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[HotforexNews]

Date : 5th June 2015.

CURRENCY MOVERS OF 5th JUNE 2015.

EURUSD, Daily

EURUSD closed at session lows in relatively thin trade yesterday and is after some recovery currently trading at 1.1268. Greece’s request to defer IMF payments to the end of the month will apparently be approved, and will give Greece some breathing room, as a euro 300 mln payment was originally due on Friday. How Greece will make the payments at the end of the month is anyone’s guess. The FX market surely must be thinking there will be no end to the crisis, and perhaps some smart money is reducing exposure to the single currency.

Eurozone Retail PMI surged higher yesterday. The overall retail PMI for the Eurozone passed the 50 point no change mark in May and rose to 51.4 from 49.5 in the previous month. This was driven mainly by a jump in the German reading to a whopping 55.8 from 52.6 in April. The French reading also improved, but remained below the 50 point mark, as did the Italian reading, which actually dropped slightly. The strong German number confirms that the recovery remains driven largely by consumption and domestic demand, unlike previous recoveries and the question is whether this is sustainable, or like the pre-crisis booms in Spain, Italy and elsewhere mainly fuelled by cheap money.

The US initial jobless claims fell 8k to 276k in the week ended May 30, from a revised 284k in the prior week (was 282k). The 4-week moving average edged up to 274.75k from 272.0k (revised from 271.5k). Continuing claims dropped 30k to 2,196k in the May 23 week, from 2,226k previously (revised from 2,222k). Also, US Q1 productivity was revised down to a -3.1% pace from the -1.9% preliminary print, and versus -2.1% in Q4. The back-to-back declines are the largest since 1993.

I wrote yesterday that EURUSD was trading close to a major resistance and that the upside was getting limited which increases the downside risk. This resulted in EURUSD failing to hold the highs after rallying from the intraday support I mentioned. It also resulted in a daily shooting star candle that confirmed the bearish view in the daily timeframe. At the time of writing the pair is approaching an intraday resistance area around 1.1285. Based on the intraday technical picture it seems that EURUSD is not likely to rise much higher but will react lower and remain weak and eventually it should move to the daily support at 1.1006. This being a Nonfarm Friday markets are prone to avoid strong directional movements before the employment number is out. Also the region of May 22 daily high provides some support EURUSD which is why I don’t expect the pair to move to 1.1006 support today. However, the daily shooting star indicates that this is likely to happen before EURUSD can move higher. A medium term regression channel bottom coincides with the 1.1006 support which suggests that the pair will retain its medium term upward tendency. Daily support and resistance levels are: 1.1208, 1.1006, 1.0887 and 1.1324, 1.1380 and 1.1467.

Currency Pairs, Grouped Performance (% Change)

GBP is weak across the board this morning. GBPAUD turned lower from the resistance yesterday as was expected (see my analysis from yesterday) and GBPUSD rallied yesterday almost to 1.5447 level I identified in my earlier analysis. EUR has wide strength against the other major currencies this morning with EUR moving most against GBP and JPY. EURJPY is moving outside both weekly and daily Bollinger Bands and yesterday’s shooting star raises concerns of the level of commitment by the bulls on this market. The pair is trading near yesterday’s daily highs but as there is no major weekly resistance nearby I would not be interested in selling against the highs. I suggested in my earlier analysis that EURGBP is in a process of creating a market bottom. The recent volatility and the fact that this market has found attracted buyers at major support levels indicates that my view was correct. This has brought the EURGBP near a daily resistance level and it is trading in the Bollinger Bands.

Main Macro Events Today

Eurozone Gross Domestic Product second release for Q1 GDP is due out today but no change in number is expected. In May Q1 data was in line with expectations, with the quarterly growth rate accelerating slightly to 0.4% q/q from 0.3% q/q, in line with our forecast and a tad below our median of 0.5%. There is no breakdown with the preliminary number, but domestic demand was likely the main driver and the national data suggests that growth is broadening and stabilising, despite the deceleration in German growth at the start of the year.

US Nonfarm Payrolls and Unemployment rate: Nonfarm payrolls are expected to increase by 215k, with a 223k private payroll gain. Forecast risk: upward, as depressed claims readings should provide some tail wind. Market risk: downward, as substantial weakness could impact the timing of rate hikes. The unemployment rate is expected to hold steady at 5.4% from April.

Canadian Unemployment Rate: Employment is expected to rebound 20.0k in May after the 19.7k drop in April. Forecast Risk: The dismal 19.7k drop in total jobs during April contrasted with mostly solid details, which we expect to give way to an improvement in overall employment during May. But business confidence remains subdued, suggesting a risk for a May job gain that undershoots our estimates. Market Risk: An as-expected rise in May would not argue against the expected timing and magnitude the Bank sees for the gyrations in Q1 and Q2 GDP, in turn supportive of expectations that the 0.75% policy rate is the floor.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 9th June 2015.

CURRENCY MOVERS OF 9th JUNE 2015.

EURUSD, Daily

EURUSD moved to a five day high (on a closing basis) at 1.1345 this morning bringing last Thursday’s peak at 1.1379 back into scope, with the May-15 peak at 1.1466 just behind. A run of encouraging data, and perky May inflation data, out of the Eurozone has enabled to the euro to hold ground against the dollar, despite the rekindled Fed tightening narrative following the strong May US payrolls report. The forex market is also taking a sanguine view of Greece’s continuing standoff with its creditors at bailout negotiations. There were fresh reports that the European Commission is trying to look into ways to get Greece some alternative funding that doesn’t require a positive bailout review, but even Juncker is increasingly exasperated with Greece’s hostility towards creditors and their offers. As Greece will have to negotiate further funding beyond the remaining monies from the current bailout, the hard line stance taken by Tsipras and Co is a gamble with Greece obviously banking on the fact that foreign ministers and heads of state, as well as the G7 will eventually value Greece’s strategic position in the south-east of Europe and its importance as a Nato partner more than the fact that continuing Eurozone membership will cost taxpayers elsewhere in the Eurozone dearly, and that without solving the country’s underlying problems.

According to ECB’s Liikanen QE could be extended, beyond September 2016 if needed. We have heard this before, but in the current climate it may go some way to dampen the rise in yields although the official commitment to bond buying it counterbalanced somewhat by the central bank’s very relaxed attitude to the rise in long term yields. Bund futures, which fell into negative territory, are slightly up again on the day, but off opening highs.

EURUSD moved on Friday pretty well according to my script. I said in Friday’s report that the pair was approaching an intraday resistance at 1.1285 and that EURUSD is not likely to rise much higher but will react lower and remain weak. I also said that I don’t expect the pair to move to 1.1006 support today. The pair turned lower from 1.1280, remained weak and moved to the south after NFP figures came out with a big surprise. And price never moved to 1.1006 that day.

Now we’ve seen a rally back into the same resistance area that turned the pair lower Thursday last week. The picture is less clear than on Friday as price has reacted lower from the resistance but has since found buyers at the same region that resisted moves higher on Friday. If prices keeps on making lower timeframe higher lows over the next two to three hours it is likely that buyers try to challenges the daily resistance levels again. Should this fail and price move lower from here the next intraday support would be at 1.1178 after which there are no clear support levels before intraday support before 1.1133. The pivotal daily low from Friday is at 1.1050. This range could be target for intraday shorts. However, if price create a lower daily high at current levels it is more likely that serious buyers are looking to buy EURUSD long between 1.0887 and 1.1006. Daily support and resistance levels are 1.1049, 1.1006 and 1.1324, 1.1380.

Currency Pairs, Grouped Performance (% Change)

USD, JPY and EUR strength has been the overall theme for this morning but now we are seeing some change with EUR performance getting a bit more mixed and GBP weakening. AUD has been weak while NZDJPY, AUDJPY and GBPJPY have been among the weakest performers in individual pairs while EURAUD and EURNZD have been strong. NZDJPY is still trading sideways at a daily support and lower Bollinger Bands (20) while AUDJPY is edging closer to pivotal daily candles and the lower end of consolidation range. EURAUD is continuing the uptrend that got boosted when Eurozone core CPI was reported well above expectations at 0.9%.

Main Macro Events Today

Chinese CPI and PPI were released today. CPI fell 0.2% in May from April, below the forecast median of 0.0%, rising 1.2% vs a year-ago May compared to a 1.3% median and 1.5% in April. Food CPI rose 1.6% in May vs a year-ago, while non-food CPI grew 1.0%. PPI sank 4.6% vs year-ago levels, below -4.5% median forecasts, but same as April levels. Overall, this still points to price declines, especially on the producer side, amid ongoing signs of overcapacity and economic slowing.

Eurozone GDP: there was no variation in the actual figures from expectations. Eurozone GDP was expected the second reading of Eurozone Q1 GDP to confirm growth rates of 0.4% q/q and 1.0% y/y respectively. This left the focus on the breakdown but without a major revision, however, the numbers are too backward looking to change the overall outlook for growth and monetary policy.

Swiss CPI for May dipped to a new cycle low of -1.2% y/y, meeting the median forecast and down from April’s -1.1%. The sharp drop into deflation in recent months is largely a consequence of the franc’s 15%-plus appreciation in January when the SNB abandoned its cap. This is troubling to Swiss policymakers, though they will be consoled by last week’s appreciation in EUR-CHF to 10-weeks above 1.0500.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 11th June 2015.

CURRENCY MOVERS OF 11th JUNE 2015.

EURUSD, Daily

Germany may be considering a staggered deal on Greek aid. Greece will apparently be required to commit to at least one economic reform to win partial access to bailout funds. German Chancellor Merkel was reportedly quoted as saying “where there is a will there is a way. The goal is to keep Greece in the euro area”. The ECB has agreed to increase the Emergency Lending Assistance to Greek banks by 2.3 billion euros. According to Bloomberg the ECB is trying to strike a balance between keeping Greek lenders afloat and safeguarding the country’s central bank, which provides the aid, as the government veers toward a debt default. This is the biggest weekly increase since February 18th.

Standard & Poor’s downgraded Greek bonds deeper into junk status, questioning whether Athens can pay its debts. Reuters reported that Tsipras emerged early on Thursday from talks with Chancellor Angela Merkel and President Francois Hollande to express confidence. “We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period.”

EURUSD traded most of the day yesterday below the 1.1380 resistance identified in my previous report with the result that yesterday’s candle formed a shooting star. There was a brief rally above the 1.1380 level yesterday with the pair creating a high print of 1.1386 but it wasn’t sustainable and rally failed. Most of the morning EURUSD was trading in a small range between intraday support and resistance levels. Market was truggling with an intraday resistance and created a shooting star in 60 min resolution after which it headed towards yesterday’s low at 1.1260 and at the time of writing is trading below it at 1.1244. In daily context the pair is trading close to a daily and weekly resistance which suggests that in the daily resolution the line of least resistance is down. The nearest significant daily support and resistance levels are at 1.1049 and 1.1380.

Currency Pairs, Grouped Performance (% Change)

This morning AUD and USD have been strong while almost all currencies are up against JPY and NZD. The NZD rate cut keeps the currency weak while USD strength might be just down to the technical picture of euro, the heaviest weighted currency in US Dollar Index. AUDNZD is the best performer this far today with a performance of approx. 0.80% as it continues a daily trend after breaking out of a sideways range yesterday. Other strong movers are USDPJY (found support yesterday) and AUDJPY that is moving higher after the pair reacted higher intraday from a support.

Main Macro Events Today

RBNZ eased rates 25 bps to 3.25%, surprising expectations for a steady stance at 3.50%. This is the first cut since the 50 bp move in March 2011. The most recent policy shift was a 25 bp hike last July. Governor Wheeler said the action was taken to address low inflationary expectations and the weaker demand. And further easing may be necessary, according to the policy statement. The NZD dropped on the news.

U.S. Retail Sales for May are out today and should reveal a 1.4% (median 1.2%) headline with the ex-autos figure up 1.0%. The big auto sales jump to 17.7 mln from 16.5 mln in April will be a major contributor as will the rebound in gasoline prices that we witnessed over the course of the month.

U.S. Business Inventories for April are due today. The headline should have inventories up 0.2% (median 0.2%) with sales up 0.5% for the month. Data in line with this forecast would leave the Inventory to Sales ratio steady at 1.36 from last month. Retail inventories are expected to be up 0.1% in April.

U.S. Initial Jobless Claims Preview: Claims data for the first week of June will be released on Thursday and should reveal a 280k (median 277k) headline, up from 276k last week. We expect claims to set a 279k average in June, down from a 274k average in May.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 12th June 2015.

CURRENCY MOVERS OF 12th JUNE 2015.

EURUSD, Daily

EURUSD remained week yesterday and the pair closed below the shooting star candle from day before amidst positive US data. Yesterday US retail sales was reported to have surged 1.2% in May, with the ex-auto figure up 1.0%, close to expectations. April’s headline unchanged figure was revised up to 0.2%, and the ex-auto number was left at 0.1%. Sales excluding autos, gasoline, and building materials increased 0.6% versus 0.3% previously (revised from 0.1%). Atlanta Fed boosted its Q2 GDP forecast to 1.9%up from 1.1% previously in the wake of the firm May retail sales report, which was propped up by auto sales and gasoline prices. That closed the gap somewhat with Blue Chip economists, who have a median forecast of around 2.65%. US household net worth rose to $84.9 tln in Q1 from a revised $83.3 tln in Q4 (raised from $82.9 bln), according to the Fed, thanks to rising home values and investment gains. Household debt increased at a 2.2% annual pace, down from a revised 2.8% previously (was 2.7%). Increased returns and lower borrowing is a relatively healthy development for the outlook on consumer spending and dovetails with some of the better contemporary readings on the economy.

U.S. business inventories rose 0.4% in April, with sales up 0.6%, both higher than expected. March’s 0.1% rise in inventories was not revised, but the February gain is now 0.3% from 0.2%. The 0.4% sales increase in March was bumped up to 0.6%, with the 0.2% February drop revised to -0.3%. The inventory-sales ratio was steady at 1.36 and is just a shade below the expansionary high of 1.37 in February. The data are good news for Q2 GDP. US initial jobless claims rose 2k to 279k in the week ended June 6, from a revised 277k in the prior week (was 276k). That brought the 4-week moving average to 278.75k from 275k (revised from 274.75k). Continuing claims were up 61k to 2,265k in the week ended May 30, from a revised 2,204k (was 2,196k). US consumer comfort index sank to 40.1 for the period ended June 7, down from 40.5 the week prior and the lowest reading since November, according to Bloomberg. That’s down about 8-points from an 8-year high in mid-April. Rising gasoline prices contributed to the decline, though wage gains and firmer equities supported household sentiment.

IMF doesn’t see progress on Greece. IMF’s Rice said the IMF has major differences with Greece in key areas and doesn’t see a progress on the way to an agreement with obstacles still including pensions, taxes, financing. Markets have been buying into hopes of a deal with Greece today, but that always seemed premature, considering that comments from most officials continue to stress that talks continue, but also that Greece needs to make more commitments and that there are still differences. Even if there is a bailout extension, it would not solve the problem as any payout of funds still hinges on the implementation of reform commitments that Tsipras is unwilling to subscribe to.

Germany prepares for Grexit, according to a German newspaper Handelsblatt. Tabloid paper Bild meanwhile reported that the government is preparing for default with considerations of capital controls and a haircut on Greek debt. So far it was mainly Tsipras who threatened that a Grexit would mean the beginning of the end for the Eurozone, but after the IMF finally lost patience with the lack of progress in the talks with Greece, the reports suggest that Germany is also not willing to keep Greece in at all costs. A Bloomberg story meanwhile said creditors will give Greece less than 24 hours to come up with a serious counter-proposal to its own reform list. There may not be any real progress, but it seems the beginning of the end to the Greek crisis is finally here, even if it could still go one way or the other.

Today’s data calendar being quite thin EURUSD might not move that much today. Over the next couple of days I think that bias is still to the downside due to the shooting star candle from two days ago. Today’s price action has taken place below Wednesday’s low and yesterday’s low was also below Wednesday’s shooting star low, which is inline with the expectation that EURUSD is likely to remain weak and retest the support 1.1006 to 1.1049 region. The nearest significant daily support and resistance levels are at 1.1049 and 1.1380 while the low from Wednesday has clearly been a resistance today.

Currency Pairs, Grouped Performance (% Change)

Today’s currency mover is AUD which is down by roughly 30 to 40 basis points against everything else but NZD that is weak after the RBNZ cut the rates yesterday in a surprise move. AUDCHF is reacting lower after rallying to a pivotal resistance. The pair is making lower lows and lower highs in a daily chart. GBPAUD has been moving sideways and still trying to push higher through the resistance. EURAUD moved lower yesterday after creating two no-demand candles. AUD weakness is the only clear theme this morning as other currencies’ performance has remained mixed.

Main Macro Events Today

German Wholesale Price Index numbers improved both on m/m and y/y basis. Monthly change in May came in at 0.5% compared to 0.4% in April while the yearly change improved from -0.9% to -0.4%.

US Producer Price Index data for May is out today and should reveal a 0.8% (median 0.4%) headline with the core up 0.1%. After a long run of drops driven by falling oil prices we have now begun to see rebounds which should help lift the PPI headline. The trade price data for May began to reveal this effect with a 1.3% import price increase following a steady string of declines through the winter.

US Michigan Consumer Sentiment: The first release on June Michigan Sentiment is due today and should reveal a decline to 90.0 (median 91.5) from 90.7 in May. The IBD/TIPP poll for the month eased to 48.1 from 49.7 in May. Confidence measures have eased over the Spring as gasoline prices begin to rebound off lows and consumers become accustomed to their new level.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 15th June 2015.

PALLADIUM TRADING AT LOWER WEEKLY BOLLINGER BANDS.

Palladium, Weekly

Palladium has been trading sideways in a wide range since October last year. In the process market has created a lower weekly high and has now moved close to support levels. This suggests that in there is weakness in the long term picture but it doesn’t mean there can’t be short term rallies. Stochastics oscillator is now oversold and price is trading at lower Bollinger bands. This highlights the fact that price trading fairly close to important higher time frame support. Nearest support level is at 723.00 while the 23.6% Fibonacci resistance level at 767 practically coincides with a resistance created by a weekly pivot low 772.10. The fact that this region coincides with a 38.2% Fibonacci level when drawn from the year 2011 low the 2014 high increases its significance as a resistance level.

Palladium, Daily

The daily down trend that has been in force since the beginning of this month has taken Palladium inside a daily pivot near the weekly support level . This has caused the downside momentum to wane a bit and lifted Stochastics oscillator slightly higher. Nearest daily support level at 723 is the same as in the weekly chart. There is some resistance right above the current prices from the sideways moved seen last week. Nearest significant resistance after the sideways move above the 739.35 is at 767.

Palladium, 240 min

Since June 8th the down trend in Palladium has been changing the slope to less bearish (black channel vs. blue and red regression channel lines). A sign that buyers are slowly stepping in and trying to create a reversal as price is getting close to a major support. Stochastics is pointing higher suggesting that price might be actually doing just that. However, there are resistance levels ahead and it probably takes some short term consolidation before price can turn higher. Nearest intraday support level is at 731.32 while the bottom of the sideways range above at 739.35 is likely to act as a resistance. The next more significant resistance level is in the region of 746 to 750 where the 23.6% Fibonacci level, 50 period SMA and the upper Bollinger bands coincide.

Conclusion

Long term picture is a sideways market with a bearish slant to it as price has just recently made lower high and the March low was a lower low especially on a closing basis. The short to medium term picture has potential turn bullish as price has moved close to levels that sent price considerably higher in March. Therefore, we are looking for momentum reversal signals above 723 resistance this week. The daily chart suggests that the short term move has potential to 767 (23.6% Fibonacci level).

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 16th June 2015.

CURRENCY MOVERS OF 16th JUNE 2015.

EURUSD, Daily

EURUSD has been trading sideways for week now and yesterday’s data didn’t have much impact on the pair and it moved only slightly higher in yesterday’s trading. The US NAHB homebuilder sentiment index jumped to 59 in June versus 54 in May and 56 in April. It’s the highest since September. The single family sales index popped to 65 from May’s 58 (revised from 59), the best since 2005. The future sales index rose to 69 versus 63 (revised from 64). The index of prospective buyers rose to 44 was from 39. This is a solid beat, but it may not erode the gains in Treasuries much given the weakness in equities and the flight to safety nature behind some of the demand for bonds.

It’s not likely that there will be run-away moves in EURUSD as markets are likely to be on a wait and see mode going into the FOMC meeting. No policy changes are expected from the Fed, but the statement, economic forecast revisions and it has been argued that Yellen’s press conference should leave market participants with a stronger sense that a rate hike will come in October. Forecast revisions from the FOMC on Wednesday will be one of the key results of the meeting and will be used to assess rate hike probabilities for later in the year, as well as the likely trajectory. Despite the bounce in growth optimism in recent weeks, the FOMC will likely trim the official GDP estimates for 2015. But, it is also expected to increase the 2015-16 PCE chain price projections as energy prices have partly recovered from early-2015 lows. We expect a 0.1%-0.2% downward shift in the 2015 GDP and 0.4% boosts in the 2015 PCE chain price with likely additional upward nudge of 0.1% in the low-end inflation estimates for 2016. The core price central tendencies should remain roughly unchanged. The Fed may sidestep the usual downward bumps in the jobless rate estimates, given the flat jobless rate trend since February. The aggressive high-end near-term Fed funds rate estimates should be lowered as views converge toward the market expectation of a September or October start for Fed tightening. See our policy outlook page for a table of our assumptions for the Fed’s revised forecasts.

European court clears ECB’s OMT program. Draghi’s masterplan to safeguard financial stability and limit contagion finally won the backing of the European Court of Justice today, after a lengthy way through the courts in Germany and now the EU. The ECJ said in today’s ruling the OMT program doesn’t exceed the powers of the ECB, under certain conditions, which have been met. So the ECB can count on the OMT to help contain the fallout of a possible Greek default.

EURUSD has been range bound over the last few days. Upside has been limited by the resistance levels at 1.1326 and 1.1380 while the reaction lows from resistance have been higher than before. This has created higher daily lows and suggests upward bias but the resistance above has stood firm. Stochastics is indicating poor upside momentum while price is creating a bearish wedge. Therefore the line of least resistance should be on the downside over the coming days. This should bring the 1.0819 support into play. We’ve just seen a rally to 1.1326 resistance rejected which indicates weakness intraday. Today’s price movement is more likely range bound between 1.1152 and 1.1380. It is unlikely that EURUSD will have strong directional movements before FOMC meeting is over.

Currency Pairs, Grouped Performance (% Change)

US Dollar strength with AUD weakness have been the Currency Mover themes this morning. AUD has been the weakest against the dollar as it reacted lower from a resistance at 0.7780 yesterday and created a shooting star. Now the pair has moved lower as per this bearish indication. Markets are waiting for the FOMC meeting tomorrow which is visible in low volatility. Today’s trading is therefore likely to be range bound unless suprising news events change the expectations and force the market participants to recalculate the risk.

Main Macro Events Today

German May HICP inflation rose to 0.7% y/y, in line with the preliminary reading and up from 0.3% y/y in April. The national CPI rate also rose to 0.7% y/y. Headline rates are still held down by lower energy prices, which dropped 5.0% y/y in May. Excluding energy the national rate would have been at 1.3% y/y. Still, the decline in annual energy price inflation is slowing down as base effects start to drop out of the equation, which together with the drop in the EUR is pushing headline rates higher not only in Germany. Strong consumer demand and expected substantial wage gains this year are likely to keep German inflation above the Eurozone average, while the ECB’s accommodative policy is adding to price pressures, although this especially in the real estate market.

European Court Of Justice Decision on whether the European Central Bank’s OMT program was inside the ECB’s mandate.

German ZEW investor confidence dropped to 31.5 from 41.9 in May. A much sharper decline than anticipated, and the third consecutive drop in investor sentiment. The ZEW said external developments are limiting the room for a further improvement of the German economy, first and foremost the ongoing uncertainty about Greece’s future in the Eurozone, but also the weak dynamic in the world economy. The assessment of the current economic situation in Germany also dipped slightly to a still very high 62.9. Expectations for developments in the Eurozone as a whole also came off. Optimists outnumber pessimists, but the developments highlight that while growth is broadening there is no further strengthening for now as uncertainty weighs.

UK CPI rose +0.1% y/y in May, as expected and up from -0.1% y/y in April, which was the cycle low. Core CPI came in at +0.9% from +0.8%. The biggest upward contribution came from transport services, particularly air fares, with the timing of Easter in early April having a bearing, according to the ONS. PPI output prices were -1.6%, up fractionally from -1.7% in April, while input prices were -12.0% in May from a revised -11.0% in the previous month. Sterling has traded moderately lower in the wake of the release, although the data are near expectations.

US May Housing Starts data are out today and we expect the headline to decrease 3.1% to a 1,100k (median 1,095k) pace for the month from 1,135k in April. There is some downside risk to the release as the month’s NAHB index declined to 54 from 56 in April.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 17th June 2015.

CURRENCY MOVERS OF 17th JUNE 2015.

EURUSD, Daily

Yesterday’s US May building starts and permits divergence was good news on net but didn’t have an impact on the US Dollar Index. The 11.1% drop in housing starts from an upwardly-revised April cycle-high reflected the tail-end of the winter’s weather gyrations while an 11.8% permits surge to a robust 1.275 mln new cycle-high rate bodes well for housing activity into mid-year. Starts under construction is climbing at a healthy 14% rate into Q2, and home completions have risen 28.3% over the past two months after a 17.3% February-March setback that was likely weather-related. The surge in new home construction and completions will fuel a climb in new home sales into mid-2015.

FOMC began the first “live” meeting in terms of a possible rate move but there are no expectations for a rate hike to happen now. Risk is still for rate lift-off in September, but that could be just a token move according to market speculation. The improvement in growth, strengthening in the labor market, and the pickup in some inflation indicators support expectations the Fed will finally start to normalize policy next quarter. But, many are now of the opinion that Greece will default and increased market volatility could keep the FOMC inactive for the rest of the year. The Fed’s forecast revisions will be important for fine-tuning expectations on the rate trajectory. Yellen’s press conference also will be parsed for indications on the tightening path. So far the Fed Chair has taken the dovish path at each junction in the road given uncertainty over growth in the US and abroad, subdued inflation, and the impact from the stronger dollar. We suspect she will remain cautiously optimistic that the economy will perform in line with policymakers’ outlooks for stronger growth and a pickup in wages and prices.

EURUSD traded sideways yesterday as I expected in analysis but the pair found support a bit higher than I suggested, at lower 4h Bollinger bands at 1.1203. This created yet another higher low in 4h chart which suggests that EURUSD should push higher today. At the time of writing intraday this is happening with EURUSD trending higher this morning. Resistance level at 1.1280 has been limiting the move and judging from the intraday charts the area between 1.1280 and 1.1330 could well be the area that turns EURUSD lower today. The bearish view with potential to 1.1000 level over the coming few trading days is still valid. This is supported by the bearish wedge and the proximity of higher time frame resistance level. The nearest significant daily resistance levels are at 1.1380 and 1.4167 while support levels are at 1.1152 and 1.1050.

Currency Pairs, Grouped Performance (% Change)

This morning we are seeing AUD weakness and CHF strength. EUR has shown some strength against everything else but CHF which has been rather strong this morning against all the majors. USD, GBP and JPY performances are mixed as there is no clear trend across the board in these currencies.The strongest GBP pair over the last few days has been GBPNZD. This has taken the pair close to year 2011 weekly high at 2.2525. Another strong mover is AUDNZD and is trading near a resistance, the weekly pivot candle low (1.1140) from September last year.

Main Macro Events Today

UK Claimant Count Change: a drop of -11.1k in May claimant looks likely with the ILO unemployment for April seen steady at 5.5%.

UK Average Hourly Earnings: Markets will give particular attention to average household earnings to the three months to April, as this is expected to show the with-bonus figure rise 2.1% y/y from +1.9% and by 2.5% y/y in the ex-bonus figure, up from 2.2% previously. Such outcomes would mark new cycle highs, and anything stronger would likely reanimate BoE tightening expectations, which currently centre on Q2 next year.

Fed’s Interest Rate Decision and Policy Statement: No change is expected in this meeting. Risk is still for rate lift-off in September, but that could be just a token move according to market speculation.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 18th June 2015.

CURRENCY MOVERS OF 18th JUNE 2015.

EURUSD, Daily

After moving sideways for most of the day EURUSD found support at 1.1203 and bounced higher at the time of FOMC press conference. EURUSD is still trading inside a bearish wedge and near resistance levels. Yesterday’s close was well above the 1.1296 level and was a positive for the bulls but the upside is likely to be limited as price is trading at upper Bollinger Bands and close to resistance levels. We might see a bit more upside today but I expect price action to stay roughly inside the bearish wedge formation as I see resistance at 1.1424 while there is intraday support at 1.1330 – 1.1340. Daily support and resistance levels in EURUSD are: 1.1296, 1.1152, 1.1020 and 1.1380, 1.1467.

ECB’s Weidmann says ball is clearly in Greece court, something the Euro group is likely to mirror in its official statement today. Greek officials meanwhile say the ball is in the creditor’s court and with both sides continuing to play the blame game there is no sign of progress. Weidmann also repeated again that the ECB is forbidden to finance states directly and stressed that the Greek situation is very different to Italy and Spain. Nothing really new on the central bank’s position on Greece.

The ECB upped ELA assistance to Greece again yesterday, indicating that it is not ready to pull the plug and take the blame for a worsening of the situation, but the assessment that Greek bank’s are solvent is increasingly becoming questionable. Still, ELA assistance is actually given by the Greek central bank, who also takes the risks.

According to Merkel Greece needs to meet obligations to creditors. It seems even the German Chancellor is running out of patience with Greece. She still said one needs to reflect carefully on Greece, but added that its always been aid for reforms on Greece and that the country has gotten “unprecedented” solidarity already. She highlighted that Ireland and Portugal have concluded their programs and that Cyrpus is on a good way while Greece has dragged its feet on some reforms and didn’t conclude the measures. Merkel also said Greece isn’t on the agenda at the next summit and that a deal between Greece and the three creditor institutions is still possible, reiterating that where there’s a will there’s a way on Greece.

There was nothing definitive regarding the timing of liftoff in the FOMC statement or press conference yesterday. September is still the best guess to start normalizing rates as the data show improvement in the economy and some pickup in inflation. Additionally, the markets are taking Yellen, and the dots, at their word that the trajectory will be “gradual.” Data, therefore, will continue to be scrutinized for hints on tightening, along with global financial conditions. Meanwhile, Fed funds futures are consistent with this stance as implied rates reveal a shallower trajectory. The market had been pricing in strong probability for 50 bps in hike by the end of the year, but that was trimmed to one 0.25% hike.

Yesterday Yellen also referenced to the strong dollar suggesting that although it has appreciated significantly, she takes into account its negative impact on the economy, but hasn’t seen it have a negative impact on exports. Though the drag from the dollar on the economy could continue for “some time”, the Fed has no target and takes its moves as one of many factors affecting the outlook. She still believes that tightening is warranted this year despite the strong dollar. The buck remains lower on the day, however, as the risk of an immediate rate hike is still somewhat distant.

Currency Pairs, Grouped Performance (% Change)

The NZD slipped near 2010 lows against the USD today after data showed economic growth was much weaker than expected. This caused markets to anticipate further cuts in interest rates and sell the currency. As a result NZD is down against all the other major currencies and seems to be the only game in town as it has moved in excess of 1.20% against its rivals. Significant weekly support and resistance levels for NZD pairs are 0.6562 (NZDUSD), 1.6595 (EURNZD), 2.3298 (GBPNZD), 1.1659 (AUDNZD), 83.37 (NZDJPY) and 0.5753 (NZDCHF).

Main Macro Events Today

The Swiss Rate Decision. The Swiss National Bank was widely expected to keep rates unchanged and the rate was kept at -0.75. The appreciation of the CHF since the SNB abandoned its currency target in January has put pressure on the export-oriented Swiss economy, and with the Greek crisis hanging over the Eurozone policymakers will likely take a wait-and-see stance while keeping the options of currency intervention and higher charges on sight deposits open.

US Philadelphia Fed Index: June Philly Fed comes out today. An increase to 7.0 is likely (median 8.0) following May’s dip to 6.7. The Empire State Index for the month has already been released with a drop to -2.0 from 3.1 alongside a more restrained ISM-adjusted decline to 51.6 from 51.7. Overall, producer sentiment should trend sideways in June with the ISM-adjusted average holding at 51 for a third month.

The US May headline CPI is expected to grow 0.5%, while the core index rises 0.2%. Forecast risk: upward, as the bounce in oil prices in May should help lift the headline. Market risk: downward, as inflation undershoots may affect the timing of rate hikes.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 19th June 2015.

CURRENCY MOVERS OF 19th JUNE 2015.

EURUSD, Daily

EURUSD stayed inside the wedge and created shooting star candle in daily resolution and reacted lower from proximity of 1.1324 resistance. This morning we’ve seen weakness and some reaction higher from 1.1304. As the Greek situation is not likely to have a quick resolution I don’t expect EURUSD to move strongly today. I expect the pair to find support today around 1.1296 (another support at 1.1270) while upside is probably limited to yesterday’s high of 1.1435. I am seeing an intraday resistance at 1.1353 while daily support and resistance levels in EURUSD are: 1.1296, 1.1152, 1.1020 and 1.1435, 1.1380, 1.1467.

According to Bloomberg reports ECB is to hold an emergency teleconference today to discuss a Greek central bank request for more ELA funding. The central bank apparently is worried about the amount of capital withdrawn from Greek banks, which reportedly amounted to EUR 2 bln this week. ELA funding was just lifted on Wednesday and is conducted by and at the risk of the Greek central bank, but the ECB can limit overall amounts. It is increasingly difficult to argue that Greek banks fundamentally are solvent, which is a precondition for ELA funding, but the ECB clearly doesn’t want to be the one pulling the plug on Greece. The EU emergency summit on Monday will give yet another chance for an agreement, and without a deal capital controls almost seem inevitable.

Greece continues to dominate Eurozone markets, the rumour mill and official comments from both sides. This means ongoing volatility and wider intra-day ranges. Eurozone bond spreads narrowed slightly and Bunds underperformed Gilts as some safe haven flows were unwound and this trend is likely to continue amid fresh action to get a deal with Greece. EU President Tusk called an emergency summit on Greece on Monday to try and stem capital outflows, which the ECB is increasingly worried about. Reports that the ECB suggested Greek banks may close Monday were denied, but the Greek central bank reported called for further ELA funding. The risk of capital controls is rising.

U.S. reports signaled a long-await June factory sector bounce that will hopefully permeate the remaining June data, alongside a 0.4% May CPI rise that slightly undershot market forecasts and a narrower than expected $113.4 bln Q1 current account gap. The June Philly Fed moved to 15.2 from 6.7 coincided with a ISM-adjusted rise to 53.2 from 50.0, and defied Monday’s weaker Empire State data to signal some upturn in sentiment after a half-year stretch of dismal readings. We also saw a 12k initial claims drop to a lean 267k in the BLS survey week that undershoots both prior BLS survey weekly readings and monthly averages. We saw a second consecutive 0.7% leading indicators rise in May that added to the positive spin, leaving the economy in good position to outperform the low-balled GDP estimates released after yesterday’s FOMC meeting.

Currency Pairs, Grouped Performance (% Change)

USD has been stronger this morning following EURUSD hitting and failing to penetrate the 1.1424 resistance yesterday and dollar finding support levels against other currencies as well. AUD has lost ground this morning and is down especially against the USD, CAD and GBP. There is some strength in GBP but the performance is a bit mixed. JPY performance has been likewise while EUR is down against most of the competitors.

Nearest daily support and resistance levels for AUD pairs:

AUDUSD 0.7605 / 0.7864
EURAUD 1.1127 / 1.4770
GBPAUD 2.0028 / 2.0775
AUDJPY 94.32 / 97.30
AUDCAD 0.9410 / 0.9717
AUDNZD 1.1115 / 1.1304

Main Macro Events Today

Bank of Japan Monetary Policy Statement. As expected BoJ maintained the low interest rates its stimulus programme while it remained positive in its assessment of the economy. BoJ has conviction that growth will strengthen enough to accelerate inflation to its 2 percent target without additional monetary easing.

German May PPI inflation rose to -1.3% y/y from -1.5% y/y in April, with prices unchanged over the month. Producer price inflation remains in negative territory, but has clearly bottomed out at the start of the year and is slowly moving higher as negative base effects from energy prices start to fall out of the equation.

Canadian CPI could expand at a 0.9% y/y rate in May following the 0.8% growth rate in April. CPI is seen rising 0.5% on a month comparable basis in May after slipping 0.1% in April. Forecast risk: Mixed for total CPI given the rise in gasoline prices but 1.3% appreciation in the CAD that could restrain prices of imported goods. April was the first month the CAD gained ground against the USD since July of 2014 and the improvement continued in May on an average basis. Core CPI risk is modestly upward given ongoing upward pressure on the core CPI.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 22nd June 2015.

GOLD ROLLING OVER FROM A RESISTANCE

Gold, Weekly

Gold rallied from support over the last two weeks and reached a weekly pivot candle low at 1201. Price moved slightly above this resistance before failing and reacting lower. This resistance level also roughly coincided with 38.2% Fibonacci level adding to the significance of this area. Market is ranging and a failure to penetrate the aforementioned resistance suggests that the price Gold will move lower before another attempt higher can be occur. This would lead to a creation of lower high which would have bearish indication and mean that the technical picture deteriorates. Currently we have a higher weekly high from May and a lower weekly low from the beginning of June. This picture gives mixed signals and forces us to focus on a longer term bearish indication from a down sloping 50 week SMA (coincided with May high). Also the downward sloping price channel that has been in force since the 2013 high was put in place at 1434 gives a similar indication. Since November price has been moving sideways near a support but the lack of momentum is indicating lack of serious long interest in this market. Price needs to make higher lows and break resistance levels in order to turn the picture more bullish.

Nearest support and resistance levels: 1162 and 1201.

Gold, Daily

Gold broke out of descending regression channel two weeks ago and after some hesitation in form of a sideways move moved to a resistance at 1201. Stochastics oscillator had also moved to overbought levels suggesting that price has moved too far and should have a correction. This resistance and upper Bollinger Bands were too much for buyers and after a sideways day on Friday, the price of Gold has moved lower today. The line of least resistance is on the downside today and price could move as low as 1172 support before significant buyers step in.

The nearest significant support levels are at 1172,1201 and 1214.60.

Gold, 240 min

The price of Gold has at the time of writing retraced back to 23.6% Fibonacci level. Stochastics oscillator is close to the oversold threshold but this indication should be taken with a pinch of salt as price is trading close to a higher time frame resistance level. In other words it is more likely that price will move lower before solid support is found. The first potential support levels are close to lower 4h Bollinger Bands near 1180. These levels also coincide with 61.8% Fibonacci retracement level at 1178.8 and a rising trendline drawn from the June 5th low. Nearest significant support and resistance levels: 1178 an 1205.

Conclusion

Longer term picture is mixed with Gold moving sideways and making both higher weekly highs and lower weekly lows. Since November price has been moving sideways near a support but the lack of momentum is indicating lack of long interest in this market. Price needs to make higher lows and break resistance levels in order to turn the picture more bullish. In the short term the price of Gold is trading lower from a resistance level with the first significant support levels at around 1180. I am looking for lower time frame sell signals with targets at 1184 (T1) and 1178 (T2).

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 23rd June 2015.

CURRENCY MOVERS OF 23rd JUNE 2015.

EURUSD, Daily

EURUSD didn’t move much yesterday even though some positive news was received from the negotiations on financing Greece. The pair rallied to 1.1410 but failed creating both a 4h and eventually a daily rejection candles. This was very much in line with what I have been saying over the last week about EURUSD being limited on the upside to 1.1435 and with downside potential to 1.1000. The bearish wedge supported the view and now price action has confirmed this analysis with a breakout from the wedge. Today’s price action is likely downward biased with upside limited to 1.1319 while I see support between 1.1112 and 1.1148. The nearest significant daily support and resistance levels are at 1.1050 and 1.1434.

ECB has increased Emergency Lending Assistance to Greece this morning while the country has been now given 48 hours to reach a debt deal. EU leaders see progress in the Greek talks after the latest reform list showed a narrowing of the gap between creditors and the Tsipras administration and have given Greece 48 hours to finalise a deal. Eurozone Finance Ministers will meet again on Wednesday and could sign off a package if there is a staff level agreement by then. EU heads of state will then meet again on

Thursday with the aim to finalise a deal by the end of the week. It is likely that this will include an extension of the current bailout agreement and financing of upcoming ECB and IMF repayments through existing ESM funds earmarked initially for Greek bank recapitalisation. Greek debt is likely to be lengthened or re-profiled, although given the current construction of the ESM holding most of Greece’s debt, an outright write off seems less likely.

The 5.1% May US existing home sales bounce to a 5.35 mln pace yesterday beat the prior 5.31 mln four-year high to leave the strongest pace since the spike to a 5.44 mln clip back in November of 2009 with the homebuyers’ tax credit. We also saw a 4.6% median price rise to $228,700 new cycle-high, as prices now sit near the all-time high of $229,500 in June of 2005. Sales have bounced sharply in the seasonally important spring season after a dismal Q1 performance, alongside big rebounds for pending sales, permits, and the MBA purchase index, though we still have an anemic pace of housing sector recovery overall, with lean inventories and a cyclical price uptrend.

Currency Pairs, Grouped Performance (% Change)

AUD and USD strength together with EUR weakness have been the main themes this morning. EURAUD has lost the most ground at the time of writing as the pair failed to penetrate a resistance yesterday and is now approaching the lower end of the sideways range. Another strong mover this morning is NZD against EUR. EURNZD is struggling to penetrate a weekly pivotal resistance level at 1.6445. EURGBP is also down this morning despite the fact that the pair is close to support levels and lower daily Bollinger Bands.

Nearest important daily support and resistance levels for these pairs are:

EURAUD 1.4427 / 1.4769
EURNZD 1.6159 / 1.6674
EURGBP 0.7110 / 0.7211



Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

EMU PMI: Eurozone preliminary June PMI readings are expected to show a stabilisation in the manufacturing number at 53.6 (median same) and a decline in the services reading to 53.6 (med same) from 53.8 in the previous month, which should bring the composite down to 52.0 (med same) from 52.2. PMIs still point to ongoing expansion and national indicators are looking more even but there is no further acceleration in output growth and the data tie in with the ECB’s view that growth is broadening but not necessarily strengthening. This will leave the central bank firmly on course for full implementation of QE measures despite the pickup in headline inflation. Indeed, there still is some outside chance of a widening of asset purchases if the Greek crisis implodes and threatens to derail the recovery and stability in the rest of the Eurozone.

US New Home Sales. May new home sales should reveal a 1.0% decline to a 512k (median 520k) unit pace for the month following the 6.8% bounce to a 517k pace in April. Despite today’s firm existing home sales figures which had the headline pace up 5.1% there is still downside risk to tomorrow’s release from the NAHB decline to 54 in May and the fall in housing starts to 1,036k from 1,165k in April.

U.S. Durable Goods. May durable goods data should reveal a 0.5% (median -0.5%) decline for orders following a 1.0% drop in April. Shipments are seen rising by 0.5% with inventories up by 0.2% following respective April figures of -0.2% and 0.2%. Data in line with this forecast would leave the I/S ratio steady at 1.67 for a third month. There is downside risk to the report from the decline in Boeing orders to 11 from 37 in April and the weak industrial production figures which fell by 0.2% in May.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 24th June 2015.

CURRENCY MOVERS OF 24th JUNE 2015.

EURUSD, Daily

Technical picture in EURUSD is bearish with price moving outside the bearish wedge I’ve had on the chart for quite some time now. Resistance area below 1.1239 is likely to turn price lower today and with no high quality support levels in proximity of current price action I am expecting to see another strong sell off today. My target for today’s move is 1.0937 as this level is likely to turn price higher again. Important daily support and resistance levels are at 1.1207 and 1.0930.

An agreement at technical level with Greece needs to be on the table today, in time for Finance Ministers to sign off the agreement at the Euro group meeting Wednesday evening ahead of Thursday’s EU summit. Even if this goes without a hitch, Tsipras will still have to get the deal through parliament in Athens and then through the German parliament. So plenty yet that could go wrong and trigger another flip in fixed income markets.

Yesterday US new home sales rose 2.2% to a 546k pace in May after rebounding 8.1% to 534k in April (revised from 517k) from the 9.4% March drop to 494k. That knocked the month’s supply to 4.5 from 4.6 (revised from 4.8). Regionally, sales were split with gains in the Northeast and West, and declines in the Midwest and South. The median sales price fell 2.9% to $282,800 from $291,100 (revised from $297,300). Prices are down 1.0% y/y versus the 6.0% y/y clip in April. Data are better than expected. The U.S. Markit flash PMI manufacturing index slipped to 53.4 in June from May’s 54.0 and is down from April’s 54.1. It’s a third straight monthly decline and is the weakest reading since October 2013. However, employment and new orders were higher, with the former at its fastest pace since November. Average cost burdens were up for a second straight month.

Currency Pairs, Grouped Performance

USD strength yesterday turned into weakness this morning with EURUSD and NZDUSD leading the pack. EUR pairs are seeing some strength across the board even though the German IFO was a disappointment today. AUD performance has been mixed while JPY is the loser this morning as it is down against almost all the competitors.

EURJPY came close to a support level at 138 and has now bounced higher but struggles with a resistance at 138.90. GBPJPY is one of the performers this morning as it’s trying to break above a sideways range it has been bound for a week. As this has been caused by the pair trading at resistance this is not an ideal spot to be a buyer in this pair. CHFJPY moving higher from the bottom end of an ascending triangle formation.

Significant daily support and resistance levels for aforementioned pairs are:

EURJPY 138.00 / 140.63
GBPJPY 194.63 / 195.35
CHFJPY 131.50 / 134.35

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

German IFO came in much weaker than expected, with the overall confidence reading falling to 107.4 from 108.5 against consensus expectations for a drop to 108.1. The weaker than expected number is in stark contrast to yesterday’s better than expected PMI readings, which showed improved sentiment in both services and manufacturing sectors. The IFO reading showed the third consecutive drop in the forward looking expectations number, which was likely impacted by uncertainty about Greece and is now at the lowest level since the start of the year.

Euro group meeting An agreement between Greece and its creditors needs to be reached in time for Finance Ministers to sign off at the Euro group meeting this evening, ahead of tomorrow’s EU summit.

US Gross Domestic Product The Q1 GDP growth is likely to be revised to -0.4% from -0.7% in the second release, following 2.2% growth in Q4. Forecast risk: downward, given last year’s big downside surprise for the second revision that may be on track for a repeat. Market risk for USD: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

Please note that times displayed based on local time zone and are from time of writing this report.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 26th June 2015.

CURRENCY MOVERS OF 26th JUNE 2015.

EURUSD, Daily

EURUSD keeps on moving in a range while market participants wait for clues on what will happen with Greece. In previous reports I’ve pointed to a resistance below 1.1239 and suggested it would cap the upside yesterday and day before. This has been the case and price bars in both daily and 4h charts have been making lower highs. The bearish daily technical picture points to lower prices but the lack of downside momentum over the last two days and this morning forces me to question this indication.

Also, this being Friday and with no progress in Greece – EU negotiations in sight market might be range bound for yet another day. EURUSD has had a few narrow two to three day ranges since the March low but no such four day ranges. Therefore, we are approaching the breakout from this range. Range bound market means that the supply and demand are in a relative balance and therefore probabilities of price moving lower are now smaller. In other words, the likelihood of price moving up as easily as it could go down has increased. At the time of writing market has been rallying higher and towards the resistance levels. Intraday price action at resistance will give us clues on how likely it is that the resistance will hold. Important daily support and resistance levels beyond the range are at 1.0930 and 1.1292.

Currency Pairs, Grouped Performance

This morning it has been the commodity currencies that have taken beating. At the time of writing AUD and NZD are down against the majors. JPY has been attracting money from AUD and NZD while USD, EUR and GBP have not had constant performance one way or the other. NZDJPY has been moving lower for the last two weeks and is now trading relatively close to a weekly support level at 84.08 and right at a support zone created by a weekly pivot candle. AUDCHF rally failed from a resistance yesterday and has been now moving lower closer to a 4h pivotal support at 0.7182. The 0.7750 resistance proved too much for AUDUSD again yesterday and the pair fell down to lower 4h Bollinger Bands and close to a support provided by rising daily trendline. However, price has made lower highs in 4h resolution which suggests that this market is lacking in buy conviction.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

German May import price inflation was weaker than expected, falling back to -0.8% y/y from -0.6% y/y in April. Prices were down 0.2% m/m and for once not because of lower energy prices, but a sharp decline in prices for consumer goods. Prices for durable goods dropped 0.9% m/m and prices for non-durable goods fell 0.5% m/m. The monthly drop, which was likely impacted by the rebound in the EUR from the middle of April to the middle of May, brought the annual rate for imported consumer goods to a still relatively high 3.3% y/y.

BoE Governor Mark Carney Speech

EU Extraordinary Economic Summit The Q1 GDP growth is likely to be revised to -0.4% from -0.7% in the second release, following 2.2% growth in Q4. Forecast risk: downward, given last year’s big downside surprise for the second revision that may be on track for a repeat. Market risk for USD: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

US Michigan Consumer Sentiment: The second release on June Michigan Sentiment is out Friday and should be revised up to 95.0 (median 94.6) from 94.6 in the first release and 90.7 in May. The report has displayed a consistent, though, diminishing tendency toward upward revisions over the past year.

Please note that times displayed based on local time zone and are from time of writing this report.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 29th June 2015.

UPDATE ON GREECE.

The euro is under pressure in early-week trade as Greece’s talks with the Eurogroup broke down over the weekend, and the ECB refused to top up ELA assistance. Greece has consequently imposed capital controls and announced a referendum for next Sunday, which will determine whether the electorate has the stomach to exit the euro. Finally, after five years, the Greek drama is coming to a definitive head. Polls suggest that the people of Greece would rather compromise to stay in the euro than exit, but markets will remain on tenterhooks this week ahead of the referendum. Some key US data are also due this week, culminating with the release of the June payrolls report on Thursday (Friday is a holiday in the States). EURUSD hit a four-week low at 1.0953 after closing Friday at 1.1166, subsequently recovering above 1.1000. Recoveries will likely remain muted affairs, though incoming polls out of Greece will have potential to create volatility this week.

EURUSD is trading higher and tries to close the gap. Not suprisingly EUR is down against all the currencies but at the time of writing there is no sense of panic spreading across the FX markets. This is evidenced at the time of writing by EURUSD trading higher after the gap opening. Asian, European and US equity futures markets are down and Gold is trading higher by 0.4%.

EURUSD remains bearish as it is difficult to anticipate what the political players will do and how it impact markets. Over the next few days we should see trading opportunities for technical traders that know how to take advantage of nervous markets and volatility. EURUSD has a resistance level not far above current price action at 1.1130 which in the light of what’s happening with Greece suggests that EURUSD will trade lower after the return move is over. The June 1st candle seems to be the first pivotal support area and I expect this support hold today unless new suprising news items come up.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 30th June 2015.

CURRENCY MOVERS OF 30th JUNE 2015.

EURUSD, Daily

The Swiss National Bank has confirmed it engaged in a currency intervention yesterday in EURCHF as the bank sees CHF being too expensive versus EUR (EURCHF being too low). This supported both EURCHF and to certain degree other EUR pairs in yesterday’s trading. As a result EURUSD moved through the resistance level at 1.1130 and spike up to 1.1278 before falling down again. As per EURUSD futures today’s trading has been careful with light volumes after yesterday’s strong volatility. Strong movement higher from a support suggests that there is further upside ahead in EURUSD. I am seeing intraday support between 1.1110 and 1.1140 while significant daily support and resistance levels are at 1.1006 and 1.1292.

According to ECB’s Coeure Grexit can no longer be excluded. The executive board member said in France’s les Echos that a Greek exit from the Eurozone can unfortunately no longer be excluded, even if the ECB and Eurozone institutions want Greece to stay. Coeure said the European proposals gave Greece time and autonomy to take reform steps, adding that it was Greece’s decision to end the negotiations. Coerue also said that a “No” in the referendum would make it very difficult to continue the political dialogue.

Many commentators are now asking what Greece will be voting on this Sunday. For EU Commission President, the July 5 referendum will be a vote on Greece’s future in Europe, for the Greek opposition it is a vote on EMU membership, but for Tsipras and Syriza it is a way to change bailout terms. The Greek government is still selling a “No” to the creditor’s bailout offer as a chance to get improved conditions, but in reality, the offer will likely no longer be on the table on July 5 and without a bailout program in place the ECB will have difficulties defending its ongoing ELA assistance, which effectively turns it into a lender of last resort and the financier of the Greek government, something the Eurozone treaties clearly rule out. For now Draghi just decided to freeze the amount of ELA, but with the bailout program running out tomorrow, the ECB’s review of the situation on Wednesday could not only end re-financing for Greek banks, but also the Greek government, at least within the Eurozone system.

Yesterday US Dallas Fed manufacturing index improved to -7.0 in June after falling to -20.8 in May. This is a 6th consecutive month that the regional index has been in contractionary territory (below zero), which is mainly a function of the recession in the oil sector. US pending home sales rose 0.9% to 112.6 in May, it’s a 5th straight monthly gain, from a revised 2.7% increase April to 111.6 (was 112.4). Regionally, sales were up in the Northeast (6.3%) and West (2.2%), but lower in the Midwest (-0.6%) and South (-0.8%). Compared to last year, sales are up 8.3% y/y from 12.6% y/y.

Currency Pairs, Grouped Performance

All currencies have been losing ground against the JPY today as EUR has been falling against everything else but weak NZD. This speaks of need to find a safe haven. With GBP and AUD having mixed performances EUR uncertainty and a need safe haven definitely are the main themes for today. The way to participate in this action is to trade EURJPY which is down by over 1.20% at the time of writing.

The biggest movers at the time of writing are NZDUSD, EURJPY, GBPNZD, AUDNZD, NZDJPY.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

German May retail sales rose 0.5% m/m, against expectations for a correction from the strong April number, which showed sales up 1.3% m/m. Still, the three months trend rate continues to decelerate from the peak of 2.4% back in February and the annual rate fell into negative territory.

Switzerland’s KOF leading indicator much weaker than expected at 89.7 in the headline reading for June. This is well down on the Bloomberg median forecast of 93.7 and also down from the 93.1 reading of May. The unexpected reversal will be a concern for Swiss policymakers given the sharp appreciation of the franc earlier in the year. The SNB confirmed that it intervened in the currency market yesterday, buying EURCHF.

German June jobless numbers dropped 1K, less than expected, as unemployment ticked slightly higher in West Germany. The seasonally adjusted jobless rate remained unchanged at a very low 6.4%, but the data highlights that the slowing down in economic momentum, that showed up in the surveys in recent months, is starting to have an impact on the labour market.

Eurozone CPI TheCore CPI was confirmed as forecast at 0.8% in June. A 0.2% rise from 0.6% in May while the headline number came in at 0.2% after being flat in May.

Please note that times displayed based on local time zone and are from time of writing this report.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 1st July 2015.

CURRENCY MOVERS OF 1st July 2015.

EURUSD, Daily

EURUSD found support at the lower end of my support range (1.1110 – 1.1140) yesterday and was moving sideways inside this range overnight. At the time of writing price is again at intraday support at 1.1100 after reacting higher from it earlier today. I have been expecting today’s trading being limited between 1.1100 support and resistance at 1.1201 as market participants wait to see how the Greek drama develops but there seems to be no momentum from this support. Therefore the emphasis will be on watching the price action at current levels in order to see if buyers are stepping in or out of the way. Weekly picture suggests that EURUSD could be range bound between 1.0955 and 1.1466 for several weeks unless something extraordinary and unexpected happens. Significant daily support and resistance levels are at 1.1006 and 1.1292.

Greece defaulted on its IMF repayment yesterday and today Tsipras is prepared to to accept bailout conditions. Greece’s latest letter to creditors says Greece is “prepared to accept this Staff Level Agreement subject to the following amendments, additions or clarifications as part of the extension of the expiring EFSF program and the new ESM Loan Agreement”. The FT reports that the two page letter was sent as a clarification to yesterday’s surprise ESM loan request. The Eurogroup will discuss it in a teleconference at 15.30GMT today. The mentioned amendments are reportedly are only a handful of minor changes. If confirmed, this will clearly help the ECB to extent ELA assistance for now and the referendum may be called off.

German Finance Minister Schaeuble is still taking tough line on Greece, saying the letter from Tsipras that accepted most of the bailout conditions lacks clarity and that Greece’s proposals still aren’t a basis for serious measures. The euro has given back most of the gains it saw following the earlier news of the Tsipras letter.

An IMF default would not have necessarily meant a cut off in ELA, which so far has only been frozen at last week’s level, as according to earlier Reuters reports citing an ECB official Greek banks could still have ruled to be solvent for up to 5 days after the non-payment to the IMF. However, without a bailout program in place and no clear hope of another one, Draghi would likely have faced growing resistance in the council with Weidmann already questioning previously if ongoing emergency assistance doesn’t violate the prohibition of direct government financing through the ECB. This will still be the case, but if both sides are at least negotiating again, Draghi will unlikely want to be the one to pull the plug, at least for now.

Yesterday US consumer confidence surged to 101.4 in June from 94.6 in May (revised down from 95.4). It ties the March reading, and is the second highest print this year, bested only by the 103.8 in January. The latter was the highest since June 2007. The present situations component rose to 111.6 from 107.1 (revised from 108.1). The expectations index was 94.6 from 86.2 previously (revised from 86.9). The labor market differential improved to -4.3 versus -6.6. The 12-month inflation gauge edged uo to 5.1% from 5.0% (revised from 5.1%).

Fed’s Fischer said the FOMC will consider hiking rates in coming months, but did’t elaborate on the timing. The Fed VC, speaking on Monetary Policy in the US and in Developing Countries from Oxford University, added the the economy likely warrants only gradual moves and that the Fed is mindful of the risks of premature tightening. Growth should accelerate to about a 2.5% pace in Q2, and the pickup in the economy should further tighten the labor market. The dollar has been a significant headwind to growth. The Fed will monitor spillover effects in emerging markets.

Currency Pairs, Grouped Performance

At the time of writing there has been no strong movement in most of the pairs. CHF has lost some ground and NZD moved against other currencies after being weak yesterday. NZDJPY has moved against the prevailing trend and is now close to levels (83.50) it could sell off again (currently trading at 83.28). EURNZD is trading at intraday support but is close to a weekly resistance level at 1.6445. GBPNZD has also retraced to a support level at 2.3050 and is trading higher now. GBPCHF is trading close to 1.4795 resistance while AUDCHF is trading also near resistance and upper daily Bollinger Bands.

Significant support and resistance levels for NZD pairs are:

Main Macro Events Today

China’s manufacturing PMI numbers came in short of expectations. The HSBC/Markit PMI slipped to a final 49.4 in June from the preliminary or flash 49.6 reading, but did manage to top the 49.2 seen in May. The official manufacturing PMI fell to 50.1 in June from 50.9 in May. The contractionary reading for the HSBC/Markit PMI and the erosion in the official PMI highlight the ongoing difficulties in China’s economy. The Shanghai composite is hovering around unchanged.

UK Markit manufacturing PMI is expected to improve to 52.5 (median same) and the Swiss PMI to pick up to 49.9 from 49.7, although after Tuesday’s KOF miss there has to be a risk to the downside and it seems the strong currency is having more of a negative impact than feared.

US Manufacturing ISM. The June ISM is out on Wednesday and should show an increase to 53.0 (median 53.1) from 52.8 in May. Other measures for the month have generally improved and we expect the ISM-adjusted average of all measures to climb to 53 for the month after holding at 51 in both May and April. It appears that producers have adjusted to the hit from falling oil prices over the winter and are once again feeling more confident.

U.S. Construction Spending. May construction data is out Wednesday and is expected to remain unchanged (median 0.3%) following a 2.2% bounce in April and a 0.5% clip in March. There is some downside risk that mixed housing data for May could weigh on the report.

Please note that times displayed based on local time zone and are from time of writing this report.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 2nd July 2015.

CURRENCY MOVERS OF 2nd July 2015.

EURUSD, 60 min

EURUSD didn’t attract enough buyers yesterday but traded lower on slightly better than expected US macro releases. The pair moved all the way down to support at 1.1032 and is after failed push higher the pair is moving sideways. The pair is still trending lower in a downward regression channel and a breakout accompanied with a higher low is needed to change the picture more positive. The next intraday resistance at 1.1095 is fairly close and coincides with the Bollinger Bands while 50 period SMA is currently at 1.1132. Move closer to May 27th pivotal low looks likely if EURUSD stays in the channel today but the proximity of Monday’s low should slow the tempo. Important daily support and resistance levels are at 1.0937 and 1.1135.

Eurozone markets are bouncing back and Bund and Gilt futures are under pressure as safe haven flows receded on hopes of a Greek deal, but the risk of another set back remains high. The Greek referendum is still on and with Tsipras still calling for a “No” to the last creditor offer, Eurozone officials decided to hold off any future talks until the referendum is through. It looks like the yes camp is shrinking amid the banking closure, but Tsipras continues to sell the vote as a chance to get a better deal, while Eurozone officials see it as a vote on Eurozone membership. The latter would get a resounding “Yes”, but that is not how the referendum will be worded. For now the ECB is keeping the Greek banks and implicitly the government afloat with ongoing ELA assistance, but the question is how long Draghi will be able to maintain the Greek banks are essentially solid.

Yesterday’s US reports revealed upside surprises across the ISM, ADP, and construction spending figures, though vehicle sales are posting a 3% June drop-back from a May cycle-high that trimmed the day’s good news. For construction, we had revisions back through 2013 that lifted the construction trajectory into Q2 after what is now a smaller winter-weather hit, hence lifting growth prospects despite restraint in new home construction. The ISM popped to 53.5 from 52.8 with a employment spike to 55.5 from 51.7, while ADP posted a solid 237k June rise that defied the typical downward bias in as-reported ADP figures.

Currency Pairs, Grouped Performance

Yesterday, I pointed out that NZDJPY was at levels it could sell off again. At the time of writing NZDJPY is trading 0.61% below yesterday’s close. NZD is also down against EUR as EURNZD has been rising (up 0.95%) from the support identified in yesterday’s report. GBPNZD has been another nice runner since the publication of my report yesterday, up by 0.80% from yesterday’s close.

This morning AUD weakness against everything else but NZD sticks out while USD and EUR are seeing some strength against the majors. GBP and JPY have mixed performance.

Significant daily support and resistance levels for AUD pairs are:

Main Macro Events Today

US Initial Jobless Claims: Claims data for the week of June 27th is out Thursday and we expect to see the headline remain about steady at 270k (median 272k) from 271k in the week prior. Claims have generally improved in June and look poised to leave a 272k average for the month following a 274k average in May.

US Factory Goods Preview: May factory goods orders are out on Thursday and should reveal a 0.5% (median -0.5%) decline for orders with shipments up 0.4% and inventories down 0.1% for the month. This follows respective April figures of -0.7% for orders, flat for shipments and 0.1% for inventories. Data in line with our forecast should leave the I/S ratio steady at 1.34 for a third month.

US Non-Farm Payrolls: June employment data is out on Thursday and should reveal a 230k (median 230k) headline employment increase following a 280k bounce in May. We expect the unemployment rate to tick down to 5.4% (median 5.4%) from 5.5% in May.

Please note that times displayed based on local time zone and are from time of writing this report.
Click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 7th July 2015.

CURRENCY MOVERS OF 7th July 2015.

EURUSD, Daily

After a smaller than previous gap opening EURUSD rallied to a resistance at Friday’s close and turned lower as the buyers failed to challenge the sellers at the resistance. Trading Greek related politics is difficult, if not impossible and that leaves us with technicals. Technically EURUSD is inside a potential support area but still relatively close to a weekly low from two weeks ago (1.1130) and is now trading outside the upward trend channel. This and the lower high in mid-June suggest that the pair might come lower this week. Current trading takes place just above a support (1.0948) but there isn’t much upside momentum and the nearest resistance at 1.1032 isrelatively close. This should dampen the bulls’ readiness to bid the prices higher. This could lead to sideways trading today. Daily support and resistance levels: 1.0930 and 1.1135.

European markets in general are holding their breath ahead of today’s Eurogroup and EU leaders meetings. Bund and Gilt yields continue to decline as stocks remain under pressure, although losses on FTSE and DAX remain limited so far and peripheral Eurozone 10-year yields outside of Greece came off yesterday’s highs. Officials stress that they want to keep Greece in the Eurozone, but also that that still requires firm reform commitments from Greece. So all eyes are once again on Tsipras and his new Finance Minister.

The latter may represent more of a change in style than substance, however, and it remains unclear what proposals both will bring to Brussels. What is clear is that with the ECB tightening the pressure by raising the haircut on Greek collateral substantially today’s round of meetings really represent Greece’s last chance to prevent default and Grexit.

Greece’s last chance to come to an agreementand avoid bankruptcy is a quick deal or at least the firm progress of one at today’s Eurogroup meeting that will be followed by an EU summit in the evening. Hollande and Merkel stressed again yesterday that time is running out and the ECB tightened the pressure on banks by raising the haircut on Greek collateral – reportedly to 45%. Banks will remain closed today and tomorrow, but without a deal it will be almost impossible to open them again quickly and the government will likely face troubles at tomorrow’s T-bill auction. Grexit will almost become inevitable. If there is a deal, ECB’s Nowotny suggested that the ECB could provide bridge financing. So once again all hinges on Greece’s proposals and its willingness to compromise.

ECB also lifted haircut on Greek collateral, while maintaining ELA assistance to Greek banks for now. The decision will increase pressure on Greece ahead of today’s Eurogroup meeting and EU summit. It will also put local banks in a difficult position ahead of Wednesday’s T-Bill sale. The Greek government has been relying on rolling over T-bills to keep afloat, with Greek banks and institutions the only takers. With the fresh increase on the haircut, it will be increasingly costly for Greek banks to hold Greek government debt.

US June ISM services index edged up to 56.0 from May’s 55.7 as per yesterday’s release. However the 57.8 in April is still the highest of the year, while the 58.8 in November was cycle high since November 2005. However, components were mixed. The employment index fell to 52.7 from 55.3. New orders rose to 58.3 from 57.9, while new export orders declined to 52.0 from 55.0. Prices paid slid to 53.0 from 55.9. Also, US Markit services PMI fell to 54.8 in the final June print versus May’s 56.2 (and 54.8 June preliminary). It’s the lowest since January’s 54.2 and reflects continued slowing in the expansion. A year ago the reading was 61.0. Employment slid to 54.1 versus 55.5 in May, though the expansion in the job sector has persisted for 64 straight months. The composite index dropped to 54.6 from 56.0 in May (and 54.6 for the June preliminary). It is also the lowest since January.

Currency Pairs, Grouped Performance

We’ve seen USD and JPY strength today together with some movement in favour of CHF which suggests that there is a tendency to look for a safe haven. This is understandable with Greek drama continuing and global stock markets being weak, especially the Chinese stocks. EUR has been slightly weak almost across the board but has taken a hammering against the USD and JPY. With GBP and AUD the the storyline is very similar.

Main Macro Events Today

German industrial production unchanged over the month in May, with April revised down to 0.6% m/m from 0.9% m/m reported initially. The annual rate jumped to 2.1% y/y from 1.1% y/y in the previous month. Yesterday’s orders number also showed a sharp uptick over the year, but confidence indicators already suggest that the momentum is running out of steam. At the same time the tight German labour market has led to a wave of industrial actions and sizeable wage gains. This year consumption may be able to sustain ongoing growth, but the likely loss of competitiveness could well lead to German underperformance in coming years.

UK industrial production unexpectedly rose by 0.4% m/m (median -0.2%) in May after 0.3% growth in April (revised from 0.4%). The y/y figure registered 2.1% growth (median 1.6%), up from 1.2% in the previous month. A solid 7.3% rise in oil and gas production was behind the strength. The narrower manufacturing outlook data, which is more reflective of economic trends, disappointed, unexpectedly falling 0.6% m/m (Bloomberg median +0.1%), worsening from April’s -0.6% m/m figure. The y/y figure was +1.0% y/y (Bloomberg median 1.8%) after 0.1% in April (revised down from 0.2%). Sterling initially spiked on the strong industrial headline, but has since dropped to net lower levels against both the dollar and euro as markets disgust the weak manufacturing output data.

US Trade Balance: The May trade deficit is expected to narrow 5.8% to -$38.5 bln after narrowing 19.2% to -$40.9 bln in April. Exports in May are expected to grow 1.0% while imports show a -0.2% decrease on the month. Forecast risk: upward, as depressed oil prices could impact imports. Market risk: downward, as weaker than expected data would push back rate hike assumptions.

US Consumer Credit: The May consumer credit report is out on today and should reveal a $18 bln (median $18.5 bln) increase for the month following a $20.5 bln increase in April and a $21.3 bln gain in March. Over the past year the headline has averaged $18.2 bln, about in line with our forecast.

EU Extraordinary Summit

Please note that times displayed based on local time zone and are from time of writing this report.
Click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 8th July 2015.

CURRENCY MOVERS OF 8th July 2015.

EURUSD, Daily

EURUSD traded between the nearest support and resistance levels yesterday as was expected. The 1.0930 support attracted buyers and after printing a low of 1.0916 price rallied to 1.1052. Weekly pivot bar from end of May has been providing support but at the time of writing there are no definite signs of price reversing the current downtrend. Price is trending lower in a 4h 2 stdv regression channel and is at the time of writing near channel high and not that far from 1.1048 resistance level. The nearest support and resistance levels are at 1.0930 and 1.1048.

Greece gets until Sunday to reach a deal. Euro group and EU leaders meeting yesterday once again failed to reach an agreement with Greece amid a lack of concrete proposals from Tsipras. Greece is expected to present a formal request for ESM aid today and Euro group ministers will hold a conference call to discuss the proposals that are expected to be laid out in the request. The final deadline to reach an agreement at technical level seems to be Friday and a deal must be reached at a summit on Sunday. German Chancellor Merkel said she was not particularly optimistic and EU Commission President Juncker said Grexit scenarios have been prepared in detail. The ECB meanwhile stands ready to try and limit contagion. It seems this time the game really will be up Sunday if there is no miracle.

Eurogroup and EU summit yesterday once again didn’t get very far amid the lack of new proposals from Greece. EU President Tusk was left to say that a formal request for ESM aid was expected today, Thursday at the latest, while stressing the strict conditionality of ESM treaties. So if Tsipras thought by not extending the bailout and going to the ESM instead he would get more leeway he will have been disappointed. Greece said it will send a formal request for ESM aid today, while EU’s Dombrovkis said Greece was ready to present reform proposals tomorrow.

In an unusually clear way Tusk set Sunday as the very last deadline for a deal with Greece, while urging both sides to work together to come to an agreement. German Chancellor Merkel was not very optimistic however and EU Commission President Juncker said detailed Grexit scenarios have been prepared. The ECB meanwhile continues to stand ready to limit the fallout from the Greek crisis.

U.S. JOLTS report showed job rose 29k in May after a 225k increase in April to 5,363k (revised from 267k to 5,376k). The job openings rate was steady at 3.6 (April was nudged down from 3.7%). Hirings fell 34k following a revised 54k drop in April (was -81k). The rate fell to 3.5% from 3.6% (April revised up from 3.5%). There was a 10k decline in quitters after a 60k drop previously (revised from -100k). The quit rate was unchanged at 1.9%. The May data won’t have market impact.

U.S. trade deficit widened 2.9% to $41.9 bln in May, after narrowing 19.5% to -$40.7 bln in April (revised from -$40.9 bln). Imports dipped 0.1% following the 3.3% April decline. Exports slid 0.8% after the 1.1% gain in April (revised from 1.0%). Excluding petroleum, the trade balance fell to -$36.1 bln from -$33.9 bln in April (revised from -$34.1 bln).

Currency Pairs, Grouped Performance

This morning the strongest movers have been among the AUD and JPY pairs. AUD weakness has been mirrored by JPY strength. This makes sense as Chinese stock market has been plummeting over the last couple of weeks and today Hang Seng Composite is down by 8%, a massive move that really tells about panic over Chinese stock market. China is a huge consumer of copper and iron ore that Australia produces and any problems in the economy are likely to have a major impact on Australia. Thus the weakness in AUD while JPY is up due to its safe haven status.

Key support and resistance levels in AUDJPY: 88.25 and 90.48 and NZDJPY 79.89 and 85.32

Main Macro Events Today

EU Extraordinary Economic Summit: Greece is expected to present a formal request for ESM aid today and Eurogroup ministers will hold a conference call to discuss the proposals that are expected to be laid out in the request.

FOMC Minutes: The Fed is expected to be more optimistic about the US economy reaching their 2% inflation target. We are also likely to see some optimism on personal consumption.

US Consumer Credit: The May consumer credit report is out on today and should reveal a $18 bln (median $18.5 bln) increase for the month following a $20.5 bln increase in April and a $21.3 bln gain in March. Over the past year the headline has averaged $18.2 bln, about in line with our forecast.

Please note that times displayed based on local time zone and are from time of writing this report.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HotforexNews]

Date : 9th July 2015.

CURRENCY MOVERS OF 9th July 2015.

EURUSD, Daily

EURUSD has found support at a weekly pivot candle and moved closed above the previous day’s high yesterday making this candle a new pivot. The pair rose slightly after yesterday’s close and has at the time of writing failed to challenge the trend channel bottom and a resistance level at 1.1117. This level is not far from a weekly low at 1.1130 and therefore made buyers hesitant. This level also coincided with the upper Bollinger Bands in a 4h chart. Market has been now moving lower after a 60 min rejection candle at 1.1170 resistance was created. I am seeing support at 1.0957 to 1.0976. Significant daily support and resistance levels: 1.0930 and 1.1135.

European stocks rose slightly yesterday and futures are pointing to a higher opening today, while core bond yields rose and peripheral yields declined following Greece’s formal request for a 3-year ESM loan program. The details of the promised reform plans were once again missing though and the risk is another setback, if today’s reform list once again falls short of expectations. For many Grexit becomes the main scenario now.

FOMC minutes revealed concerns over Greece and China, among other considerations, that encouraged a steady policy stance, as was evident in the policy statement and other materials. While views on the economy and labor market were generally upbeat, as Q1 sluggishness was attributed to temporary factors and seasonal adjustment issues, there were offsetting elements that reflected a very cautious group of policymakers. A number of officials warned against premature tightening and wanted to see stronger conditions before pulling the trigger. It was also stressed that policy decisions would be on a meeting-by-meeting basis. With the Greek and Chinese situations having eroded further since the June 16, 17 meeting, the FOMC may be even more gun-shy about liftoff, adding to market speculation the Fed could remained sidelined in September. We’ll wait for Yellen’s upcoming comments, as well as data, before we shift out of our September forecast.

Yesterday’s US consumer credit climbed $16.1 bln in May after a $21.4 bln April surge (revised up from $20.5 bln). Non revolving credit paced the strength with a $14.5 bln increase versus the $12.9 bln gain in April (revised from $11.9 bln). Revolving credit was up $1.6 bln versus the prior $8.5 bln print (revised from $8.6 bln).

Currency Pairs, Grouped Performance

After yesterday’s strong movements in favour of JPY we are now seeing a rather strong reversal. This suggests that the need for safe haven did go a bit too far in some of the JPY pairs. CADJPY for instance reached a daily pivot candle from March and is reacting strongly higher from it. GBPJPY hit a weekly pivot high from February this year and bounced higher. USDJPY found support from a range formed in May but has resistance above. There should be more volatility and trading opportunities in these pairs over the coming days.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

China’s CPI grew at a 1.4% y/y pace in June, better than expected following the 1.2% pace in May that was the slowest pace since January’s 0.8% growth rate. CPI was a year peak of 1.5% y/y in April.

Australia’s employment rose 7.1k in June, contrary to an expected dip after a revised 40.0k gain in May (was +42.0k) The unemployment rate rose to 6.0% in June but from a revised 5.9% in May, leaving an unemployment rate that undershot expectations in June.

BoE Interest Rates Decision. Bank of England is expected to maintain the current level of interest rate at 0.5%. The BoE should once again announce a no-change outcome, which would be a non-event for markets as the central bank doesn’t normally issue statements after unchanged decisions, so we’ll have to wait until the minutes are published on Jul-22 for insight.

US Initial Jobless Claims are expected to decline slightly from the previous number of 281k to 275k.

Please note that times displayed based on local time zone and are from time of writing this report.


Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.