Weekly Outlook: 2015, November 15 - November 22

Trade Ideas For EUR/USD, USD/JPY, AUD/USD, USD/CAD - UBS

Attachment 16593

EUR/USD: "We think the move lower will continue and any disappointment in today's US data would provide an opportunity to add to shorts towards 1.0820/30."

USD/JPY: "The pair will be a risk play today so follow whatever equities do. As it is Friday, some market participants may want to take positions off of the table. Look to sell USDJPY ahead of 123.00, with a stop at 123.30."

AUD/USD: "We think the pair remains a sell on rallies. There is good short-term resistance between 0.7150 and 0.7180 and the key pivot is the downtrend line that comes in around 0.7270. As long as this stays intact, we prefer playing the pair from the short side."

USD/CAD: "We prefer buying dips, ideally between 1.3230 and 1.3200, with a stop through 1.3150."

the source

Credit Suisse made a forecast for EUR/USD for 2016 estimated 1.00 as the first target and 0.85 as the second one. Let's evaluate this forecast with the technical point of view. EUR/USD: bearish ranging near S2 Pivot level. This pair is on bearish market condition for the ranging within S1 Pivot at 1.1337 and S2…

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Forex Weekly Outlook November 16-20

The US dollar had a mixed week after the NFP. Japan GDP data, Inflation data from the UK, the US and Canada and a rate decision in Japan stand out. These are the main events on forex calendar. Here is an outlook on the market-movers for this week.

A long list of Fed speakers basically left expectations for a Fed hike unchanged, thus leaning towards a move in December. Yellen remained silent. In the euro-zone. Data was mixed, with a disappointment in retail sales but upbeat consumer confidence also a positive JOLTs report, Draghi reiterated his desire to act in December: provide more easing. In Australia, the jobs report was excellent and falling oil prices weighed on the Canadian dollar.

• Japan GDP data: Sunday 23:50. Japan’s economy contracted 0.4% in the second quarter, when Gross domestic product declined by an annualized 1.6% between April to June. The contraction was less than expected, but consumer spending and investments weakened. Many economists believe inflation will not reach the 2% target by summer 2016 expecting further monetary easing in the coming months. GDP is expected to remain negative at -0.1%.
• Mario Draghi speaks: Monday. 10:15 and Friday, 8:00. ECB President Mario Draghi will give speeches in Madrid and in Frankfurt. During his talk before the European Parliament last week, Draghi dropped another hint that the ECB is preparing further monetary easing measures to boost the Eurozone’s recovery. The ECB president admitted that the 2% inflation target will take longer to achieve and that the central bank will re-examine a QE program in early December. Market volatility is expected.
• UK inflation data: Tuesday, 9:30. UK Consumer Prices fell to -0.1% in September hovering close to zero for most of this year. Food prices declined by 2.5% in the year amid ongoing supermarket price wars. According to the low CPI release, the Bank is in no hurry to raise rates anytime soon. Furthermore, core CPI also remained weak at 1.0% suggesting no underlying inflationary pressures despite continuing strength in wage growth. Consumer prices are expected to remain at -0.1%.
• German ZEW Economic Sentiment: Tuesday, 10:00 German analysts and investors sentiment plunged in October to 1.9 points, following 12.1 in September amid the scandal at Volkswagen and the weakness in emerging markets. Analysts expected a reading of 6.8. Current conditions declined to 55.2 points from 67.5 points in September, below expectations for a drop to 64.7. German economic sentiment is expected to reach 6.7% this time.
• US inflation data: Tuesday, 13:30. Consumer prices in the U.S. declined 0.2% in September while Core CPI excluding the volatile food and energy sectors gained 0.2%. Analysts expected CPI to drop 0.2% and Core CPI was predicted to rise by 0.1%. Despite the fall in headline inflation, core prices edged up 1.9% in the past 12-months, from 1.8% the prior month getting closer to a December rate hike call. The energy index plunged 4.7% in September. A continued decline in the gasoline index, this time by 9%, was the main cause in the decline for overall CPI. Both CPI and Core CPI are forecasted to rise 0.2% in October.
• US Building Permits: Wednesday, 13:30. Building permits declined 5% to a 1.1 million pace in September the lowest number since March. Meanwhile, applications for single-family projects declined 0.3% to a 697,000 unit pace; indicating this component will come to a standstill in the coming months. However, housing starts were encouraging consistent with the builders increasing confidence in the outlook for their industry. The number of permits is expected to reach a unit pace of 1.15 million in October.
• US FOMC Meeting Minutes: Wednesday, 19:00. In the Fed’s October decision, the tone was relatively hawkish regarding inflation and employment, not expressing real worries. In addition, they provided a hint about action in December. The minutes may reveal how hawkish the members really are and how close a December hike is real. Note that the excellent NFP was released in the meantime, and that the Fed edits the minutes until the last minute before the publication. Markets always move by any wording nuances.
• Japan rate decision: Thursday. The Bank of Japan maintained its monetary policy, refraining from adding further stimulus at its policy meeting in October. However, the members reiterated their promise to increase the monetary base at an annual rate of 80 trillion yen ($660 billion). At the Press conference, following the meeting, BOJ Governor Haruhiko Kuroda said there were no proposals to ease monetary policy during the meeting, and blamed the low energy prices for the failure to achieve the BOJ’s inflation target.
• US Unemployment Claims: Thursday, 13:30. New U.S. applications for unemployment benefits remained unchanged last week, indicating strong labor market conditions. The data was worse than the 270,000 forecasted but still supports the Federal Reserve call to raise interest rates next month. The four-week moving average of claims rose 5,000 to 267,750 last week, still close to a 42-year low. The number of people continuing to receive benefits after an initial week of aid increased 5,000 to 2.17 million last week. Jobless claims for this week are expected to reach 272,000.
• US Philly Fed Manufacturing Index: Thursday, 15:00. The Philadelphia manufacturing index remained in negative territory for the second month in a row reaching -4.5 in October after posting -6 in the prior month. The negative figures show sharp slowing in the manufacturing sector. The strength of the US dollar has been weighing on US industry since last fall, making products less competitive in the global market. Philadelphia manufacturing index is expected to rise to 0.1 in November.

the source

US Dollar Forecast – US Dollar Remains in Control, but Can it Really Hold its Gains
"Momentum clearly remains in the US Dollar’s favor as it trades near key multi-year peaks, and we head into the coming trading week cautiously bullish. Yet it is likewise clear that markets could shift in an instant, and it will be important to remain nimble in what looks to be another indecisive week of price action."

Attachment 16615

British Pound Forecast – GBP/USD Bounces Up to a Lower High Ahead of UK Inflation Data
"From a technical perspective, the Sterling is still confined to the down-trending channel against its US counterpart. Today’s Doji formation may be a prelude to an evening star, and should Monday’s candle close below 1.5210, the formation will be complete, and this could be an attractive way to sell the pair."

Attachment 16616

Japanese Yen Forecast – USD/JPY Stuck in Continuation Pattern Ahead of Japan GDP, BoJ Meeting
"In turn, the fundamental developments coming out US/Japan are likely to spark increased volatility in USD/JPY as market participants gauge the next move by the Fed/BoJ, but the pair may consolidate ahead of the major event risk as it appears to be stuck within a bull-flag formation. Nevertheless, the deviating paths for monetary policy accompanied by the continuation pattern in price continues to highlight a long-term bullish outlook for the dollar-yen especially as the pair breaks out of the range carried over from back in September."

Attachment 16617

Canadian Dollar Forecast – CAD Unable to Prevent Slide As Crude Oil Breaks Support
"If banks take note, this would have the Canadian Dollar replacing the Euro as the carry trade funder, and likely add to the pressure on the Oil-driven currency to continue to see the largest capital outflow of G10FX."

Attachment 16618

Australian Dollar Forecast – Australian Dollar May Stall on FOMC Minutes, US CPI
"More of the same on display in the Minutes document may amplify Fed vs RBA policy divergence policy divergence bets, regardless of a more supportive outlook for the Australian monetary authority. US core inflation is expected is expected to register at 1.9 percent for the second consecutive month and may reinforce this dynamic."

Attachment 16619

New Zealand Dollar Forecast – Fonterra Milk Auction To Put Spotlight on RBNZ’s Next Move
"The Commitment of Traders (CoT) report showed that speculative NZD longs recently outweighed shorts by 20% vs. previous 18%. This positioning data shows that speculative positioning, which is notoriously fickle, is still convincingly long-kiwi, and that increases the risk of a sell-off if USD moves higher in near-future."

Attachment 16620

Gold Forecast – Gold: Here’s What to Look for After this Historic Run
"Look for interim resistance at 1096/99 on a rebound with only a breach above former TL resistance dating back to the 2015 highs (~1112) invalidating the near-term downtrend. A break below the July low targets objectives at the 100% extension of the decline off the yearly high at 1067 and the broader 61.8% extension of the decline off the 2012 high at 1053. Bottom line: gold prices are at risk for a near-term rebound early next week which may offer more favorable short entries."

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