissy in the previous session as sharp losses in the euro bolstered the greenback.
The single currency came under renewed selling pressure after weaker-than-expected data on euro zone first quarter growth added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.
The euro zone’s gross domestic product grew just 0.2% in the first quarter, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.
EUR/CHF ended Friday’s session at 1.2221, edging up 0.08%.
In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.
Ahead of the coming week, Investing.com has compiled a list of this and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
Tuesday, May 20
- In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.
- Fed Chair Janet Yellen is to speak at an event in New York.
- Later Wednesday, the Fed is to publish the minutes of its May meeting.
- The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.
- The U.S. is to round up the week with data on new homes sales.
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newdigital, 2014.05.22 09:57
2014-05-22 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - French PMI]
- past data is 51.2
- forecast data is 51.1
- actual data is 49.3 according to the latest press release
if actual > forecast = good for currency (for EUR in our case)
EUR French PMI = Level of a diffusion index based on surveyed purchasing managers in the manufacturing/services industry
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French Private Sector Slips Into Contraction In May
The French private sector contracted for the first time in three months in May, flash survey data from Markit Economics showed Thursday.
The flash composite output index fell to 49.3 in May from 50.6 in April. The score below 50 indicates contraction in the sector.
The Purchasing Managers' Index for manufacturing declined more-than-expected to a 4-month low of 49.3 in May from 51.2 in April. The expected reading was 51.
Likewise, the services PMI dropped to 49.2 from 50.4 a month ago. Economists had forecast the score to remain at 50.4.
Lower output was recorded across the service and manufacturing sectors. New business received by French private sector firms decreased for the second month running in May.
Employment in the French private sector fell for a seventh consecutive month and the rate of job shedding was the sharpest since February.
Divergent price trends were signaled in May. Input price inflation across the French private sector accelerated to a four-month high, driven by a sharper increase in service providers' costs.
On the other hand, private sector output prices continued to fall, with the rate of decline accelerating to the sharpest in ten months.
"With GDP having stagnated in Q1, the PMI data so far suggest another disappointing performance in the second quarter," said Jack Kennedy, senior economist at Markit said.
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USDCHF M5 : 9 pips price movement by EUR - French PMI news event
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newdigital, 2014.05.22 12:55
2014-05-22 07:30 GMT (or 09:30 MQ MT5 time) | [EUR - German PMI]
if actual > forecast = good for currency (for EUR in our case)
EUR - German PMI = level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It's a leading indicator of economic health - above 50.0 indicates industry expansion, below indicates contraction.
==========
German manufacturing PMI falls to 6-month low of 52.9 in May
Manufacturing activity in Germany expanded at the slowest rate in six months in May, dampening optimism over the health of the euro zone's largest economy, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary German manufacturing purchasing managers' index fell to a seasonally adjusted 52.9 this month, down from a final reading of 54.1 in April. Analysts had expected the index to inch down to 54.0 in May.
Meanwhile, the preliminary services purchasing managers' index improved to a 35-month high of 56.4 this month, up from a reading of 54.7 in April. Analysts had expected the index to ease down to 54.5 in May.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Commenting on the report, Ollver Kolodselke, Economist at Markit said, "Survey data for the second quarter so far suggest that we should expect another period of solid growth of GDP."
Following the release of the data, the euro trimmed losses against the U.S. dollar, with EUR/USD shedding 0.07% to trade at 1.3676, compared to 1.3665 ahead of the data.
Meanwhile, European stock markets were higher after the open. Germany's DAX picked up 0.3%, the Euro Stoxx 50 rose 0.2%, France's CAC 40 eased up 0.1%, while London's FTSE 100 added 0.3%.
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D1 price: it was breakout on this timeframe on close bar together with full reversal from bearish to bullish market condition. If D1 price will break 0.8959 resistance so this breakout will be continuing.
H4 price is on triangle pattern breakout started on open bar for now and trying to break 0.8922 resistance level.
W1 price is on market rally started with breaking 0.8922 resistance.If D1 price will break 0.8959 resistance level so the primary bullish will be continuing.
If not so we may see the ranging market condition within primary bullish.
UPCOMING EVENTS (high/medium impacted news events which may be affected on USDCHF price movement for this coming week)
2014-05-19 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - German Deutsche Bundesbank (Buba) President Weidmann Speech]
2014-05-20 06:00 GMT (or 08:00 MQ MT5 time) | [EUR - German PPI]
2014-05-20 16:30 GMT (or 18:30 MQ MT5 time) | [USD - FOMC Member Plosser Speech]
2014-05-20 17:00 GMT (or 19:00 MQ MT5 time) | [USD - FOMC Member Dudley Speech]
2014-05-21 15:30 GMT (or 17:30 MQ MT5 time) | [USD - Fed Chair Yellen Speech]
2014-05-21 18:00 GMT (or 20:00 MQ MT5 time) | [USD - FOMC Meeting Minutes]
2014-05-22 01:45 GMT (or 03:45 MQ MT5 time) | [CNY - HSBC Manufacturing PMI]
2014-05-22 14:00 GMT (or 16:00 MQ MT5 time) | [USD - Existing Home Sales]
2014-05-23 06:00 GMT (or 08:00 MQ MT5 time) | [EUR - German GDP]
2014-05-23 14:00 GMT (or 16:00 MQ MT5 time) | [USD - New Home Sales]
Please note : some US (and CNY) high/medium impacted news events (incl speeches) are also affected on USDCHF price movement
SUMMARY : breakout
TREND : bullish
Intraday Chart