EUR/USD Faces Week Flush with Event-Driven Volatility

By Christopher Vecchio, Currency Strategist

Fundamental Forecast for Euro:Neutral
 

- EURUSD appears to have made a significant turn on the charts…

- …and recent gains seen in EURUSD may be setting up a ‘sell the rally’ opportunity.

- Have a bullish (or bearish) bias on the Euro, but don’t know which pair to use? Use a Euro currency basket.

 

While EURUSD was pressured into fresh monthly lows just above $1.0800, a late-week rally in the EUR-crosses wiped out nearly all losses accumulated earlier across the spectrum. Dodging disparaging headlines about Greece’s ability to reach consensus with her creditors, EURUSD only closed -0.10% lower at $1.0990, while EURAUD and EURJPY led the EUR-crosses higher by +2.22% and +2.02%, respectively. 

 

The Euro’s sensitivity to the situation in Greece is bound to jump in the coming days, even if only temporarily, as a June 5 deadline for a payment to the IMF looms. This is a delicate situation insofar as the Greece government is purportedly open to defaulting on her obligations in order to maintain its political party’s pre-election promises. As far as the impact of the intraday headlines on the Euro, the likelihood remains low; but the ever so important tail risk scenario is becoming more probable, likely to leave traders a bit uneasy.

 

Of course, in the background, the ECB’s QE-driven trade – via the portfolio rebalancing channel effect – is dictating asset performances across the risk spectrum. In tandem, European sovereign yields are falling, the Euro is depreciating, and European equity markets are rallying (or vice-versa). This trilateral relationship should continue to persists, irrespective of the Euro’s direction.

 

In the very near-term, there is heightened risk to the Euro (and more specifically, EURUSD) as a calendar packed with medium- and high-ranked event risk is on the horizon. Event-driven volatility – particularly between the hours of 08:30 GMT to 14:00 GMT – will be well-represented this coming week.

 

On Monday, the German Consumer Price Index for May and the May US ISM Manufacturing survey are due. On Tuesday, May German labor market data and the May Euro-Zone CPI will be released, as well as US Factory Orders for April. On Wednesday, the ECB will hold its June interest rate meeting and press conference, while the May US ADP Employment Change report, the May US ISM Services gauge, and the Fed’s Beige Book will be released. On Thursday, the May PMI readings for the Euro-Zone and Germany, and the weekly US jobless claims data will be released. Lastly, on Friday, Q1’15 Euro-Zone GDP data will be released, while the May US Nonfarm Payrolls report and unemployment rate wil be due.

 

Needless to say, there are items on the calendar over the next few days on both sides of the pond that are likely to increase volatility around EURUSD. Besides previously discussed influences lingering in the background – Greece and the ECB’s QE program – the one theme that will be put to the test this week, that could drive the direction of EURUSD for the coming weeks, will be the notion that the US economy has reversed its early-year slowdown. Only if the recent optimism over the US growth story in Q2’15 is confirmed by the upcoming data, will the rising interest rate differentials in favor of the US Dollar story take hold. By the end of the week, we should have a better idea of which way EURUSD will be trading for the foreseeable future. –CV

Source:http://www.dailyfx.com/forex/fundamental/forecast/weekly/eur/2015/05/31/EURUSD-Faces-Week-Flush-with-Event-Driven-Volatility.html 

France's Macron does not rule out eventual EU treaty change -report

 

PARIS, May 31 (Reuters) - French Economy Minister Emmanuel Macron wants a two-speed Europe and sees a possible change to European Union treaties in due time, he told newspaper Le Journal du Dimanche in comments published on Sunday.

"We have to accept the idea that Europe will be made on a two-speed basis, with a union based on solidarity and differentiation," Macron was reported as saying.

"The 28-member Europe must be simpler, clearer; more efficient and continue to advance on digital and energy issues," the economy minister said.

"As to the euro zone avant-garde, it must go towards more solidarity and integration: a common budget, a common borrowing capability and fiscal convergence," he added.

The 37-year old minister's comments come days after Germany and France agreed plans to strengthen cooperation among euro zone countries without changing existing EU treaties, in a potential setback for British Prime Minister David Cameron.

The blueprint would bolster the 19-nation euro zone, of which Britain is not a member, by holding more regular summits of its leaders, strengthening the Eurogroup forum of finance ministers and establishing euro zone-specific structures within the European Parliament.

On treaty change, which has been advocated by David Cameron as he toured European capitals this week but had been ruled out by France so far, Macron said:

"What's important is the project," adding that he was not speaking in the name of the government and that only President Hollande could speak for France.

"Treaty change is a method that would ensue and that we have to prepare in due time. If we ask the questions today to the people, the answer will be no. We have to reconcile Europeans with Europe," Macron, a former advisor to Hollande, added.

Le Journal du Dimanche said Macron and his German counterpart Sigmar Gabriel were working on joint proposals that they would make public later this week. (Reporting by Michel Rose)

Source:https://uk.finance.yahoo.com/news/frances-macron-does-not-rule-220000480.html

Europe is in the recovery position, but it’s still unwell

 By Roger Bootle | Telegraph

It is not widely enough recognised that the UK is the eurozone’s largest single export market’, writes Roger Bootle

During the past few years it has been usual for both investors and commentators to assume that the eurozone is mired in depression, with little or no prospect of escape. But is this still true?

Not according to the gross domestic product (GDP) figures for the first quarter of the year. As I have noted before, Q1 was notably weak in several parts of the world, including the UK, China and most of the emerging markets. According to figures released on Friday, the US economy even contracted. By contrast, the eurozone registered quarterly growth of 0.4pc. It was particularly noteworthy that France managed to grow by 0.6pc, double our disappointing 0.3pc rate. 

In fact, some sort of recovery in the eurozone this year should not be so surprising. It has four things going for it. First (Other OTC: FSTC - news) , along with most of the developed world, it has benefited from lower oil prices, which have reduced costs and put money in consumers’ pockets. Moreover, unlike some other parts of the world, especially the US, the expansionary effects from lower oil prices have not been significantly offset in the short run by the hit to the domestic energy-producing sector. The countries of the eurozone produce virtually no oil or gas.

Second, the eurozone has been able to benefit from last year’s recovery in the US and the UK. It is not widely enough recognised that, as well as the eurozone being the UK’s single largest export market, it returns the favour. That’s right: we are the eurozone’s largest single export market. So the recovery here has also boosted the eurozone’s recovery through higher exports (that is, our imports).

Third, after the launch of quantitative easing (QE) in March, there has been a massive injection of liquidity €60bn per month, and set to continue at that level until September next year. Even if this achieves nothing directly, bearing in mind all the hype, it should at least help to boost confidence. 

Fourth, partially linked to the launch of QE but also connected with other factors, there has been a sharp drop in the euro exchange rate. Over the past year, on a trade-weighted basis it has fallen by about 12pc. Against the pound, it is standing close to a seven-and-a-half-year low. So some of the eurozone’s recent comparative economic strength has been due to its taking market share from other countries, including our own.

But is the eurozone likely to build on this recent recovery? I doubt it. Actually, more up-to-date information from April and May has already started to suggest a bit of a slowdown from Q1’s reasonable growth. According to the surveys, business and consumer confidence have dropped back a bit. That would not be surprising. Across the euro area, wage increases remain very low. Once the one-off boost to real incomes caused by lower oil prices has passed through the system, the rate of growth of real earnings should fall back. And, outside Germany and a few other northern core countries, the rate of unemployment remains appallingly high. 

It seems clear that QE will continue for a good while yet and this will be helpful at the margin. But just as I always doubted that QE was a transformative influence in the US and the UK, so I doubt its power in the eurozone. Insofar as it has caused the exchange rate to drop, it has boosted demand. But I doubt that it can do much more.

And whether the boost from the exchange rate will endure is anyone’s guess. Currencies have a habit of bouncing around unpredictably. Surely the euro is at or very near its limit against the pound? And you have to wonder whether the dollar has become too strong for its own good. A 10pc rise of the euro would do a good deal of damage to the eurozone’s export performance. This could happen as an indirect result of dollar/pound weakness, perhaps tied to a revision of the markets’ views on interest-rate prospects. Alternatively, it might happen as the result of some new development in the EU’s continuing identity crisis perhaps connected with the UK’s impending referendum. 

The fundamental problems of the eurozone remain essentially unaltered. The countries of the southern periphery are still caught in a trap of the euro’s making. Uncompetitiveness, fiscal austerity and high unemployment combine to produce anaemic growth at best. True, Germany and the Netherlands continue to do fairly well. But they also continue not to spend their full whack. The result is that Germany runs a current account surplus of 7.5pc of GDP, with the equivalent figure for the Netherlands being more than 10pc.

Meanwhile, the running sore that is Greece drains confidence. At some stage pretty soon, there is going to be a Greek “event”. Whether it takes the form of an outright default hardly matters. Actually, given that the players involved are Greece and the EU, whatever happens is unlikely to be straightforward. Even if Greece does not make its next payment to the IMF, which has widely been described as a default, in fact this is likely to be classified as a “missed payment”. Greece would have a period of some months before this became classified as a default good and proper. 

It is one thing to be in the dark about whether Greece is going to default and leave the euro, but it is deliciously ironic that, even after the event, we may not know for some time whether Greece has “defaulted” or not. 

Of course, anxiety about the Greek financial situation is holding back the Greek economy. Indeed, despite the eurozone’s pick-up in Q1, the Greek economy actually contracted. But across Europe the Greek situation is having an effect as people watch and wonder about the stability of the euro, the robustness of the banks and their own financial security. Perhaps this is the reason for the softening of confidence across the eurozone revealed in the April and May surveys. 

The upshot is that in 2015 the eurozone should register its best performance for several years. It should grow by about 1.5pc. But don’t be fooled into thinking that this means the eurozone’s economic crisis is over. Growth could easily fall back next year. Only when southern Europe can break free from its shackles, Germany spends its money and France reforms will the economy recover to full health. 

Roger Bootle is executive chairman of Capital Economics. The paperback edition of his bestselling book, The Trouble with Europe, has just been published by Nicholas Brealey. To order your copy, call 0844 871 1514 or visit books.telegraph.co.uk

Source:https://uk.finance.yahoo.com/news/europe-recovery-position-still-unwell-173025087.html;_ylt=Anjs.xgIDtyfQWfDNZuTTsENsLFG;_ylu=X3oDMTFhN2VtdTh0BHBvcwMxBHNlYwNuZXdzX2NvbW1lbnRhcnkEc2xrA2V1cm9wZWlzaW50aA--

Greek drama weighs on sentiment; yen off, euro up

NEW YORK (Reuters) - The euro rose on Thursday as Greece fought to reach an agreement with its lenders to avoid an imminent default, but mixed signals on the state of the negotiations kept other markets little changed.

Crude oil futures rose in choppy trade after two days of sharp losses after data showed a fourth weekly drawdown in U.S. crude stockpiles.

Creditors said progress in talks with Greece was too slow and a deal was still out of reach, a euro zone official told Reuters. But Greece's government said it intends to reach an agreement with its lenders by Sunday.

"Everybody is coming out with a different story. I'm looking for an EU-endorsed comment rather than something coming from Greece to be sort of the final arbiter on what the sentiment really is with regard to a resolution," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, which manages about $67 billion in assets.

Stocks closed slightly lower on Wall Street, cutting previous losses. S&P 500 e-mini futures turned positive shortly after the cash market close.

At the closing bell in New York, the Dow Jones industrial average (.DJI) was down 36.87 points, or 0.2 percent, to 18,126.12, the S&P 500 (.SPX) had lost 2.69 points, or 0.13 percent, to 2,120.79 and the Nasdaq Composite (.IXIC) had dropped 8.62 points, or 0.17 percent, to 5,097.98.

Nikkei futures (NKc1) fell 0.3 percent after 10 straight sessions of gains on the Tokyo index (.N225). Earlier, the pan-European FTSEurofirst 300 index (.FTEU3) fell 0.5 percent.

EURO UP, DOLLAR TREND SEEN HOLDING

The Japanese currency touched its weakest since 2002 against the U.S. dollar, at 124.46 yen (JPY=). It ended the session down 0.2 percent at 123.94. The euro (EUR=) gained 0.4 percent to $1.0946 and the dollar index (.DXY) fell 0.5 percent after rising 1.4 percent in the previous two sessions.

"I see the dollar trade probably continuing at this point since we're the only ones moving toward a tightening bias,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"Greece is the wild card in terms of what will happen to the euro."

In government debt markets, U.S. 30-year Treasury bonds prices were last down 7/32 in price to yield 2.8857 percent, from 2.875 percent late on Wednesday.

U.S. three-year notes (US3YT=RR) were last up 3/32 in price to yield 0.9571 percent, from 0.989 percent late Wednesday. Benchmark 10-year notes were flat, their yield at 2.135 percent.

Front-month Brent (LCOc1) rose 1.4 percent to $62.91 a barrel and U.S. crude futures (CLc1) rose 0.8 percent to $57.97. [O/R]

Gold (XAU=) was little changed near $1,188 an ounce, spot silver (XAG=) dipped less than 0.1 percent on the day and copper (CMCU3) rose 0.2 percent. [GOL/]

(Reporting by Rodrigo Campos and Caroline Valetkevitch; Editing by James Dalgleish)

Reuters by Rodrigo Campos

Source:https://uk.finance.yahoo.com/news/greek-drama-weighs-sentiment-yen-011033572.html

Corrected - China markets plunge in record turnover as margin traders take fright

SHANGHAI (Reuters) - China's stock markets plunged on Thursday, with indexes dropping over 6 percent in record high turnover as investors rushed to sell after more brokers tightened margin trading requirements for clients and the central bank drained money market liquidity.

The CSI300 index and the Shanghai Composite Index both slumped in late afternoon trade, ending down 6.7 percent and 6.5 percent, respectively, their worst day since January 19 when markets fell over 7 percent on an earlier crackdown on margin trading. In terms of points shed, the two indexes suffered their heaviest single day loss since 2008.

The Shanghai Stock Exchange saw A share turnover hit 1.2 trillion yuan ($193.57 billion), an all time record high, on the selloff.

In Hong Kong, the Hang Seng Index closed 2.2 percent down, and the China Enterprises Index lost 3.5 percent, and some some major mainland shares were trading at a discount to their Hong Kong counterparts.

China's stock market has surged over 140 percent over the past 12 months despite a flagging economy, as retail investors, including university students, barbers and janitors piled into the world's best performing market, though economists have warned that, based on economic fundamentals, the rally was unjustified.

Official data shows the surge has been accelerated by cheap credit, with the outstanding value of margin finance hitting a record 2 trillion yuan on Tuesday.

On Thursday morning at least three Chinese brokerages, including Guosen Securities Co, Southwest Securities Co and Changjiang Securities Co said they would tighten margin requirements.

"The brokerages are front running what the regulator wants to do," said Bernard Aw, an analyst at IG in Singapore.

Haitong Securities and GF Securities had made similar moves earlier in the week.

"This is no longer an individual case, but an industry-wide campaign," said Zhang Chen, analyst at Shanghai-based hedge fund Hongyi Investment. "Clearly, they got guidance from regulators, and this shows a change of government's attitude toward the margin trading business."

LIQUIDITY DRAIN PLAYS ON NERVES

Key mainland sub indexes including property, energy and financial services plunged more sharply, with both energy and property slumping over 7 percent.

Shares in several Chinese brokers fell by between 6-8 percent.

Tian Weidong, analyst at Kaiyuan Securities in Xi'an, said that the sharp drop in financials was partly due to news that Central Huijin Holdings, an asset management company controlled by Beijing, had reduced its holdings in major state-owned banks China Construction Bank and ICBC, both of which are index heavyweights.

The news was published on Wednesday by the Hong Kong Stock Exchange in a daily disclosure report.

But he added that many investors were already looking for a reason to sell, and the changes to margin financing sparked the stampede.

"Many investors have become very cautious and are looking for a reason to take the profits they have already earned," he said.

The central bank's move to mop up excess liquidity in the interbank market was a contributory factor in the sell off.

While there was no information on how much money was drained, and money traders warned the adjustment could be minor, any suggestion of a squeeze was seen as negative for stocks.

Analysts warned of the risk of volatility intensifying.

"If the stock market suddenly reverses and investors default on their margin debts, the contagion effect will be much greater than in previous cycles, since the banking system is now more exposed to the brokerage industry," wrote Chen Long of Gavekal Dragonomics in a research note.

($1 = 6.1994 Chinese yuan renminbi)

(Additional reporting by the Shanghai Newsroom, Nate Taplin, and Nichola Saminather in SINGAPORE; Editing by Simon Cameron-Moore)

(Corrects ING Markets to IG in paragraph 8)

Reuters by Pete Sweeney and Samuel Shen

Source:https://uk.finance.yahoo.com/news/corrected-china-markets-plunge-record-041953645.html

European majors on the brink of reversal as Dollar's momentum slows down

The Dollar was once again king in the currency markets over the past 24 hours and the US currency was able to extend its recent gains against its main competitors. The current bias in favour of the Dollar has allowed it to perform admirably against the likes of the Euro and the Pound marking a 7-day rally versus the European coins.

Yesterday was no different as the Economic Calendar didn’t offer much in terms of fresh news hence price action continued on the same pro-Dollar beat. However we need to point out here that the technical indications on the Euro and the Cable do paint a slightly different image as the momentum that drove them both to fresh lows seems to be diminishing and that could be a precursor towards an upcoming reversal.

Taking things on at a time, the Euro came under fresh pressure yesterday morning and dipped to the 1.0820 level during the European session while concerns about Greece’s ability to meet its IMF payment by the end of the week resurfaced. However it is important to notice that during the rest of the day the Euro was able to recover from these lows and this morning we find it trading around the 1.0900 area.

The technical indications suggest that a correction to the upside is possible and could actually be justified after such an extended rally in favour of the Dollar. For the Euro to break above the 1.0930 barrier though and pick up momentum a fundamental trigger would be required. In terms of scheduled reports there’s little on the docket today but any glimpse of positive developments, possibly from Greece’s front, could spark a move towards the 1.1000 area.

Technically similar outlook for the Cable today as the UK currency declined again yesterday after a brief correction overnight. The Cable tested the 55-period EMA around the 1.5435 area but quickly collapsed to print a fresh low at the 1.5300 floor. Nevertheless the Cable could see a reversal today as the release of the UK Gross Domestic Products report is expected to print higher. Given that the momentum to the downside has already shown signals of decay a move towards the 1.5450 area could be in the cards.

Economic Calendar
 
By WorldWide Chart Analysis

Source:http://worldwide-invest.org/content/4269-european-majors-brink-reversal-dollars-momentum-slows.html

Forex - Chart EUR/SEK Update: Rallied off range floor

 

28 May EUR/SEK Daily 
06::25 GMT - A decent rally yesterday traded off Tues' sharp low/ rangefloor test. Above 9.24, remain on a long lean from here today into 9.35/ the range high volume middle, or else 9.40 or so. There's supportive seasonal background into end-Jun. [NR]

R5: 9.4425 * 15-May high
R4: 9.42~ Apr, May highs 
R3: 9.38~ 14-8-May high volm
R2: 9.35~ * Apr-May high volm 
R1: 9.2935 Wed high 
S1: 9.24 Wed rally accel 
S2: 9.2225 * April low 
S3: 9.2215 last week low 
S4: 9.1680 * 26-May low S5: 9.1550 18-Mar low
: * Importance: show with none, 1 or 2 asterisks

 

WorldWide Chart Analyst

 

By worldwide-invest

 

Source:http://worldwide-invest.org/content/4270-forex-chart-eur-sek-update-rallied-range-floor.html

 

1. Categories:
 
2. WorldWide Chart Analysis

Bitcoin Price Steady; Finally Some Action?

Action overnight on Wednesday was pretty mute, as relatively low volume translated to little or non-existent movement in the bitcoin price during the Asian session. We highlighted a couple of the key levels we were watching yesterday evening, and – while these levels have pretty much held – we didn’t get the breakout we were looking for in order to put us into a position. With this said, hopefully we will get some more decisive movements in the bitcoin price today. If we do, what are the levels we are looking for to put us long or short in the market, and where will we be looking to trade towards if we get in? Take a quick look at the chart.

 

As you can see, we have narrowed today’s parameters quite considerably, and we are looking at 234.89 as in term support and 236.06 as in term resistance. We are currently hovering just ahead of aforementioned support, so we will address this first. If we can get a break below 234.89, and a close on the 15 minute candlestick chart, it will put us short towards an initial downside target of 233 flat. Not a huge amount of reward is available to us to the downside, so a tight stop is required – somewhere around 235.5 will be enough to take us out of the trade in the event the price reverses and turns back to trade within the range.

Looking the other way, if support holds at 234.89, we will look for a run up towards – and a break of – 236.06 to put us long towards a short-term upside target of 237.35. If we get beyond that, it would bring 240 into play. Once again, a tight stop is required on this trade, since somewhere around 235.40 looks fine as far as maintaining a positive risk reward profile is concerned.
Charts courtesy of Trading View

 By Samuel Rae

Source:http://www.newsbtc.com/2015/05/28/bitcoin-price-steady-finally-some-action/

More Signs of Bitcoin Gaining Traction in Indonesia

While most bitcoin startups are based in developed nations such as the US or the UK, there has been steady growth in developing countries as well. In particular, Indonesia has seen signs of bitcoin gaining traction in the payments and money remittance sector.

A report released in the Wall Street Journal revealed that majority of the locals started to use bitcoin online and began to appreciate bitcoin’s low transaction fees and speed. Bitcoin exchanges have also opened left and right, allowing investors to profit from price changes in the cryptocurrency.

Bitcoin Developments in Indonesia

“Most Indonesians currently use bitcoin to pay for services online, such as web hosting. They can also use the digital currency to book hotel rooms through travel websites hosted overseas rather than use credit cards, which only a small percentage of the population currently own,” the WSJ article indicated.

However, the article also noted that the Bank of Indonesia currently does not recognize bitcoin as legal tender, constantly warning the public about risks associated with transacting using cryptocurrency. Despite that, three big bitcoin startups (Bitcoin.co.id, Blossom, and Quoine) have been able to set up shop in the country to take advantage of the digital currency’s growing popularity.

Bitcoin Indonesia, which is one of the exchanges operating in the country, reported growth in its client base. The company has seen a trading volume of 200 bitcoin daily, catering to roughly 56,000 customers. “Many people think that Bitcoin is unheard of in Indonesia, but the fact is its popularity is soaring now,” Bitcoin Indonesia CEO Oscar Darmawan said.

Some bitcoin startups from abroad have also relocated their offices in Indonesia to fill in the gaps with the country’s poor payments systems. Bitcoin payments have also proved to be beneficial for the country’s strong tourism industry, as Indonesia’s beaches are often frequented by foreigners who transact using cryptocurrency.

By Sarah Jenn

Source:http://www.newsbtc.com/2015/05/27/more-signs-of-bitcoin-gaining-traction-in-indonesia/ 

Switzerland To Open Bitcoin Bank As Crypto "Fort Knox" Relocates To Zurich

Switzerland's financial center is likely to be rich in the near future to one facet. Currently, preparations are underway for the establishment of the first Bitcoin Bank. The reportedly from multiple sources in the financial sector. Corresponding discussions with the Financial Market Supervisory Authority are to take place in these days. To date, there is in Switzerland no bank that offers services with the new digital currency Bitcoin.

The initiators of the project confirmed the facts: "The application for a banking license, we will submit in the next few weeks," says Guido Rudolphi. The IT specialist is one of a group of eight people, which are behind the planned establishment of the financial institution. «First investors are on board, and it runs the search for suitable premises." To which company is which ultimately applied for a banking license, did Rudolphi competitive reasons forequarters not say...

From traditional institutions they first distinguished by the intended clientele. For future customers include about companies that generate income and revenues in Bitcoin and at the same time require access to the traditional banking system. These are examples Bitcoin exchanges, Bitcoin broker, pay providers and software platforms on which the new digital currencies play a role. Until now such companies - although based in Switzerland - the most costly detour via foreign banks go.

By  Tyler Durden

Source:http://www.zerohedge.com/news/2015-05-27/switzerland-open-bitcoin-bank-crypto-fort-knox-relocates-zurich

Australian Dollar Drops as Capex Data Fuels RBA Rate Cut Bets

Australian private capital expenditure fell 4.4 percent in the first quarter of 2015, which was the largest decline since the three months through September 2009. The Australian Dollar declined more than 1 percent against its US counterpart. Simultaneously, Australian government bond yields declined, with 3-year yields down as much as 7 basis points. That suggested that the soft data set weighed on RBA monetary policy expectations, with traders perhaps betting on the resumption of interest rate cuts on the horizon. 

 

DailyFX by Daniel Dubrovsky

Source:http://www.dailyfx.com/forex/market_alert/2015/05/28/Australian-Dollar-Drops-as-Capex-Data-Fuels-RBA-Rate-Cut-Bets.html

GBP/USD at Risk for Rebound on Upbeat 1Q U.K. GDP Report

Trading the News: U.K. Gross Domestic Product (GDP)

An upward revision in the U.K. 1Q Gross Domestic Product (GDP) print may heighten the appeal of the British Pound and spur a near-term rebound in GBP/USD as signs of a stronger recovery raises the Bank of England’s (BoE) scope to normalize monetary policy sooner rather than later.

What’s Expected:

Why Is This Event Important:

 

A marked uptick in the growth rate may spur a growing dissent within the Monetary Policy Committee (MPC) as the central bank remains on course to normalize monetary policy, and we may see a greater number of BoE officials prepare U.K. households and business for higher borrowing-costs as the economy gets on a firmer footing.

 

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Construction Output s.a. (YoY) (MAR)	1.1%	1.6%
ILO Unemployment Rate (3M) (MAR)	5.5%	5.5%
Industrial Production (MoM) (MAR)	0.0%	0.5%

The pickup in business outputs along with the ongoing improvement in the labor market may stoke a larger-than-expected upward revision in the growth rate, and a positive development may produce a bullish reaction in the sterling as it boosts interest rate expectations.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Trade Balance (MAR)	-2.400B	-2.817B
Mortgage Approvals (MAR)	62.5K	61.3K
Retail Sales inc. Auto Fuel (YoY) (MAR)	5.4%	4.2%

However, the widening trade deficit paired with the ongoing slack in private-sector activity may drag on the growth rate, and a dismal GDP figure may further delay the BoE’s normalization cycle especially on the back of the uncertainties clouding the outlook for fiscal policy.

Bullish GBP Trade: U.K. 1Q GDP Expands Annualized 2.5% or Greater

• Need to see green, five-minute candle following the GDP report to consider a long trade on GBP/USD.
• If market reaction favors a long sterling trade, buy GBP/USD with two separate position.
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bearish GBP Trade: Growth Rate, Personal Consumption Falls Short of Market Forecast

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish British Pound trade, just in the opposite direction.

Potential Price Targets For The Release

 GBP/USD Daily

Chart - Created Using FXCM Marketscope 2.0

• GBP/USD remains at risk for further weakness as price & the RSI fail to retain the bullish formation carried over from April; .
• DailyFX Speculative Sentiment Index (SSI) shows the retail crowd remains net-long GBP/USD since May 21, with the ratio currently standing at +1.40.
• Interim Resistance: 1.5550 (61.8% expansion) 1.5570 (38.2% retracement)
• Interim Support: 1.5180 (23.6% retracement) to 1.5190 (50% retracement)

 

Impact that the U.K. GDP report has had on GBP/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
4Q P 2014	02/26/2015 09:30 GMT	2.7%	2.7%	+3	-123

4Q 2015 U.K. Gross Domestic Product (GDP)

The U.K. Gross Domestic Product (GDP) report was largely in-line with market expectation as the economy grew another annualized 2.7% during the last quarter of 2014. Even though the BoE remains on course to normalize monetary policy, the Bank of England (BoE) may retain its wait-and-see approach throughout 2015 as the ongoing slack in the real economy dampens the outlook for growth and inflation. The initial market reaction in the British Pound was short-lived, with GBPUSD sliding below the 1.5500 handle and ending the day at 1.5402.

DailyFX written by David Song, Currency Analyst and Shuyang Ren
Source:http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/trading_news_reports/2015/05/27/GBP-USD-at-Risk-for-Rebound-on-Upbeat-1Q-U.K.-GDP-Report.html 

MNKD - Technical Analysis (STRONG BUY)

Technical Indicators (Daily)

 


Source:http://lusitanianstraders.blogspot.pt/2015/05/mnkd-technical-analysis-strong-buy.html

Natural Gas Futures - Technical Analysis

Technical Indicators (Daily)

 
 
 

Source:http://lusitanianstraders.blogspot.pt/2015/05/natural-gas-futures-technical-analysis_28.html

GOLD - Technical Analysis

Technical Indicators (Daily)

Source:http://lusitanianstraders.blogspot.pt/2015/05/gold-technical-analysis_28.html

FOREX-Dollar hits highest vs yen since 2002, Aussie sags on capex disappointment

TOKYO/SYDNEY, May 28 (Reuters) - The dollar hit its highest since December 2002 against the yen on Thursday due to expectations that U.S. interest rates will rise later this year, while the Australian dollar struck a six-week low following disappointing capital expenditure data.

The greenback soared as high as 124.30 yen, and last stood at 124.15 yen.

"Macro (Shenzhen: 000533.SZ - news) funds betting on a September Fed rate hike have increased their long exposure to the dollar, which was the main driving force behind the rise this week," said Yunosuke Ikeda, head of FX strategy at Nomura Securities, which has many hedge fund clients.

In addition, a rise in Tokyo stocks also helped to boost risk appetite and hurt the safe-haven yen, which has been under pressure also from the Bank of Japan's aggressive monetary stimulus since 2013.

"Longer-term, little stands in the way of further JPY losses," said Greg Moore, senior currency strategist at RBC (Other OTC: RBCI - news) .

But traders added that players are now wary of potential verbal intervention by Japanese officials to steady the yen.

On Wednesday, Japanese policymakers cautioned markets against pushing the yen down too rapidly.

Finance ministers and central bankers from the Group of Seven industrialized nations will discuss recent foreign exchange movements when they meet in Germany this week, a senior Canadian official said on Monday.

Nomura's Ikeda said he doubts if the dollar/yen pair will test the 125 yen-mark anytime soon. "I expect hedge funds will lock in profits before next week's U.S. payroll report (due on Friday next week)."

The dollar, however, shed some ground against the euro amid tentative hopes that cash-strapped Greece may be nearing a deal to secure fresh funding.

The euro bounced off a one-month low of $1.0819 to reach $1.0911, snapping a recent string of falls.

The Greek government said on Wednesday it is starting to draft an agreement with its euro zone partners and the International Monetary Fund that would pave the way for aid.

However, European officials have dismissed this as wishful thinking. German Finance Minister Wolfgang Schaeuble said he was surprised by the upbeat tone from some Greek government officials.

Still, the steadier euro saw the dollar index dip to 97.274, from a one-month peak of 97.775.

Among commodity currencies, the Australian dollar skidded more than half a U.S. cent after weaker-than-expected business investment figures fuelled expectations for more easing by the Reserve Bank of Australia.

The Aussie fell to $0.7671 from $0.7755 before the data, hitting its lowest level in six weeks.

The New Zealand dollar fared better after the country's dairy co-operative Fonterra said it expected global demand for dairy products to eventually recover.

The kiwi dollar changed hands at $0.7235, down 0.3 percent on the day. (Editing by Simon Cameron-Moore)

Reuters by Tomo Uetake and Ian Chua

Source:https://uk.finance.yahoo.com/news/forex-dollar-hits-highest-vs-040905515.html

Forex - Brazil Flows: BRL still suffering from USD global strength. DI rates up

BRL is starting the day down by 0.4%, to 3.165 reflecting USD global strength on the back of concerns over Greece and bets that the US Fed may start hiking by September. Senate approved overnight part of the fiscal adjustment. BCB will offer 8.1K FX Swaps continuing the roll over of the US$9.7bn maturing on the 1st of June of which 80% is expected to be rolled over. Di rates are up following BRL weakness an, as market increases inflation and Selic forecasts. Jan 17 is up 4bps to 13.32% and Jan 21 is up 8bps to 12.48%. The market will look at credit data later on and another measure of consumer confidence, likely to show more weakness as the labour market softens, fiscal belt tightens and inflation remains high. Very limited data in the US, with only Dallas Fed's May services sector survey is due at 14:30GMT.

 by worldwide-invest Published on 27-05-2015

 Source:http://worldwide-invest.org/content/4243-forex-brazil-flows-brl-suffering-usd-global-strength-di-rates.html

EUR/USD nears weekly S1 at 1.0856

Technical Analysis

EUR/USD nears weekly S1 at 1.0856

“A lot of people thought that might be the end of the big dollar rally but, to me, this is still the early days. The divergence has not reached its peak yet and, because of that, I’m not sure the dollar has either.”
- Brown Brothers Harriman & Co. (based on Bloomberg)

• Pair’s Outlook 
  On Tuesday, the single European currency remained under significant bearish pressure, as US fundamentals pushed EUR/USD below 1.09. The pair dropped to one-month lows and was stopped by the weekly S1 at 1.0856, the lowest level since April 28. The focus remains on the downside, while the medium-term target is currently placed at 1.0774 (Bollinger band/Apr 24 low), with the possibility to drop as low at 1.0740 (monthly S1).
• Traders’ Sentiment 
  The gap between long and short positions narrowed to minimal, as bulls are currently keeping 49% of all opened positions. Meanwhile, the commands to buy the Euro against the US Dollar in 100-pip range from the spot recovered 5% from Tuesday to reach 45%.

GBP/USD extends the correction for the second week

“They [US New Home Sales] weren't extraordinary but good enough for a return to considering higher U.S. interest rates this year.”
- National Australia Bank (based on CNBC)

• Pair’s Outlook 
  Yesterday, the Sterling declined slightly more than anticipated, as the Cable crossed the immediate support at 1.5406, before stabilising at 1.5390. Moreover, the pair even reached a two-week low of 1.5350. Although the weekly S1 limited the losses, the support is likely to be breached today, with the second closest support located at 1.5260. Meanwhile, technical indicators keep giving mixed signals, unable to confirm the bearish scenario, as the Pound is edging higher during the morning hours.
• Traders’ Sentiment
  Market sentiment weakened, as only 44% of traders hold long positions (previously 48%). The share of purchase orders dropped down by four percentage points 53%.

USD/JPY struggles to overcome 123 area

“With U.S. interest yields looking to move up, that has been supportive of the dollar against the yen.”
- Action Economics (based on Reuters)

• Pair’s Outlook 
  On Tuesday, the US Dollar skyrocketed and crossed the two closest resistance clusters. During the trading session the Greenback managed to reach the 2007 high, but was pushed back and, eventually, closed trade at the 123 psychological level. Technical indicators are showing bullish signs, suggesting the USD/JPY will surge again. However, a strong resistance cluster lies on the way around 123.10, which might force the pair to bounce back, as the Buck already failed to pierce the 2007 high again today.
• Traders’ Sentiment 
  Long positions lost one more percentage point, now taking up 56% of the market. The number of buy orders also decreased, from 71 to 62%.

XAU/USD pierces through monthly PP

“I think the Fed would raise rates at least once this year and it's likely in September.”
- Phillip Futures (based on CNBC)

• Pair’s Outlook 
  After four consecutive days of sluggish changes, the precious metal slipped considerably on Tuesday, while pricing US fundamentals. The nearest support, represented by monthly PP, weekly S1 and 55-day SMA failed to help the bullion to reverse losses or limit them. Therefore, XAU/USD slumped as low as 1,187 by the end of the trading. The bullion is now required to return back above 1,194 in order to preserve any possibility of a rebound. Otherwise, the cross will come under major negative pressure, and bears will eventually target the April low at 1,169.
• Traders’ Sentiment 
  Advantage of bulls over bears at the SWFX market improved noticeable from yesterday, as the gap between them widened even more during the past 24 hours. The total share of bulls currently stays at 61% versus 39% for bears.

By worldwide-invest published on 27-05-2015
Source:http://worldwide-invest.org/content/4220-eur-usd-nears-weekly-s1-1-0856-a.html?utm_source=dlvr.it&utm_medium=linkedin