EURUSD Technical Analysis 2015, 27.09 - 04.10: between bearish and bullish waiting for direction
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Sergey Golubev, 2015.09.27 08:48
Forecast for the Week - levels for EUR/USD by Morgan Stanley (based on efxnews article)
Fundamentals for EUR/USD: neutral. "Draghi and other ECB members were unable to provide new information on policy tools they could use, so the EUR weakness (as markets priced in a deposit rate cut) was limited. This was followed by back-to-business for the EUR and its inverse correlation with risk appetite. As markets continue to be worried about global growth, especially in the emerging markets, the EUR will likely continue to see support. The stronger trade is to buy EUR/GBP as opposed to EUR/USD."
Technicals for EUR/USD: ranging within intermediate levels with breakdown expectations. This pair is
on bearish ranging condition since end of March this year to be moved within 1.1713 resistance and 1.0847 support level. If the price breaks 1.1016 support from above to below so the next bearish targets will be 1.0847 and 1.0461. By the way, if the price breaks 1.1713 resistance from below to above so the next real target will be 1.2069 in this case. The trend line of symmetric triangle pattern may be broken by the price to below at 1.1016, and if so - we may see the good breakdown for this week up to 1.0847 target. Thus, the expectation for bearish breakdown for EUR/USD is very high and the breaking 1.1016 support level is the most likely scenario for this week for example.
| Resistance | Support |
|---|---|
| 1.1713 | 1.1016 |
| 1.2069 | 1.0847 |
| N/A | 1.0461 |
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Sergey Golubev, 2015.09.26 07:57
Forex Weekly Outlook Sep 28 - Oct 2 (based on forexcrunch article)
A turbulent week has seen the dollar dive but recover quite nicely. US Consumer Confidence, ADP jobs release, Canadian GDP, Janet Yellen’s speech, and a buildup to the highly important US monthly jobs report are the highlights of this week. Here is an outlook on the market movers on Forex calendar.
The dollar suffered for while, on unimpressive durable goods orders. The pain was especially strong against the euro, that received only normal dovish words from Draghi. Yet the fate changed as Yellen surprised with a hawkish tone, stressing that a 2015 hike is certainly on the cards. The final GDP estimate for the second quarter in the US beat forecasts with a better than expected reading of 3.9% annual growth. Elsewhere, the Aussie struggled with another weak Chinese figure and USD/CAD reached an 11 year high, yet these commodity currencies recovered.
- William Dudley speaks: Monday, 12:30. William Dudley, president of the New York Federal Reserve will give an interview for the Wall Street Journal and talk about the rate hike issue and about inflation expectations. In his former talks, Dudley spoke against a rate rise in September amid international and financial market developments, but noted he hopes the Fed will still raise rates this year. Market volatility is expected.
- US CB Consumer Confidence: Tuesday, 14:00. U.S. consumer confidence edged up in August, rebounding after a sharp fall in July. The Conference Board consumer confidence index increased to 101.5 from a revised 91.0 in the prior month mainly due to an improved view of the labor market. Current conditions were more favorable in terms of the job market viewing jobs as “plentiful” increased from 19.9% in July to 21.9% in August. Those who viewed jobs as “hard to get” decreased from 27.4% in July to 21.9% in August. Analysts believe the strong reading will support stronger consumer spending in the following months. US consumer confidence is expected to reach 96.2 this time.
- US ADP Non-Farm Payrolls: Wednesday, 12:15. The U.S. private sector continued to increase the pace of hiring in August, despite global financial market turmoil. The ADP Report showed private payrolls increased 190,000 from 177,000 in July. The reading was below economists’ expectations but was in line with the growth trend of the first seven months of this year. Furthermore, strong data from manufacturing and domestic activity show a pick-up in economic activity. Economists expect ADP release will show a 191,000 job gain.
- Canadian GDP: Wednesday, 12:30. Canada’s economy expanded 0.5% in June, after a 0.2% contraction in the previous month. However, this positive reading could not offset the negative growth in the second quarter as a whole. On an annualized basis, the economy shrank 0.5% in the April-to-June period, following 0.8% annual pace contraction in the first three months of 2015. Policymakers were concerned about the possibility of a recession, but recent data suggests a growth trend in the third quarter. Canadian GDP for July is expected to reach 0.2%.
- Janet Yellen speaks: Wednesday, 19:00. Federal Reserve Chair Janet Yellen is scheduled to speak in St. Louis. Following the important Fed meeting in September where the Federal Reserve postponed the rate hike move, Fed Chair Janet Yellen said the U.S. central bank is still prepared to raise interest rates this year for the first time in nearly a decade. Yellen said that recent inflationary weakness is temporary, caused by a strong dollar and low oil prices, which are likely to pass. She said U.S. economic prospects appear solid suggesting a rate hike is near. Market volatility is expected.
- US Unemployment Claims: Thursday, 12:30. The number of applications for unemployment benefits, filed last week, rose less than expected, reaching 267,000, indicating the growth trend in the US economy continues. Economists expected the number of claims to reach 268,000. The four-week moving average dropped by 750 to the lowest level in more than a month, reaching 271,750. The number of people continuing to receive jobless benefits was little changed at 2.24 million. The number of new claims is expected to rise to 273,000 this week.
- US ISM Manufacturing PMI: Thursday, 14:00. The U.S. manufacturing sector expanded at the slowest pace since May 2013, reaching 51.1 after posting 52.7 in July. New orders fell 4.8% to 51.7, also the lowest level since May 2013. The employment index declined to 51.2 from 52.7 in July. The weak employment reading indicates a mild slowdown in factory payroll gains in August. Economists expect manufacturing PMI to reach 51.3 in September.
- US Non-Farm Payrolls: Friday, 12:30. U.S. job growth moderated in August, but the unemployment rate declined to a near 7-1/2-year low while wages increased. Nonfarm payrolls increased 173,000 in August after an upwardly revised addition of 245,000 jobs in July. August’s increase was the smallest in five months amid job loss in the manufacturing sector. Despite the mixed report, the general trend remains positive indicating that the U.S. economy remains strong. Analysts expect a jobs gain of 202,000 in September with an unemployment rate of 5.1%. Monthly wages are expected to rise by 0.2%.
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Sergey Golubev, 2015.09.28 07:53
What To Expect Into This Week: US NFP - Barclays (based on efxnews article)
"We expect, in line with consensus, an increase of 200k in the headline number (190k for the private payroll), a steady unemployment rate of 5.1%, and a 2.4% y/y increase in wages. We see these figures as robust indicators of tighter labor market conditions and supportive of inflation in the months to come."
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2015-10-02 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Non-Farm Employment Change]
- past data is 173K
- forecast data is 202K
- actual data is n/a according to the latest press release
if actual > forecast (or previous data) = good for currency (for USD in our case)
[USD - Non-Farm Employment Change] = Change in the number of employed people during the previous month, excluding the farming industry. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
==========
EURUSD M5: 100 pips ranging price movement by USD - Non-Farm Employment Change news event:
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Sergey Golubev, 2015.09.28 13:52
Trade Ideas For EUR/USD by UBS (based on efxnews article)
EUR/USD: "it is range-bound for now. After Janet Yellen's remarks last week it appeared that the US dollar would strengthen further, but sentiment changed ahead of the weekend, with the market closing some positions. That should not affect the overall situation though, and we prefer buying EURUSD on dips."
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Sergey Golubev, 2015.09.28 17:37
Bullish intra-day reversal based on negative data for Pending Home Sales news event (adapted from realtor.org article)
The price for EUR/USD M5 timeframe broke 100-SMA and 200-SMA from below to above together with symmetric triangle pattern and stopped below 1.1234 resistance level. The price was reversed from the bearish to the bullish market condition because of negative data for Pending Home Sales news event. If this level is broken so the bullish trend will be continuing on this timeframe.
"Pending home sales retreated in August but remained at a healthy level of activity and have now risen year–over–year for 12 consecutive months, according to the National Association of Realtors®. A modest increase in the West was offset by declines in all other regions."
"The Pending Home Sales Index, a forward–looking indicator based on contract signings, decreased 1.4 percent to 109.4 in August from 110.9 in July but is still 6.1 percent above August 2014 (103.1)."
"Lawrence Yun, NAR chief economist, says even with the modest decline in contract signings, demand continues to outpace housing supply and elevate price growth in numerous markets. "Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget," he said. "Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago."
As to the GOLD (XAU/USD) so M5 price was on bear market rally within the primary bearish market condition for trying to break 100-SMA to come to the ranging area of the chart. The key 'reversal' resistance for this timeframe is 1135.28, and if the price breaks this level so we may see the ranging condition with the good possibility to the bullish reversal in the near future.
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Sergey Golubev, 2015.09.29 12:19
EUR/USD Fundamentals - Non-Farm Employment Change Forecast by Credit Suisse (based on efxnews article)
Credit Suisse made a fundamental forecast for the high impacted news events which will be on Friday: Non-Farm Employment Change:
"We project Friday’s payrolls to show +195k jobs in
September (consensus), up from last month’s +173k, due to strong growth
in the construction and service producing sectors. Unemployment is forecasted to remain at 5.1%
in line with consensus, while average hourly earnings should increase
0.2% (consensus 0.2%), taking the year over year figure to 2.4%, its
highest point since August 2009."
2015-10-02 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Non-Farm Employment Change]
- past data is 173K
- forecast data is 202K
- actual data is n/a according to the latest press release
If actual data > forecast or previous data = good for currency (for USD in our case)
[USD - Non-Farm Employment Change]= Change in the number of employed people during the previous month, excluding the farming industry.
Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
==========
As we see - Credit Suisse estimated for NFP to be 195K against 202K forecast and
173K previous data. It means that we should expect the bullish condition
in short term situation during and immediate after this news event on
Friday.
==========
EURUSD M5: 100 pips ranging price movement by USD - Non-Farm Employment Change news event:M5 chart
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Sergey Golubev, 2015.09.30 08:20
FX Signals by RBC (based on efxnews article)
- "In the absence of a significant rally in US equities today,
our model will suggest buying USD against GBP, AUD, CAD and NOK at the
NY close today."
- "On the last trading day of August, the model’s signals were all long USD and the return was +0.2%."
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Sergey Golubev, 2015.09.30 18:41
Trading ideas for EUR/USD by UBS Group (based on efxnews article)
UBS described some trading strategies which may be used for EUR/USD in short and medium term situation:
EUR/USD: "the pair has had a slow week so far with no clear direction and we should see more of the same ahead of Friday's US payrolls. Keep playing the intraday moves and only get involved on the extremes. Month-end moves might provide some opportunities today, but overall we think that the 1.1000-1.1400 range is the new 1.0800-1.1200."
As we see - UBS changed the key s/r range from 1.1000/1.1400 to 1.0800/1.1200 expecting the more bearish in medium term. The price will be ranging within the following key support/resistance levels:
- 1.1295 resistance level located near above 200 day SMA, and
- 1.0847 support level located far below 200 day SMA in the primary bearish area of the chart.
On the weeky point of view - it means that symmetric triangle pattern will be broken from above to below for 1.0847 as a nearest bearish target.
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Sergey Golubev, 2015.10.02 08:56
EUR/USD: Monitor Key Levels - UOB (based on efxnews article)
United Overseas Bank expects sideways trading within 1.1145 and 1.1245 which means the following:
- the price will be ranging between 1.1245 resistance level located on 100-SMA/200-SMA on the border between the primary bearish and the primary bullish on the chart, and
- 1.1145/1.1143 support level located below 100-SMA/200-SMA in the primary bearish area of the chart.
According to UOB - EUR/USD pair is on ranging market condition for waiting for direction:
"EUR continues to trade in a listless manner and at this stage, we still prefer to hold a neutral view. Only a clear move beyond the key levels of 1.1085 or 1.1295 would suggests the start of a directional movement in the coming weeks."
| Resistance | Support |
|---|---|
| 1.1245 | 1.1145 |
| 1.1295 | 1.1085 |
Thus, intermediate support/resistance levels are 1.1145 and 1.1245, and key reversal directional levels for today and for the coming week are 1.1085 and 1.1295.
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Sergey Golubev, 2015.10.02 13:07
What To Expecе From US NFP - review (based on efxnews article)
- Goldman: "We forecast nonfarm payroll growth of 215k in September, above consensus expectations of 200k by about 0.3 standard deviations of a typical surprise. Labor market indicators were mixed in September, and we therefore expect a print roughly in line with the 212k monthly average seen so far in 2015. We also expect a substantial upward revision to August payrolls. Since 2003, the five industries with the clearest August bias have had an average August deceleration of 40k relative to the prior three months and a subsequent upward revision of 35k. This year, these industries decelerated by a combined 56k, and the deceleration excluding government payrolls was 83k. We expect the unemployment rate to remain at 5.1% in September from an unrounded 5.11% in August, but it’s a close call... At 5.1%, the unemployment rate is currently twotenths above the FOMC’s estimate of the longer run or “structural” rate."
- Morgan Stanley: "The release of weak US manufacturing data should not take our focus away from stronger US domestic demand conditions and labour market strength. Our colleague, Ted Wieseman, ranked as the top NFP forecaster by Bloomberg, estimates a 190k NFP rise, which is below the 201k consensus call, but sufficiently strong for the Fed to hike in December. With rates markets underpricing a December hike and given our more risk friendly near-term outlook, we have identified USDCHF longs as the best FX vehicle to play for higher US rates."
- BofA Merrill: "The labor market likely added 190,000 jobs in September, following the recent trend. Based on our forecast, the three-month average will slow to 204,000 but the six-month will increase to 217,000. The unemployment rate should hold steady at 5.1% while average hourly earnings increase 0.2% mom. This would be the third consecutive solid gain on a monthly basis, therefore translating to a 2.4% yoy rate. Plugging in a 0.2% mom gain for the remaining months of the year would leave wages up 2.7% yoy in December."
- Deutsche Bank: "We expect a modest rebound in September nonfarm payroll growth (200k), following a lackluster August gain, which may be revised higher. Recall that we had expected a weak August payroll print going into the report, because. we had noticed a historical tendency for August payrolls to disappoint. In similar fashion, there has been a trend of upward revisions to August payroll gains. This has been the case in each of the last five years as August payrolls have been revised up by an average of 79k...We expect average hourly earnings (AHE) to rise +0.2%, which would have the effect of raising the yearover-year growth rate two tenths to 2.4%. If this is the case, it will mark the highest growth rate since August 2009 (2.4%)...DB sees unemployment rate unchanged at 5.1%."
==========
2015-10-02 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Non-Farm Employment Change]
- past data is 173K
- forecast data is 202K
- actual data is n/a according to the latest press release
if actual > forecast (or previous data) = good for currency (for USD in our case)
[USD - Non-Farm Employment Change] = Change in the number of employed people during the previous month, excluding the farming industry. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
==========
EURUSD M5: 100 pips ranging price movement by USD - Non-Farm Employment Change news event:
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Daily price is on ranging market condition located between bearish and bullish area of the chart with the following key support/resistance levels:
Intermediate s/r levels for this pair on the way to the key s/r are the following: 1.1459 bullish resistance and 1.1016 bearish support level.
D1 price - ranging:
If D1 price will break 1.0847 support level on close D1 bar so we may see the bearish market condition.
If D1 price will break 1.1713 resistance level so the bullish trend will be continuing.
If not so the price will be on ranging between the levels.
SUMMARY : ranging
TREND : waiting for direction