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Forecast for Q2'16 - levels for EUR/USD - page 10

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Sergey Golubev, 2016.06.10 10:02

EUR/USD Fundamentals: U.K. Goods Trade Balance and 22 pips price movement

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2016-06-10 07:00 GMT | [EUR - German Buba President Weidmann Speaks]

[EUR - German Buba President Weidmann Speaks] = The speech about monetary, financial, and fiscal stability at the Bundesbank Spring Conference, in Germany.

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  • "The financial crisis has shown in no uncertain terms that the transmission of monetary policy depends heavily on financial market conditions. When the financial markets were disrupted in autumn 2008 after the collapse of Lehman Brothers, the traditional interest rate pass-through of our conventional monetary policy measures was obviously hampered."
  • "But even today, the effectiveness of our monetary policy depends on financial market conditions. This can be illustrated, for example, by the role asset managers play in how non-standard monetary policy measures impact on longer-term interest rates."
  • "A recent initiative by the Bank of England is pushing for the introduction of standardised GDP-linked bonds. By tying coupon payments, and potentially the principal as well, to a country’s growth rate, investors share both the upside and the downside risk of a country’s economic development. That way, a country can potentially retain fiscal space even when faced with adverse economic events. GDP-linked bonds exhibit equity-like features, which of course gives rise to questions as well."
  • "The euro area still has a long way to go, especially with regard to fiscal policy. Unfortunately, the spill-over from monetary policy – savings through lower interest expenses – has not been used as much as it could to press ahead with improving public budgets."

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EUR/USD M5: 22 pips price movement by German Buba President Weidmann Speaks news event


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EUR/USD Intra-Day Technicals: ranging near bearish/bullish reversal for direction

H4 price is located near 200 period SMA waiting for the direction for the bearish or bullish trend to be started. There are 3 main scenario for H4 price movement for today:

  • the price breaks 1.1414 resistance to above for the bullish trend to be resumed;
  • the price breaks 1.1289 support level to below for the bearish reversal to be started;
  • the price will be on ranging market condition within the levels waiting for direction.
Resistance
Support
1.13651.1289
1.14141.1097


  • Recommendation to go short: watch close H4 price to break 1.1289 support level for possible sell trade
  • Recommendation to go long: watch close H4 price to break 1.1414 resistance level for possible buy trade
  • Trading Summary: ranging
SUMMARY : ranging for direction

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Sergey Golubev, 2016.06.13 10:24

EUR/USD Price Action Analysis - bullish ranging near 50.0% Fibo level for the secondary daily correction to the possible bearish reversal

Daily price is above 200 SMA and near-and-above 100 SMA for the bullish market condition with the ranging within Fibo resistance level at 1.1415 and Fibo bearish reversal level at 1.1070.

  • The price is testing 50.0% Fibo support level at 1.1245 to below for the secondary correction to be started with 1.1070 level as a next target for the bearish reversal.
  • "The Euro reversed sharply lower against the US Dollar, producing the largest two-day losing streak in nearly four monthsafter finding resistance above the 1.14 figure. Prices have now erased over half of the advance triggered by May’s soft US jobs data."
  • "From here, a daily close below support at 1.1217, the 38.2% Fibonacci expansion, opens the door for a test of the 1.1145-56 area marked by a rising trend line set from December 2015 and the 50% level. Alternatively, a reversal above the 23.6% Fib at 1.1293 paves the way for a test of the 14.6% expansion at 1.1340."
  • "An actionable trade setup appears to be absent at this time. On one hand, prices are too close to support to justify entering short from a risk/reward perspective. On the other, the absence of a discrete bullish reversal signal suggests taking up the long side is premature. Waiting on the sidelines appears to be prudent."


Resistance Support
1.14151.1245
1.16151.1070

If the price will break Fibo support level at 1.1070 so the reversal of the price movement from the primary bullish to the primary bearish market condition will be started.
If the price will break Fibo resistance level at 1.1415 from below to above so the primary bullish trend will be continuing with good possible breakout of the price movement up to 1.1615 as a possible bullish target.
If not so the price will be ranging within the levels.

Trend:

D1 - ranging bullish near bearish reversal area

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Sergey Golubev, 2016.06.14 14:48

EUR/USD Intra-Day Fundamentals: U.S. Retail Sales and 10 pips price movement

2016-06-14 12:30 GMT | [USD - Retail Sales]

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - Retail Sales] = Change in the total value of sales at the retail level.

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CNBC reported:

  • "U.S. retail sales rose more than expected in May as Americans bought automobiles and a range of other goods, suggesting economic growth was gaining steam despite a sharp slowdown in job creation."
  • "The Commerce Department said on Tuesday retail sales increased 0.5 percent last month after surging by an unrevised 1.3 percent in April. It was the second straight month of gains and lifted sales 2.5 percent from a year ago."

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EUR/USD M5: 10 pips price movement by U.S. Retail Sales news event



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Sergey Golubev, 2016.06.15 15:57

Trading News Events: Federal Open Market Committee Interest Rate Decision (adapted from the article)


  • "Even though the Federal Open Market Committee (FOMC) is widely anticipated to preserve its current policy in June, the updated economic projections coming out of the central bank may drag on the greenback and spark a near-term rebound in EUR/USD should Chair Janet and Co. curb their outlook for growth and inflation."
  • "As expected, the Federal Open Market Committee (FOMC) once again voted 9 to 1 to retain the current policy in April, with Kansas City Fed President Esther George dissenting against the majority for a 25bp rate-hike. The FOMC continued to promote a wait-and-see approach as ‘market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months,’ and the central bank may look to buy more time as they wait for a ‘further improvement in labor market conditions and a return to 2 percent inflation.’ More of the same from the FOMC sparked a choppy market reaction, with EUR/USD pulling back from the 1.1350 zone to end the day at 1.1319."

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EURUSD D1: secondary correction to the possible ranging bearish reversal. The daily price is located above 200 SMA for the bullish market condition: the price is breaking 100 SMA together with 61.8% Fibo support level at 1.1203 to below to be reversed from the primary bullish to the ranging market condition. The bearish reversal level is 1.1070 located near 200 SMA so if the price breaks this level to below - the bearish reversal will be started. Alternative, if the price breaks 1.1415 resistance to above so the bullish trend will be resumed.


Anyway, the RSI indicator is estimating the secondary correction to be continuing for the price to the ranging zone.


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Sergey Golubev, 2016.06.15 20:25

EUR/USD Intra-Day Fundamentals: Federal Funds Rate and 33 pips range price movement

2016-06-15 18:00 GMT | [USD - Federal Funds Rate]

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - Federal Funds Rate] = Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight.

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"Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation."

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EUR/USD M5: 33 pips range price movement by Federal Funds Rate news event



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Sergey Golubev, 2016.06.16 08:54

Traders are left to wonder how many times the Fed may hike rates in 2016, if at all (adapted from the article)

  • "On Wednesday afternoon, the Federal Reserve’s Open Market Committee said it would keep short term interest rates at 0.25%-to-0.50% as it continues to monitor the U.S. labor market, inflation indicators, and global economic developments. During a question and answer session, Federal Reserve chair Janet Yellen said Britain’s upcoming vote on whether to stay in the European Union factored into the FOMC’s decision to stay on hold." "It is certainly one of the uncertainties we discussed," Yellen said.
  • Brexit is a "decision that could have consequences for economic and financial conditions in global financial markets," she added said, while noting a decision to leave the E.U. could have consequences for the United States "that would be a factor in deciding on the appropriate path of policy."
  • "The pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up,” the FOMC said, in a statement released at the end of it two-day June meeting. “The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation," it added.
  • "The FOMC expects only “gradual” increases in the federal funds rate and it continued to note that the actual path of rate increases will remain data dependent."

From the technical points of view - the EUR/USD H4 price was bounced from 1.1189 bearish support level by 100 SMA level breaking to above: the price is testing Tuesday's high at 1.1297 to be reversed to the bullish market condition.


If the price breaks 1.1297 resistance on close H4 bar so the reversal of the intra-day price movement from the bearish to the primary bullish market condition will be started.
if the price breaks 1.1189 support to below so the primary bearish trend will be resumed.
If not so the price will be ranging within 100 SMA/200 SMA ranging reversal area for direction.




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Sergey Golubev, 2016.06.16 11:00

Trading News Events: U.S. Consumer Price Index (CPI) (adapted from the article)

"The U.S. Consumer Price Index (CPI) increased an annualized 1.1% in April following the 0.9% expansion the month prior, while the core rate of inflation narrowed to 2.1% from 2.2% during the same period. A deeper look at the report showed transportation costs climbing another 0.7% on the back of higher energy prices, which was accompanied by a 0.2% rise in food costs, while prices for apparel slipped 0.3% in April. The U.S. dollar struggled to hold its ground following the slowdown in core inflation, with EUR/USD bouncing back from the 1.1300 handle to end the day at 1.1309."

What’s Expected:



EUR/USD H4: bearish ranging near bullish reversal. The H4 price is located inside Ichimoku cloud for the ranging market condition waiting for the direction of the trend to be established. Ascending triangle pattern was formed by the price to be crossed to above for the possible bullish reversal, and Absolute Strength indicator together with Trend Strength indicator are estimating the possible bullish trend to be started in the near future.



If H4 price breaks 1.1298 resistance level to above so the reversal of the price movement from the ranging bearish to the primary bullish market condition will be started: the price will cross uppper Senkou Span line to below.
If H4 price breaks 1.1188 support level to below so the primary bearish trend will be resumed.
If not so the price will be on bearish ranging condition.

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EUR/USD M5: 14 pips price movement by U.S. Consumer Price Index news event



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Sergey Golubev, 2016.06.21 10:07

EUR/USD: Targets on Brexit or Bremain (adapted from the article)

Brexit
"EUR to quickly follow GBP lower on Brexit: we believe that a sharp fall in GBP under Brexit could quickly spill-over to a similar-sized sell-off in EUR/USD and which could see parity tested within days of a Brexit referendum outcome."

Bremain
"Dual EUR/USD upside from ‘Remain’ but still a range trade: under our continued, albeit not high-conviction, assumption that the UK elects to say in the EU, global risk sentiment will undoubtedly improve. We would judge that EUR/USD should recoup part of the ground lost since early May when EUR/USD briefly traded above 1.16."

Daily price is located above 200 SMA and near-above 100 SMA in the primary bullish area of the chart: the price is on ranging within the following key s/r levels:

  • 1.1097 support level located near 200 SMA on the border between the primary bearish and the primary bullish trend on the chart, and
  • 1.1414 resistance level located above 200 SMA in the primary bullish area.


If the price breaks 1.1097 support level to below on daily close bar so the reversal of the price movement from the primary bullish to the primary bearish market condition will be started.
If the price breaks 1.1414 resistance level to above on daily close bar so the primary bullish trend will be continuing up to 1.1615 level as a possible bullish target.
If not so the price will be on bullish rabnging within the levels.


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Sergey Golubev, 2016.06.21 17:14

EUR/USD Intra-Day Fundamentals: Fed Chair Yellen Testifies and 34 pips price movement

2016-06-21 14:00 GMT | [USD - Fed Chair Yellen Testifies]

[USD - Fed Chair Yellen Testifies] = Testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC.

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The Washington Post:

"Yellen is scheduled to testify before the Senate Banking Committee on Tuesday morning. In prepared remarks, she acknowledged that hiring has dropped off sharply in recent months but also pointed to early signs that wages are beginning to rise after years of stagnation. She said she is “optimistic” that the progress in employment will continue."

"The Fed is responsible for charting the course for the nation’s economy, with the dual mission to keep prices stable and strengthen employment. It does that by adjusting the influential federal funds rate. A higher rate helps curb inflation by making borrowing money more expensive, which discourages spending and investment and reins in economic growth. A lower rate means that money is cheap, stimulating purchases by households and businesses. That helps boost employment and speeds up the economy."

"Because rates are already so low, the Fed has limited room to reduce them further if the economy were to weaken, she said. Moving gradually also gives the central bank time to assess whether its forecast of continued economic improvement will come true."

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EUR/USD M5: 34 pips price movement by Fed Chair Yellen Testifies news event



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Sergey Golubev, 2016.06.22 16:21

EUR/USD Intra-Day Fundamentals: Fed Chair Yellen Testifies and 23 pips price movement

2016-06-22 14:00 GMT | [USD - Fed Chair Yellen Testifies]

[USD - Fed Chair Yellen Testifies] = Testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC.

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From barchart article review:
  • "The British pound firmed in the overnight trade, as Britain’s referendum on European Union membership remains too close to call."
  • "While the uncertainties of the U.K. referendum appear to be a short term negative for the U.K. economic situation, some analysts believe leaving the European Union will actually be a long term positive."
  • "The Canadian dollar and the Australian dollar are higher due to higher crude oil prices. In addition, the Canadian dollar is being supported by news that Canadian retail sales rose .9% in April. The median estimate called for an increase of .8%."

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EUR/USD M5: 23 pips price movement by Fed Chair Yellen Testifies news event



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