EURUSD Technical Analysis 2015, 07.06 - 14.06: correction within the bullish trend with possible reversal to the bearish with 1.0818 support level
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Sergey Golubev, 2015.06.05 16:52
Forex Weekly Outlook June 8-12 (based on forexcrunch article)
The US dollar had the final word in a turbulent and volatile week. G7 Meetings, a rate decision in New Zealand, employment data in Australia, as well as US retail sales, PPI and Consumer Sentiment stand out. These are the highlight events for this week. Join us as we explore the main market movers.
US Non-Farm Payrolls surprised with an excellent release showing a job gain of 280,000 in May. This was accompanied by a rise in wages widening participation and sent the dollar rallying. Things were more complicated beforehand for the greenback. The euro enjoyed the lack of worries from the ECB about bond volatility and the lack of rush to front load QE. Yet most of the EUR/USD surge was eventually erased. The pound suffered from a poor PMI while the Aussie only partially enjoyed the strong GDP report. What’s next for currencies? We can certainly agree with Draghi about getting used to volatility. Let’s start:
- G7 Meetings: Sun-Mon. finance ministers and central bankers from 7 industrialized nations will meet in Germany to discuss the escalating Greek debt crisis as well as global economy and foreign policy challenges. Russia will not participate in these meeting, but German Chancellor Angela Merkel noted there are many other ways to communicate with the Russian president. For example, the Normandy Format, where Germany and France together with Russia and Ukraine discuss how to resolve the conflict in Ukraine. The IMF will lead the negotiations with Greece instead of a German-dominated negotiating forum.
- Glenn Stevens speaks: Wednesday, 2:50. RBA Governor Glenn Stevens will speak in Melbourne after leaving us with a neutral bias in the last rate decision. Stevens may speak about the slower than expected pace of growth in Australian economy and the weakness in business capital expenditure in both the mining and non-mining sectors. However, the good news is that the Aussie depreciated in the past year, lowering key commodity prices.
- Mark Carney speaks: Wednesday, 20:00. BOE Governor Mark Carney will speak in London. He may have to refer to the embarrassing revelation that the Bank of England is secretly planning for Britain’s exit from the European Union. “Project Bookend” was accidently delivered to an editor at The Guardian newspaper and was also kept from many of the BOE’s stuff. Market volatility is expected.
- New Zealand rate decision: Wednesday, 21:00. The Reserve Bank of New Zealand maintained rates at 3.5% in April, in light of the rising uncertainties in Europe, China and Australia as well as, domestic dependence on accommodative monetary settings. However, the massive decline in world oil prices is expected to boost growth since Crude oil prices are almost 50 percent below their July 2014 level. Inflation remains low but is expected to pick up gradually. The Reserve Bank of New Zealand is expected to maintain rates in June but many expect a cut later this year.
- Australian employment data: Thursday, 1:30. Australia’s unemployment rate in April increased mildly as expected, reaching 6.2%, after a fall of 2,900 positions in April. The unemployment in Australian remains above 6% in the last 11 months indicating sluggish growth in the Australian job market. Full-time employment decreased by 21,900, while part-time employment increased by 19,000. Australian employment market is expected to add 15,200 jobs while the unemployment rate is forecasted to remain at 6.2%.
- US Retail sales: Thursday, 12:30. U.S. retail sales remained flat in April amid reduction in purchases of automobiles, indicating the US economy is struggling to get back on track after sluggish growth in the first quarter. Hopes for a strong rebound in the second quarter are fading in light of this weak release as well as other economic indicators. Retail sales excluding automobiles, inched 0.1%, while expected to rise 0.4%. The lukewarm data suggests the Fed will not hurry to raise rates anytime soon. Analysts expect U.S. retail sales to edge up 1.1% and forecast core sales to rise 0.7%.
- US Unemployment claims: Thursday, 12:30. The number of Americans applying for unemployment benefits declined unexpectedly last week to 276,000, remaining below 300,000 for the 13th week. The four-week average moved up 2,750 to 274,750. The relatively small number of employment seekers indicates improved job security. Economists hope for a solid job gain in May. Job growth remained strong despite temporary setbacks, suggesting employers were not deterred by the slowdown in the first quarter. The number of claims is expected to reach 277,000 this week.
- US PPI: Friday, 12:30. U.S. producer prices resumed their descent in April as energy prices continued to decline. Producer price index fell 0.4%, falling for the third time this year after rising 0.2% in March. In the 12 months through April, producer prices fell 1.3% the biggest decline since 2010. The 0.7% drop in finished goods was the major cause for the decline in the PPI. Economists forecast a 0.4% rose in Producer prices this time.
- US UoM Consumer Sentiment: Friday, 14:00. The University of Michigan’s survey showed Consumer sentiment declined in May to 90.7 from 95.9 in April, the lowest reading since November 2014. Consumers were more concerned about current economic conditions as well as the future. However, the Conference Board, a business group, reported that its index of consumer moral showed mild improvement in May. From 94.3 to 95.4. Nevertheless, The Michigan index is well above last year’s 81.9 indicating a pickup in consumption. Consumer sentiment is expected to grow to 91.3 in June.
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Sergey Golubev, 2015.06.06 18:18
Why EURUSD May Not Reach Parity Any Time Soon (based on actionforex article)
Technical Developments to Watch:
- EUR/USD still below key trend line resistance at 1.1380
- GBP/USD testing key support at 1.5190
- USD/JPY at a 13-year high, bias bullish above 124.15
- NZD/USD in play, potential for another leg lower if RBNZ cuts rates
- EURUSD exploded higher early last week before but gave back most of its gains on Thur. & Fri.
- MACD and Slow Stochastics show balanced, two-way trade
- Key support sits in the mid-1.0800s
EURUSD had a rollercoaster ride of a week, spiking nearly 500 pips trough-to-peak before giving back over 300 pips in the wake of Friday's strong NFP report. Meanwhile, both the MACD and Slow Stochastics are now in neutral territory, signaling balanced, two-way trade. Traders are clearly trying to sort out last week's volatile price action, but from a longer-term perspective, the one-year bearish trend line perfectly capped last week's rally, so we're inclined to give the bears the benefit of the doubt as long as EURUSD holds below 1.1380.
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Sergey Golubev, 2015.06.07 07:14
EUR/USD Weekly Fundamental Analysis, June 8 -12, 2015 -Forecast (adapted from fxempire article)
The dollar got a lift on Friday as official data showed US businesses accelerated hiring and raised wages at a faster pace last month in a fresh sign the country’s economy is rebounding from the winter stall.
In a report that gives the Federal Reserve more reason to move toward an interest rate hike in the coming months, the Labor Department said Friday that the economy pumped out 280,000 jobs in May, far more than expected and well above the past year’s pace of 251,000 a month.
Meanwhile, the euro was down over 1 percent against the U.S. dollar as Greek debt crisis intensified.
Athens failed to repay a 300 million euros (333 million U.S. dollars) loan installment to the International Monetary Fund (IMF) Friday. On Thursday, the central bank of Greece formally requested the IMF to “bundle” its four payments due to the IMF this month amounting to approximately 1.5 billion euros (about 1.67 billion U. S. dollars) into one.
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Sergey Golubev, 2015.06.07 13:13
USD, EUR, JPY, GBP, AUD: Outlooks For The Coming Week - Morgan Stanley (based on efxnews article)
"EUR: Draghi Gives EUR Legs. Bearish.
The ECB did not push back against higher yields in the Euro Area, which could offer some near term support to EUR on the crosses. Should risk appetite fade, this could bolster EUR even further, as many European equity holdings are currency hedged, and therefore short EUR positions would need to be bought back as equities were sold. Once this positioning becomes clearer, we would look to sell EUR, as our medium term view on EUR has not changed."
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Sergey Golubev, 2015.06.07 18:21
EUR/USD forecast for the week of June 8, 2015, Technical Analysis (based on fxempire article)
The EUR/USD pair initially rallied during the course of the week, but then pullback in order to form a massive shooting star like candle. However, we broke the top of the hammer from the previous week, and did stay above there. Because of that we feel that there is bullish pressure underneath, and that this market will continue to go higher. We have no interest in selling from a longer-term perspective, but recognize that short-term buyers will probably continue to come back into this market again and again. If we can get above the 1.15 level, we are long-term buyers.
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Sergey Golubev, 2015.06.08 10:13
Skandinaviska Enskilda Banken (SEB Group) - Intraday Outlooks For EUR/USD, EUR/GBP and Gold (based on efxnews article)
EUR/USD: Bearish end to last week. The sought bid areas(1.1175 & 1.1113) were both passed after the stronger than expected NFP. The decline also made the pair end the week below the weekly mid body point (of the falling benchmark candle a fortnight ago) 1.1233 hence keeping weekly downside pressure intact (a lower high this week and the correction should be completed). In the hourly graph a bearish triangle has been created since the low point Friday afternoon so more selling should be in the pipeline.
EUR/GBP: Lower within the triangle. After having stalled and turned lower at the 78.6% Fibo point the pair on Friday accelerated the decline (that primarily should be targeting 0.7127 (78.6% of the recent advance). Below 0.7253 more supply is expected to hit the market.
Spot Gold: Targeting 1,153 next. Buyers responded to weekly losses before the closing bell rang on Fri, but with a medium-term "B-wave low" taken out the downside potential just increased and a short-term "Equality point" at 1.153 acts as primary attraction/resistance to explore. Lower targets at 1,143/38 also exist at least as long as not moving back over 1,204.
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Sergey Golubev, 2015.06.08 15:51
Obama and better German data help the common currency (based on forexlive article)
"The EURUSD has pushed higher in early NY trading. The pairs bullishness
is being attributed today to reports from a French official that Pres.
Obama told delegates that the strong dollar posed a problem. The White
House denied the report. Better German industrial production and a
higher trade surplus may have also contributed to better tone in the
European's common currency. The stronger US employment report has been
taken off the front pages for the time being."
"So the bulls are in control. The 100 hour MA is being pushed. The 50%
looms above. Look for sellers on a test, but sellers will have to show
that they can take back control in this EURUSD bullish day. That means
moving back below those levels which were resistance. The 100 hour MA,
the 38.2% retracement at 1.11749 will be the first levels to go below
and stay below if the sellers are to take back control."
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Sergey Golubev, 2015.06.08 19:35
Forex technical analysis: A quick look at some of the major currency pairs (based on forexlive article)
EURUSDThe EURUSD traded at 1.1220 right before the employment report on Friday. It is back at that level and in fact now breaking to new day highs. The NY session has seen the price extend above the the London morning high at 1.1177. The price low after breaking above that level briefly traded at 1.1175. The buyers remain in control with potential up to 1.1253 on more of a squeeze.
The GBPUSD has been up and down (or down and up) in trading today. The last move was down and that move tested the 50% midpoint and the 200 bar MA on the at the 1.5262. On Friday, the pair successfully held the 50% of the move up from the April low to the May high at the 1.5191 level. That, along with the 50% and the 200 bar MA on the 5 minute chart has the buyers with the edge.
The USDJPY is trading below the 125.00 level and looks toward the 50% of the move up from last weeks lows at the 124.80
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Sergey Golubev, 2015.06.09 09:37
China Inflation Slows To 1.2% In May (based on rttnews article)
Consumer prices in China were up 1.2 percent on year in May, the National Bureau of Statistics said on Tuesday.
That was slightly below expectations for 1.3 percent, and it was down from 1.5 percent in April.
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EURUSD M5: 38 pips price movement by CNY - CPI news event
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Sergey Golubev, 2015.06.09 15:04
Société Générale - EUR/USD: Market's Amnesia (based on efxnews article)
"With the breakdown of Euro Area GDP data and US Jolts figures the ‘highlight’ of today’s economic news, the FX market will go on watching bonds. There is no catalyst for EUR/USD to fall back unless amnesia fades and we remember the implications of the US data. That seems unlikely, whereas stronger German labour cost data is yet another sign of stirrings in the heart of the Euro area."
"The technical folks tell me that it takes a close above 1.1315 to signal a test of the March 1.1470- high. The Bund/Treasury spread tells me there’s a fair chance of that happening."
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Daily price is on primary bullish with the secondary correction which just started on D1 bar on Friday. The price is located above Ichimoku cloud/kumo, and Chinkou Span line is crossing the price from above to below for good possible breakdown.
D1 price - primary bullish with secondary correction:W1 price is on bearish market condition with secondary ranging between 1.0520 (W1) support level and 1.1466 (W1) resistance level
MN price is on ranging bearish with 1.0461 support level
If D1 price will break 1.0818 support level on close D1 bar so the price will be fully reversed to the primary bearish market condition.
If D1 price will break 1.1379 resistance level so the bullish trend will be continuing
If not so the price will be on ranging between 1.0818 and 1.1379 levels
SUMMARY : correction within the bulluish trend with possible reversal to the bearish
TREND : bullish