Weekly Outlook: 2014, May 04 - 11

EUR/USD forecast for the week of May 5, 2014, Technical Analysis

EUR/USD fell during a large portion of the week, but found enough support below in order to bounce and form a hammer. We believe this hammer is simply a sign that the market wants to go higher, but we recognize that the 1.40 level is crucial at this point. Mario Draghi has essentially stated that the 1.40 level is the “line in the sand” at the moment, so as a result we think that every time this market comes near there we will see a bit of selling pressure.

Forex - Weekly outlook: May 5 - 9

The dollar gave up gains against most of the other major currencies on Friday after a report showing that the U.S. economy added jobs at the fastest pace in more than two years in April also showed weaker earnings growth and a drop in labor force participation.

The Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five and a half year low of 6.3%, compared to expectations for 6.6%.

The report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged down in April from the same month last year, dampening the medium term inflation outlook.

Earlier in the week, preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.

Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.

The dollar initially moved broadly higher after the jobs report, with USD/JPY rising to 103.01, the strongest since April 8. The pair subsequently retraced these gains, ending the session at 102.18. The pair ended the week 0.33% lower.

EUR/USD fell to lows of 1.3812 before recovering to trade at 1.3869 by the close of Friday’s session.

Concerns that the euro zone is falling into deflation persisted after data on Wednesday showed that the annual rate of inflation ticked up to 0.7% in April, from a record low 0.5% the previous month, but still remained well below the European Central Bank’s target of close to but just below 2%.

The slight uptick in consumer prices did ease pressure on the ECB to implement further monetary easing measures to tackle low inflation in the region.

GBP/USD ended the session slightly lower at 1.6874, after falling as low as 1.6824 earlier in choppy trade. The pair neared five year highs in the previous session after upbeat U.K. manufacturing data added to expectations for a rate hike by the Bank of England in the early part of next year.

In the week ahead, market participants will be focusing on Thursday’s ECB monetary policy announcement. Rate reviews by BoE and the Reserve Bank of Australia will also be closely watched. Australia, New Zealand and Canada are all to release employment reports and the U.S. is to produce data on service sector activity.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 5

• Markets in Japan are to remain closed for a national holiday. Australia is to produce data on building approvals, while China is to publish the final reading of its HSBC manufacturing index for April.
• Markets in the U.K. are to remain closed for the May Day holiday.
• In the U.S., the Institute of Supply Management is to publish a report on service sector activity.

Tuesday, May 6

• Markets in Japan are to remain closed for a national holiday.
• The RBA is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. Australia is also to publish data on the trade
• The euro zone is to produce data on retail sales, while Spain is to release reports on employment and service sector activity. Italy is also to publish service sector data.
• The U.K. is to publish what will be a closely watched report on service sector growth.
• Later Tuesday, both Canada and the U.S. are to release data on trade, while Canada is also to publish its Ivey PMI.

Wednesday, May 7

• New Zealand is to release data on the change in the number of people employed and the unemployment rate, while Australia is to produce a report on retail sales.
• The Bank of Japan is to publish monetary policy meeting minutes.
• In the euro zone, Germany is to publish data on factory orders.
• The Swiss National Bank is to publish data on its foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets.
• Canada is to produce data on building permits.
• Later Wednesday, Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• Australia is to release data on the change in the number of people employed and the unemployment rate.
• Switzerland is to produce a report on consumer price inflation.
• In the euro zone, Germany is to publish a report on industrial production.
• The BoE is to announce its benchmark interest rate.
• Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
• Also Thursday, Canada is to release data on new house price inflation and the U.S. is to publish the weekly report on initial jobless claims.

Friday, May 9

• The RBA is to publish its monetary policy statement. Meanwhile, China is to produce a report on consumer price inflation.
• In the euro zone, Germany is to release data on the trade balance.
• The U.K. is to publish data on manufacturing and industrial production, as well as data on the trade balance.
• Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.

USD/CHF weekly outlook: May 5 - 9

The U.S. dollar ended Friday’s session lower against the Swiss franc after briefly rising when the latest U.S. jobs showed that the unemployment rate dropped to a more than five year low last month but also pointed to weaker earnings growth and a drop in labor force participation.

USD/CHF initially rose to session highs of 0.8842 before falling back to settle at 0.8779 at the close, down 0.14%. For the week, the pair lost 0.27%.

The pair is likely to find support at 0.8740 and resistance at 0.8825.

The Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five and a half year low of 6.3%, compared to expectations for 6.6%.

The report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged down in April from the same month a year earlier, dampening the medium term inflation outlook.

Earlier in the week, preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.

Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.

In the week ahead, investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy.

Meanwhile, the Swiss National Bank is to release data on foreign currency reserves.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.

Monday, May 5

• The Institute of Supply Management is to publish a report on U.S. service sector activity.

Tuesday, May 6

• The U.S. is to release data on the trade balance, the difference in value between imports and exports.

Wednesday, May 7

• The SNB is to publish data on its foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets.
• Later Wednesday, Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• Switzerland is to produce a report on consumer price inflation, which accounts for the majority of overall inflation..
• The U.S. is to publish the weekly report on initial jobless claims.

USD/JPY weekly outlook: May 5 - 9

The dollar ended Friday’s session slightly lower against the yen after initially rising to more than three-week highs following data showing that the U.S. economy added jobs at the fastest pace in more than two years last month.

The dollar strengthened after the Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five and a half year low of 6.3%, compared to expectations for 6.6%.

But the dollar quickly gave back gains after the report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged lower in April from the same month a year earlier, dampening the medium term inflation outlook.

USD/JPY hit highs of 103.01, the strongest level since April 8, before retracing these gains to end the session at 102.18. The pair ended the week 0.33% lower.

The pair is likely to find support at 101.95, the low of April 25 and resistance at 102.65.

Earlier in the week, preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.

Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.

Also Wednesday, the Bank of Japan refrained from implementing additional stimulus measures at the conclusion of its two-day policy meeting. The BoJ stuck to its pledge to target an annual increase in the monetary base of between ¥60 trillion and ¥70 trillion, in a widely anticipated decision.

In the week ahead, markets in Japan will be closed for holidays on Monday and Tuesday. Investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.

Monday, May 5

• Markets in Japan are to remain closed for a national holiday.
• In the U.S., the Institute of Supply Management is to publish a report on service sector activity.

Tuesday, May 6

• Markets in Japan are to remain closed for a national holiday.
• The U.S. is to release data on the trade balance, the difference in value between imports and exports.

Wednesday, May 7

• The BoJ is to publish monetary policy meeting minutes.
• Later Wednesday, Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• The U.S. is to publish the weekly report on initial jobless claims.

Forex - USD/CAD weekly outlook: May 5 - 9

The Canadian dollar fell against the U.S. dollar on Friday following a stronger-than-forecast U.S. jobs report, but pared back losses amid concerns that the upbeat data would not prompt the Federal Reserve to raise interest rates sooner than expected.

USD/CAD touched highs of 1.1005, the most since April 29, before retracing some of those gains to close at 1.0971, 0.10% higher for the day. The pair lost 0.47% on the week.

The pair is likely to find support at 1.0920 and resistance at 1.1030.

The Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five and a half year low of 6.3%, compared to expectations for 6.6%.

The report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged down in April from the same month a year earlier, dampening the medium term inflation outlook.

Earlier in the week, preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.

Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.

In the week ahead, investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy.

Meanwhile, Canada is to publish its jobs report for April on Friday.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 5

• In the U.S., the Institute of Supply Management is to publish a report on service sector activity.

Tuesday, May 6

• Both Canada and the U.S. are to release data on trade, while Canada is also to publish its Ivey PMI.

Wednesday, May 7

• Canada is to produce data on building permits.
• Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• Canada is to release data on new house price inflation, while the U.S. is to publish the weekly report on initial jobless claims.

Friday, May 9

• Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.

AUD/USD weekly outlook: May 5 - 9

The Australian dollar fell to a five-week low against its U.S. counterpart on Friday, before turning modestly higher as market players digested a report showing that the U.S. economy added more jobs than expected last month, but also revealed weaker earnings growth and a drop in labor force participation.

AUD/USD fell to 0.9203 on Friday, the pair’s lowest since March 26, before erasing losses to subsequently consolidate at 0.9277 by close of trade, up 0.04% for the day and 0.08% higher for the week.

The pair is likely to find support at 0.9203, the low from May 2 and resistance at 0.9311, the high from May 1.

The U.S. dollar strengthened after the Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five-and-a-half year low of 6.3%, compared to expectations for 6.6%.

But the greenback quickly gave back gains after the report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged lower in April from the same month a year earlier, dampening the medium term inflation outlook.

In Australia, official data released Friday showed that producer price inflation rose 0.9% in the first quarter, more than the expected 0.6% gain, after a 0.2% uptick in the three months to December.

Meanwhile, heightened tensions between Moscow and the West remained in focus as Ukraine's army and pro-Russian rebels continued to skirmish on Friday, stoking fears that the crisis will develop and drag the U.S. deeper into the standoff.

The United Nation’s Security Council met about Ukraine on Friday in an emergency session, while U.S. President Barack Obama threatened to slap fresh sanctions on Russia if Moscow disrupts Ukrainian elections scheduled for May 25.

The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.

Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the Australian dollar in the week ending April 29.

Net longs totaled 10,706 contracts, compared to net longs of 16,370 in the preceding week.

In the week ahead, investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy.

Tuesday’s rate decision by the Reserve Bank of Australia will also be in focus, as well as highly-anticipated Australian employment data due Thursday.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 5

• Australia is to produce data on building approvals, while China is to publish the final reading of its HSBC manufacturing index for April.
• In the U.S., the Institute of Supply Management is to publish a report on service sector activity.

Tuesday, May 6

• The RBA is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. Australia is also to publish data on the trade balance.
• The U.S. is to release data on its trade balance.

Wednesday, May 7

• Australia is to produce a report on retail sales.
• Later Wednesday, Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• Australia is to release data on the change in the number of people employed and the unemployment rate.
• The U.S. is to publish the weekly report on initial jobless claims.

Friday, May 9

• The RBA is to publish its monetary policy statement. Meanwhile, China is to produce a report on consumer price inflation.

NZD/USD weekly outlook: May 5 - 9

The New Zealand rallied to a more than two-week high against its U.S. counterpart on Friday, as investors reacted to a report showing that the U.S. economy added more jobs than expected last month, but also revealed weaker earnings growth and a drop in labor force participation.

NZD/USD rose to 0.8670 on Friday, the pair’s highest since April 15, before subsequently consolidating at 0.8664 by close of trade, up 0.36% for the day and 0.96% higher for the week.

The pair is likely to find support at 0.8591, the low from May 2 and resistance at 0.8688, the high from April 15.

The Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five-and-a-half year low of 6.3%, compared to expectations for 6.6%.

But optimism was tempered after the report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged lower in April from the same month a year earlier, dampening the medium term inflation outlook.

Earlier in the week, preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.

Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.

Meanwhile, heightened tensions between Moscow and the West remained in focus as Ukraine's army and pro-Russian rebels continued to skirmish on Friday, stoking fears that the crisis will develop and drag the U.S. deeper into the standoff.

The United Nation’s Security Council met about Ukraine on Friday in an emergency session, while U.S. President Barack Obama threatened to slap fresh sanctions on Russia if Moscow disrupts Ukrainian elections scheduled for May 25.

The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.

Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the New Zealand dollar in the week ending April 29.

Net longs totaled 18,480 contracts as of last week, compared to net longs of 20,175 contracts in the previous week.

In the week ahead, investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy.

Employment data out of New Zealand scheduled for Wednesday will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 5

• China is to publish the final reading of its HSBC manufacturing index for April. The Asian nation is New Zealand’s second largest export partner.
• In the U.S., the Institute of Supply Management is to publish a report on service sector activity.

Tuesday, May 6

• The U.S. is to release data on the trade balance.

Wednesday, May 7

• New Zealand is to release data on the change in the number of people employed and the unemployment rate.
• Later Wednesday, Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• The U.S. is to publish the weekly report on initial jobless claims.

Friday, May 9

• China is to produce a report on consumer price inflation.

GBP/USD weekly outlook: May 5 - 9

The pound ended Friday’s session slightly lower against the dollar in choppy trade after data showed that the U.S. economy added far more jobs than expected last month, but also indicated weak earnings growth and a drop in labor force participation.

GBP/USD fell to session lows of 1.6819, before trimming back losses to settle at 1.6874, just 0.11% lower for the day. For the week, the pair gained 0.39%.

Cable was likely to find support at 1.6819 and resistance at 1.6918, the previous session’s high and the strongest since August 2009.

The Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five and a half year low of 6.3%, compared to expectations for 6.6%.

The report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged down in April from the same month a year earlier, dampening the medium term inflation outlook.

Earlier Friday, data showed that the U.K. construction purchasing managers’ index came in at 60.8, down from March's reading of 62.5. It was the weakest reading since October 2013, but pointed to very solid growth in the sector.

Sterling rose to almost five year highs against the dollar on Thursday after data showed that manufacturing activity in the U.K. expanded at the fastest rate in five months in April, bolstering the outlook for the wider recovery.

A recent string of upbeat reports about the U.K. economy has raised expectations the Bank of England could raise borrowing costs ahead of other central banks.

The pound received an additional boost after preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first quarter, well below forecasts for an expansion of 1.2%.

Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.

In the week ahead, investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy. U.K. data on service sector growth and a rate review by the Bank of England will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 5

• Markets in the U.K. are to remain closed for the May Day holiday.
• In the U.S., the Institute of Supply Management is to publish a report on service sector activity.

Tuesday, May 6

• The U.K. is to publish what will be a closely watched report on service sector growth.
• The U.S. is to release data on the trade balance, the difference in value between imports and exports.

Wednesday, May 7

• Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.

Thursday, May 8

• The U.S. is to publish the weekly report on initial jobless claims.

Friday, May 9

• The U.K. is to round up the week with data on manufacturing and industrial production, as well as a report on the trade balance.

You are an honest to goodness day trader. You like to stay up to date with news and watch the markets for any moves for the duration of the day. As a well informed individual, you love your devices and most likely possess in any event a PC, a tablet, and an advanced cell. These gadgets help you to keep steady over the markets. Scientific and unprejudiced, you invest wholeheartedly in doing the math after you have done your research and information mining.