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Weekly Outlook: 2014, July 06 - 13
Forex Weekly Outlook July 7-11
The dollar managed to beat the euro and the yen, but stayed behind the mighty pound and the recovering loonie. Will these trends continue? The FOMC Meeting Minutes, Australian, Canadian employment figures and the rate decision in the UK are the main market movers on FX calendar. Here is an outlook on the top events this week.
The US labor market is certainly picking up, with a gain of 288K jobs and another drop of the unemployment rate to 6.1%. This has been the fifth straight month where job gains surpassed 200,000 positions. Job growth averaged 231,000 per month in the first half of the year. Is this enough to move the Fed? In the euro-zone, Draghi maintained a dovish message, leaving the door wide open to QE. The pound enjoyed positive PMIs and continued advancing against both currencies. The Australian dollar suffered a blow from the RBA after reaching highs while another commodity currency, the C$,enjoyed its momentum. Let’s start,
- JOLTS Job Openings: Tuesday, 14:00. This lagging measure of US employment is closely watched by the Fed, which looks at a wider array of job figures and not only the unemployment rate. Job openings jumped to 4.45 million in April and are now expected to advance to 4.53 million.
- FOMC Meeting Minutes: Wednesday, 18:00. In the June meeting, the Fed tapered for the fifth time as expected, and also lowered growth forecasts. In the accompanying press conference, Yellen maintained a dovish tone, weighing on the dollar. Given similar moves in the past, can the meeting minutes reveal a slightly more hawkish Fed than the initial message suggested?
- Australian employment data: Thursday, 1:30. Australia’s unemployment rate remained unchanged at 5.8% in May, despite an unexpected drop of 5.9% in the number of jobs. Analysts expected a rise of 10,000 positions as well as a climb to 5.9% in Jobless claims. However, not all was bad, the number of full time positions increased by 22,200 while part time positions declines by 27,000. The unemployment rate increased to a decade-high 6.0% in January, while analysts and the Treasury expecting it to edge higher this year during the transition away from mining-led growth. Australia’s job market is expected to increase by 12,300 while the unemployment rate is expected to stand at 5.9%.
- UK rate decision: Thursday, 11:00. There was a general belief that the BOE’s would not increase interest rates until after the General Election in May 2015. However recent market data suggests the central bank may raise rates to 3% much sooner. Mark Carney originally bonded between the UK unemployment rate and BOE base rate, saying he will raise rates of unemployment drops below 7%. This goal has been unexpectedly reached forcing Carney to change the rate hike trigger to18 economic indicators. Most analysts expect a gradual rise in rates which will continue until 2017 with a first rise to 0.75% within the fourth quarter of this year.No chnge in rates is expcted this time.
- US Unemployment Claims: Thursday, 12:30. Initial applications for jobless benefits inched higher by 2,000 last week to a seasonally adjusted 315,000, staying near pre-recession levels. The reading was broadly in line with market forecast. the four-week moving average of continuing claims dropped to 2,580,250, declining by 6,000 from the prior week’s revised level of 2,586,250. US jobless claims are expected to reach 316,000 this time.
- Canadian employment data: Friday, 12:30. Canada’s unemployment rate unexpectedly climbed to 7% in May from 6.9% in the previous month amid job addition of 25,800. The main gain was part time positions, while full employment dropped 29,100. The readings were broadly in line with market forecast. The bank of Canada stated that rising global demand and a lower Canadian dollar will boost Canadian economic growth. Canadian labor market is expected to add 26,200 jobs, while the unemployment rate is predicted to remain unchanged at 7%.
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1 Attachment(s)
US Dollar Fails to Break Despite Stellar NFPs. Where are the Trades?
US Dollar Fails to Break Despite Stellar NFPs. Where are the Trades?
Fundamental Forecast for Dollar: Bullish
- US Nonfarm Payrolls report beats all expectations, sends US Dollar higher
Attachment 8382
A sharply better-than-expected US Nonfarm Payrolls report helped push the Dollar positive for the first time in the past six weeks. Yet a virtually empty US economic calendar leaves little hope of big moves in the week ahead. And indeed, 1-week Euro/US Dollar volatility expectations finished at record lows following the Nonfarm Payrolls report. Clearly most are betting on/hedging against extremely slow moves ahead, but why didn’t NFPs change that?
The US labor market data was about as strong as anyone could have hoped for, and strong employment growth should force the US Federal Reserve to tighten monetary policy more quickly than expected. Yet there needs to be more for markets to start pricing in Fed rate hikes. The US 2-year Treasury Yield—a great proxy for medium-term interest rate expectations—spiked on the NFPs report only to fall short at the 09/2013 high and likely stick to its long-standing trading range.
Where might we see bigger currency volatility? Follow the interest rates. The British Pound is an obvious candidate as it trades at post-financial crisis highs, and it should be little surprise to note that UK government bond yields trade at fresh multi-year peaks.
The Euro should arguably be more sensitive to the fact that the European Central Bank has cut benchmark deposit rates into negative territory. Yet Euro Zone yields were already trading near zero percent even before recent ECB actions. Interest rate expectations remain muted in the US, Euro Zone, and across G10 currencies.
Thus if you can’t beat them, join them. It might be frustrating to trade in such low-volatility market conditions, but our real client data actually shows that most tend to do well in tight ranges.
There’s little sense in trading for big currency swings if market conditions remain as they are, and the fact that the US Dollar remains oversold against key counterparts and that in itself leaves us focused on USD gains in the week and month ahead.
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1 Attachment(s)
Exogenous Threat to Euro Exists as ECB Policy Diverges from BoE, Fed
Exogenous Threat to Euro Exists as ECB Policy Diverges from BoE, Fed
Fundamental Forecast for Euro: Neutral
- The Euro and Swiss Franc were under more intense pressure versus the British Pound, hitting new yearly lows.
- EURUSD was vulnerable going into Thursday and a breakdown may have just started after the strong US NFPs.
Attachment 8383
The Euro experienced a minor setback this week against most of its major counterparts, losing the most ground to the increasingly resilient and impressive British Pound. Even EURUSD had a late-week letdown on the back of the US labor market showing additional fortitude, as the US unemployment rate fell to a post-recession low of 6.1%, the lowest since September 2008. The recent barrage of important data on both sides of the pond suggests a widening differential in central bank policy, leaving the Euro at a disadvantage against the British Pound and the US Dollar going forward.
As traders were buying US Dollars on Thursday after the June US labor market showed the fifth consecutive month of jobs growth above +200K, European Central Bank President Mario Draghi was simultaneously holding court after the ECB policy meeting; the Governing Council’s latest actions did little to help support the Euro.
In absence of new policy action, ECB President Draghi’s greatest contribution on Thursday was to remind traders that not only would interest rates remain low for an extended period of time, but that the ECB was also intensifying prep work related to asset-backed securities (ABS) purchases.
The problem for the ECB with ABS purchases, which is why the market hasn’t taken the threat as a significant reason to drive Euro exchange rates lower, is that the ABS market in the Euro-Zone is not nearly as developed as it is in the United States; and therefore the amount of ABS purchases potentially necessary is difficult to quantify. The ECB, up until this point, was not (and still truly isn’t) necessarily aware of how big the ABS market was and how strong of a purchase program they would need to design.
While the threat of a major LSAP is certainly brewing, the clout behind the ECB’s potential €1 trillion TLTRO is rather weak, at least from the perspective that it could keep downside pressure on the EUR-crosses in a meaningful way. Simply put, these are not carte blanche liquidity injections; the rules published by the ECB on Thursday make well-clear their intention to improve liquidity channels and reduce credit fragmentation across the Euro-Zone.
If the TLTROs are effective, they end result will be capital used to boost organic growth opportunities rather than speculative reach for yield (in the US, the UK, and the Euro-Zone, open-ended QE is widely perceived as free money for financial institutions at the expense of taxpayers and savers, so the ECB is being careful to craft a program that won’t fan the speculative flames). Over time, the TLTROs could even prove to be broadly EUR-positive, but not for several months or years.
For now, the Euro is stuck with a central bank in holding position, preparing for its next move, as it waits and observes what its prior actions have resulted in. One thing is clear, however: the ECB is taking on a more dovish stance by expanding its non-standard policy easing toolbox, and has no intention of tightening policy within the next 12- to 18-months.
The ECB’s ‘lower for longer’ stance is prohibitive for the Euro because the British Pound and the US Dollar are being bombarded with strong economic data and rising sovereign yields as a result, as market participants start to price in interest rate hikes from the Bank of England and the Federal Reserve, respectively.
In this interim period of ECB inaction, we turn our attention outwardly to the BoE and the Fed as the more significant drivers of price action in EURGBP and EURUSD (and GBPCHF and USDCHF as well, given the highly significant, nearly perfect positive correlation between EUR and CHF since September 2011 when the SNB levied the Sf1.2000 floor in EURCHF).
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1 Attachment(s)
Bullish GBP/USD Outlook Remains Favorable Going into BoE Meeting
Bullish GBP/USD Outlook Remains Favorable Going into BoE Meeting
Fundamental Forecast for Pound: Bullish
- GBP/USD Hit Highest Level Since 2008 As UK Construction Data Surprise
- GBP/USD Long Term Measured Level at 1.7300
Attachment 8384
The GBP/USD extended the advance from June, with the pair climbing to a fresh yearly high of 1.7175, and the bullish sentiment surrounding the British Pound should gather pace throughout the second-half of 2014 as the Bank of England (BoE) looks to normalize monetary policy sooner rather than later.
With the economic docket expected to show a further pickup in U.K. outputs, the British Pound may catch a bid ahead of the BoE interest rate decision on July 10, but we may see the central bank refrain from releasing a policy statement once again as the Monetary Policy Committee (MPC) is widely expected to keep the benchmark interest rate at 0.50% while maintaining its asset-purchase target at GBP 375B. Nevertheless, it seems as though we may see a greater dissent at the July meeting as BoE Chief Economist Andrew Haldane sees the U.K. growing ‘3% plus,’ while Deputy Governor Jon Cunliffe continues to highlight the threat of rising home prices, and we may see a more material shift in the policy outlook as the economic recovery gathers pace.
At the same time, negative deposit rates in the Euro-Zone may further heighten the appeal of the sterling as we remain in a yield-seeking environment, and we will continue to look for a further decline in the EUR/GBP as well as the European Central Bank (ECB) pushes into uncharted territory. With that said, the GBP/USD may make a more meaningful run at the psychologically important 1.7200 handle should we see another batch of positive developments coming out of the U.K., and we will retain our approach of looking for opportunities to ‘buy dips’ in the British Pound amid the growing deviation in the policy outlook.
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1 Attachment(s)
AUD Faces Bumpy Week On Local Data and Waning Carry Appeal
AUD Faces Bumpy Week On Local Data and Waning Carry Appeal
Fundamental Forecast for Australian Dollar: Neutral
Attachment 8385
Wild Week For The Aussie
After hitting a fresh 2014 high during Tuesday’s session and briefly probing above the 95 US cent handle, the Australian Dollar ended the week as the worst performer against its US counterpart. While a dismal set of trade balance figures took the wind out of the currency’s sails, the real blows came from a fresh round of AUD jawboning by RBA Governor Glenn Stevens and a bumper set of US Non-Farm Payrolls data. The sharp decline on Thursdays was the largest pip value fall for the AUD/USD this year.
Australian Data Unlikely To Shift RBA Policy Expectations
June employment figures headline the docket for local data over the week ahead with economists tipping a tick higher in the unemployment rate to 5.9 percent. An upside surprise to the jobs added figure or unanticipated decline in the headline unemployment rate could yield a spike higher for the Aussie. However, follow-through may prove limited, given the Reserve Bank of Australia is unlikely to shift their policy preference until more consistent signs of progress in the labor market are witnessed.
Local Consumer and Business Confidence figures as well as Housing Finance data round out the noteworthy economic data on tap for the week. While consumer sentiment has sagged over the first half of the year, business confidence has shown some surprising resilience. On balance the leading indicators paint a patchy picture of the health of the Australian economy, which reinforce the notion that the cash rate is set to remain on hold over the near-term.
Low Vol. Environment Offers Aussie A Source of Support
One of the important themes that continues to offer the high-yielding currencies their bearings is the persistent low volatility environment, which has raised the appeal of the carry trade. Implied volatility in the FX market (measured by CVIX) hit a fresh low this week, suggesting traders are pricing in a low probability of a major economic disruption occurring in the near-term, which may continue to lure traders to the Aussie.
https://media.dailyfx.com/illustrati...dy_Chart_2.png
However, as investors have continued to pile into the long Aussie trade over the past several months, the currency’s yield advantage over its US counterpart has weakened considerably. The Australian 10 year bond spread narrowed to its lowest since October 2006 on Friday (see chart below). This makes the carry trade a relatively less attractive proposition, which may in turn reduce investor’s appetite for the Aussie.
https://media.dailyfx.com/illustrati...dy_Chart_1.png
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1 Attachment(s)
Nikkei forecast for the week of July 7, 2014, Technical Analysis
Nikkei forecast for the week of July 7, 2014, Technical Analysis
The Nikkei initially fell during the course of the week, but found enough support down nearly ¥10,000 level to turn things back around. A break above the ¥10,250 level would be more than enough to start buying now, and we think that ultimately this market will go higher. However, it’s going to be a choppy matter between here and the recent highs, so anybody who is looking to take a long position in the marketplace have to be fairly confident and be able to put up with the volatility that should be coming.
http://youtu.be/7ZLsxGcoB7Y
Attachment 8389
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DAX forecast for the week of July 7, 2014, Technical Analysis
DAX forecast for the week of July 7, 2014, Technical Analysis
The DAX as you can see had a positive week over the last five sessions, but remains just below the recent highs. We did in fact close above the €10,000 level though, so we believe that the momentum is certainly with the buyers at this point in time. On a break of the recent highs from a couple of weeks ago, we believe that this market and then in fact runs to the €12,000 level first. After that, we believe that the market will go much higher. Pullbacks should be looked at as buying opportunities.
http://youtu.be/mCd9qX9Glso
Attachment 8392
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NASDAQ forecast week of July 7, 2014, Technical Analysis
NASDAQ forecast week of July 7, 2014, Technical Analysis
The NASDAQ was closed on Friday, but spent the rest of the week shooting straight up from the 4400 level. We did not break above the 4500 level however, so that has to be addressed. Nonetheless, we do believe that it will ultimately get broken to the upside, but recognize that we need to see at least a daily close above that level. With this, we feel that the market cannot be sold, but anytime that it pulls back should be considered to be value, and looked at as a buying opportunity.
http://youtu.be/k-RiVrcBXdI
Attachment 8393
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S&P 500 forecast for the week of July 7, 2014, Technical Analysis
S&P 500 forecast for the week of July 7, 2014, Technical Analysis
The S&P 500 rose during the course of the week, even though we only had four sessions to work with. We close at the very high as of the week, and we believe that this market is in fact going to continue to go higher. However, we recognize that the 2000 level is just a bit above year, and could in fact be resistance based upon the large round number. However, we certainly see no reason to sell this market, so we are buying supportive candles, or a close above the 2000 handle which would signal that the next leg higher is about to begin.
http://youtu.be/NnLkBQrIAF0
Attachment 8397
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Dow Jones 30 forecast for the week of July 7, 2014
Dow Jones 30 forecast for the week of July 7, 2014
The Dow Jones 30 had a strong showing during the holiday shortened week, as Friday was Independence Day in the United States. That being the case, looking at the market we can see that there was certainly enough pressure from the buyers to make a case that we are heading into another leg up. The fact that we cleared the 17,000 level courses very bullish, and we believe that the market is going to try to reach the 20,000 level over the longer term. We are buyers on dips, and quite frankly we just be buying here as well.
http://youtu.be/dduVVF15eio
Attachment 8398
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US Dollar Index forecast for the week of July 7, 2014, Technical Analysis
US Dollar Index forecast for the week of July 7, 2014, Technical Analysis
The US Dollar Index fell during the first part of the week, but as you can see found enough support below the 80 handle to turn things back around and form a nice-looking hammer. This hammer of course suggests that the market is going to go higher, and we do believe that a break above the top of the hammer is a decent enough buying opportunity. We think that the market goes to the 81.50 level first, and then possibly as high as 84 given enough time. 79 continues to be the “floor” in this market.
http://youtu.be/SCTRJfzjFaU
Attachment 8399
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Silver forecast for the week of July 7, 2014, Technical Analysis
Silver forecast for the week of July 7, 2014, Technical Analysis
Silver markets went back and forth during the course of the week, ultimately settling very little by the time we closed. However, we are above the $21 level and that of course is a positive sign. We believe that you can only be long of silver right now, and shorting is nothing short of reckless. With the impulsive move that we’ve seen recently, we think it’s only a matter of time before we break out above the $22 handle, and that should signal a run it towards the $25 level.
http://youtu.be/wxGpJ7lxs_A
Attachment 8400
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1 Attachment(s)
Natural Gas forecast for the week of July 7, 2014, Technical Analysis
Natural Gas forecast for the week of July 7, 2014, Technical Analysis
The natural gas markets tried to rally during the course of the week, but found the $4.50 level to be resistive enough to turn the market back around. The market has formed a shooting star for the week of course, and we also have to point out that we have been rather consolidated of lately, as the market has been stuck between the $4.85 level on the top, and the $4.30 level on the bottom. That is what makes this shooting star forming where he did interesting to us, the fact that we are sitting on top of a well-established support level.
One has to pay attention to the fact that it is the summertime in the northeastern part of the United States, an area that is one of the most eager consumers am natural gas, but mainly for heating purposes. True, some industrial uses continue to propel the market as the demand for power will continue with a stronger than anticipated jobs number out of America, but ultimately that is not enough to change the demand picture for the time being.
If we get a break below the $4.30 level, we believe that this market could find its way down to the four dollars level given enough time. There is a lot of noise between here and there though, so expect a bumpy ride regardless. On the other hand, if we break above the $4.50 level, or more specifically the top of the shooting star, that signals that enough buying has come back into the marketplace to probably send price back towards the $4.85 handle, the top of the consolidation.
With this in mind, we need to see at least a daily close below the $4.30 before we start selling, and at that point in time we would also recognize that the market will more than likely move and its own accord, and we will have to be very patient with that move lower. We do think however, that a move above the $4.50 level in towards the top of consolidation would probably be the quicker of the two possibilities.
http://youtu.be/zez02zagJjQ
Attachment 8401
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Gold forecast for the week of July 7, 2014, Technical Analysis
Gold forecast for the week of July 7, 2014, Technical Analysis
The gold markets did very little during the course of the week, which really wouldn’t be a big surprise simply because of the Independence Day holiday in America. Half of New York was away at holiday to begin with, and then of course liquidity falls from that already low point during the course of the week. That being the case, we feel that this market still need to get above the $1350 level in order to be one that can be bought with confidence, but we are also bullish longer-term. With that, we look at pullbacks as potential buying opportunities.
http://youtu.be/wOzqlsra8dg
Attachment 8402
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USD/JPY forecast for the week of July 7, 2014, Technical Analysis
USD/JPY forecast for the week of July 7, 2014, Technical Analysis
The USD/JPY pair rose during the course of the week, showing that the support still holds at the bottom of this consolidation area. However, the market is still start between the 101 and the 103 levels, so it’s difficult to place any longer-term trades. On a break above the 103 level, at that point in time we think that the market could go to the 105 level. However, until that happens we don’t really see much in the way of it trade as the area below 101 looks so supportive.
http://youtu.be/msH9jYfgU5o
Attachment 8403
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USD/CAD forecast for the week of July 7, 2014, Technical Analysis
USD/CAD forecast for the week of July 7, 2014, Technical Analysis
The USD/CAD pair went back and forth during the course of the week, showing the uptrend line that we have been following for some time now to remain supportive. With this, we believe that this market will continue to find buyers just below, and the 1.06 level has in fact been an area where buyers continue to step in. We believe that a break above the top of the range for the week should be reason for the market to continue going higher. We think that the 1.08 level will in fact they’ll offer a significant amount resistance, but ultimately this market should continue to climb higher than that once we break out to the upside.
A move above the 1.08 level we think sends this market looking for the 1.10 handle, and then the 1.12 level which had been resistive enough to send the market down to where we have seen it lately. The market should continue to have some influence from the oil markets, but remember that the Americans are producing more of their own petroleum these days, so it won’t have asked drastic have an effect as we used to see. We believe that this market continues to be choppy as it typically is, but ultimately we should see an impulsive move in one direction or the other.
If history has anything to say about it, we will certainly see a move and it will be drastic. This pair tends to move suddenly, with great expanses of sideways action over the longer term. We are positive of this market as long as we can stay above the aforementioned uptrend line, but do recognize that we need to see the buyers step in in order to feel comfortable being long at all. On the other hand though, if we do close below the 1.06 level, we would expect a little bit of a pickup as far as support is concerned at the 1.05 handle, but we feel that the level should give way to the sellers and we will more than likely go to the parity level after that.
http://youtu.be/C98a-csYAx4
Attachment 8404
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NZD/USD forecast for the week of July 7, 2014, Technical Analysis
NZD/USD forecast for the week of July 7, 2014, Technical Analysis
The NZD/USD pair had a slightly negative week over the last five sessions, that’s not to be very surprising in general, simply because this is the high that we had seen the pullback from. Nonetheless, we believe that this market doesn’t factor higher, and a move above the 0.88 level since this market looking for the 0.90 level given enough time. We believe that the 0.85 region is in fact the “floor” in this market at this moment in time, and therefore have no interest in selling the New Zealand dollar.
http://youtu.be/rUq4O4EwqLA
Attachment 8405
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1 Attachment(s)
GBP/USD forecast for the week of July 7, 2014, Technical Analysis
GBP/USD forecast for the week of July 7, 2014, Technical Analysis
The GBP/USD pair broke out during the course of the week, breaking above the top of the hammer from the previous week it was sitting on top of the 1.70 level. Because of this, we really like this market for long positions at this point in time, and believe that ultimately we should continue to go much higher. In fact, we believe that this market goes to the 1.75 level given enough time, and that pullbacks going forward should continue to offer “value” as the British pound continues to strengthen based upon the fact that the British economy seems to be coming out of recession. This has the British pound looking strong against both currencies anyway, but this is the bellwether if you will, of Howell the British pounds going to do overall. So it really doesn’t matter which British pound-based pair you are trading, you need to pay attention to this particular market.
On the other side of the Atlantic, the Federal Reserve is starting to see signs of the US economy waking up, and that of course is good for “riskier” assets. The British pound is often thought of as such, although we see that as a bit of a farce. Nonetheless, we know that correlation is that good economic news in general tends to push this pair higher, so why fight it?
We believe that this market will probably go higher than the 1.75 level given enough time, because quite frankly the 1.70 area is more significant on the longer-term chart. However, we recognize that area does in fact have some significance, so more than likely we have just entered a “buy and hold” type of move but recognize that there will be challenges above. Markets do not move in one direction forever, but this is in fact one that should continue to be very positive for a very long time in our opinion. If you are not trading this particular pair, again, pay attention to this market simply to see whether or not you can buy the British pound against other currencies.
http://youtu.be/oObBOuQ_LzU
Attachment 8406
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1 Attachment(s)
EUR/USD forecast for the week of July 7, 2014, Technical Analysis
EUR/USD forecast for the week of July 7, 2014, Technical Analysis
The EUR/USD pair tried to rally during the course of the week, but as you can see failed at the 1.37 handle. The resulting candle is a shooting star, but it’s hardly a decent sell signal, as there is significant support down at the 1.35 handle. With this, we believe that ultimately this market continues to chop around sideways, and therefore we have no interest in a longer-term trade at this point in time as the market has essentially been taken over by the scalpers. It is not until we break out of this area that we feel comfortable with a longer-term position.
http://youtu.be/JSsnGqC3RaQ
Attachment 8407
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Forex - Weekly outlook: July 7 - 11
Forex - Weekly outlook: July 7 - 11
The dollar ended the week higher against a basket of major currencies on Friday, one day after a stronger-than-expected U.S. jobs report for June revived speculation over when the Federal Reserve may start to raise interest rates.
The Labor Department reported that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000. The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 80.31 late Friday, recovering from the two-month lows of 79.84 reached earlier in the week.
USD/JPY settled at 102.05, off Thursday’s high of 102.25, but still 0.62% higher for the week. EUR/USD ended Friday’s session at 1.3594, down 0.35% for the week.
The euro came under pressure after the European Central Bank reiterated that it could use "unconventional measures" to combat persistently low levels of inflation in the euro area.
The ECB left all rates on hold on Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
The single currency was also lower against the yen on Friday, with EUR/JPY down 0.24% to 138.74, off Thursday’s one-month highs of 139.26.
The pound stayed close to six-year highs against the dollar, with GBP/USD at 1.7159 late Friday, as expectations that the Bank of England will raise rates before the end of the year continued to underpin demand for sterling.
Elsewhere, the Australian dollar pushed higher against the greenback on Friday after falling to its lowest level in more than two weeks on Thursday. AUD/USD was at 0.9364 late Friday, paring the week’s losses to 0.52%.
The Aussie fell sharply on Thursday after Reserve Bank Governor Glenn Stevens said the currency was overvalued and added that the central bank had “ammunition” to push interest rates even lower if necessary.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar. Meanwhile, Australia and Canada are to publish their latest jobs reports and the Bank of England is to hold its monthly rate setting meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, July 7
- 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 publish data on building starts and the Ivey PMI.
Tuesday, July 8
- Both Australia and New Zealand are to publish private sector data on business confidence, while Japan is to release a report on the current account.
- In the euro zone, Germany is to publish data on the trade balance, the difference in value between imports and exports.
- Switzerland is to produce reports on consumer price inflation and retail sales.
- Elsewhere in Europe, the U.K. is to release data on manufacturing and industrial production.
Wednesday, July 9
- Australia is to produce a report on consumer sentiment.
- China is to release official data on consumer and producer price inflation.
- Canada is to publish data on housing starts.
- Later Wednesday, the Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- New Zealand is to release private sector data on manufacturing activity.
- Japan is to publish core machinery orders and tertiary industry activity.
- Australia is to release data on the change in the number of people employed and the unemployment rate, and a private sector report on inflation expectations.
- In the euro zone, France is to publish a report on industrial production, while the ECB is to publish its monthly bulletin.
- The U.K. is to release data on the trade balance, while the Bank of England is also to announce its benchmark interest rate, following its monthly rate review.
- Later Thursday, the U.S. is to release the weekly government report on initial jobless claims.
Friday, July 11
- Australia is to publish data on home loans.
- Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.
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Forex - USD/JPY weekly outlook: July 7 - 11
Forex - USD/JPY weekly outlook: July 7 - 11
The dollar edged lower against the yen amid profit taking on Friday, but still ended the week higher as a better-than-expected U.S. nonfarm payrolls report for June bolstered the outlook for the wider economic recovery.
USD/JPY was at 102.05 late Friday, off Thursday’s high of 102.25, but still 0.62% higher for the week.
The pair was likely to find support at 101.75, Thursday’s low and resistance at 102.25.
The Labor Department reported that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000. The previous month’s figure was revisedup to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
The upbeat data revived speculation over when the Federal Reserve may start to raise interest rates.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 80.31 late Friday, recovering from the two-month lows of 79.84 reached earlier in the week.
Elsewhere Friday, the euro slipped lower against the yen, with EUR/JPY down 0.24% to 138.74, off Thursday’s one-month highs of 139.26.
The euro came under pressure after the European Central Bank reiterated that it could use "unconventional measures" to combat persistently low levels of inflation in the euro area.
The ECB left all rates on hold on Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major economic reports on the calendar.
Ahead of the coming week, Investing.com has compiled a list of this and other significant events likely to affect the markets. The guide skips Monday and Friday as there are no relevant events on these days.
Tuesday, July 8
- Japan is to release a report on the current account.
Wednesday, July 9
- The Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- Japan is to publish core machinery orders and tertiary industry activity.
- The U.S. is to release the weekly government report on initial jobless claims.
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USD/CHF weekly outlook: July 7 - 11
USD/CHF weekly outlook: July 7 - 11
The dollar rose to more than one-week highs against the Swiss franc on Friday a day after a robust U.S. nonfarm payrolls report for June sparked speculation that the Federal Reserve could bring forward its timetable for raising interest rates.
USD/CHF was at 0.8945 late Friday, up from 0.8885 on Thursday and ended the week with gains of 0.38%.
The pair was likely to find support at 0.8920 and resistance at 0.9000.
The greenback was boosted after the Labor Department reported that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000.
The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
The upbeat data revived speculation over when the Federal Reserve may start to raise interest rates.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 80.31 late Friday, recovering from the two-month lows of 79.84 reached earlier in the week.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, while Switzerland is to release reports on inflation and retail sales. The Swiss central bank is also to publish its monthly report on 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, July 7
- 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.
Tuesday, July 8
- Switzerland is to produce reports on consumer price inflation and retail sales.
Wednesday, July 9
- The Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- The U.S. is to release the weekly government report on initial jobless claims.
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USD/CAD weekly outlook: July 7 - 11
USD/CAD weekly outlook: July 7 - 11
The U.S. dollar moved higher against the Canadian dollar in holiday thinned trade on Friday, as markets in the U.S. remained closed for the Independence Day holiday.
USD/CAD ended Friday’s session at 1.0651, pulling back from the six month lows of 1.0619 hit in the previous session. For the week, the pair slipped 0.13%.
The pair is likely to find support at 1.0619 and resistance at 1.0680.
The greenback touched its 2014 lows against the loonie on Thursday after the Labor Department reported that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000.
The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
The upbeat data sparked speculation that the Federal Reserve could bring forward its timetable for raising interest rates.
The Canadian dollar continued to remain supported after recent stronger than expected inflation data for May fuelled expectations that the Bank of Canada could shift away from its neutral stance on interest rates. The loonie received an additional boost from rising oil prices in May, amid concerns over the ongoing insurgency in Iraq.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, while Canada’s latest jobs report 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. The guide skips Tuesday as there are no relevant events on this day.
Monday, July 7
- Canada is to publish data on building starts and the Ivey PMI.
Wednesday, July 9
- Canada is to publish data on housing starts.
- Later Wednesday, the Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- The U.S. is to release the weekly government report on initial jobless claims.
Friday, July 11
- Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.
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AUD/USD weekly outlook: July 7 - 11
AUD/USD weekly outlook: July 7 - 11
The Australian dollar ended the week at a more than two-week low against its U.S. counterpart on Friday, after a robust U.S. nonfarm payrolls report for June sparked speculation that the Federal Reserve could bring forward its timetable for raising interest rates.
AUD/USD hit 0.9327 on Thursday, the pair’s lowest since June 18, before subsequently consolidating at 0.9365 by close of trade on Friday, up 0.2% for the day but 0.61% lower for the week.
The pair is likely to find support at 0.9327, the low from July 3 and resistance at 0.9439, the high from July 3.
The U.S. dollar rallied across the board on Thursday after the U.S. Department of Labor said non-farm payrolls rose by a seasonally adjusted 288,000 in June, easily surpassing expectations for an increase of 212,000.
The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
The upbeat jobs report bolstered the outlook for the broader economic recovery and revived speculation over when the Fed may start to raise interest rates.
Meanwhile, the Aussie came under additional pressure after Reserve Bank Governor Glenn Stevens said Thursday that the currency was overvalued and added that the central bank had “ammunition” to push interest rates even lower if necessary.
The RBA left its benchmark interest rate unchanged at a record low 2.5% in a widely expected decision earlier in the week.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar. Meanwhile, Australia is to publish its latest jobs report.
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.
Tuesday, July 8
- Australia is to publish private sector data on business confidence.
Wednesday, July 9
- Australia is to produce a report on consumer sentiment.
- Later Wednesday, the Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- Australia is to release data on the change in the number of people employed and the unemployment rate, and a private sector report on inflation expectations.
- Later Thursday, the U.S. is to release the weekly government report on initial jobless claims.
Friday, July 11
- Australia is to publish data on home loans.
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NZD/USD weekly outlook: July 7 - 11
NZD/USD weekly outlook: July 7 - 11
The New Zealand dollar ended Friday’s session close to a one-week low against its U.S. counterpart, as a better-than-expected U.S. nonfarm payrolls report for June bolstered the outlook for the wider economic recovery.
NZD/USD hit 0.8716 on Thursday, the pair’s lowest since June 25, before subsequently consolidating at 0.8740 by close of trade on Friday, down 0.17% for the day and 0.43% lower for the week.
The pair is likely to find support at 0.8716, the low from July 3 and resistance at 0.8776, the high from July 3.
The U.S. dollar was boosted on Thursday after the U.S. Department of Labor said non-farm payrolls rose by a seasonally adjusted 288,000 in June, easily surpassing expectations for an increase of 212,000.
The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
The upbeat jobs report bolstered the outlook for the broader economic recovery and revived speculation over when the Fed may start to raise interest rates.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar.
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 Monday and Friday as there are no relevant events on these days.
Tuesday, July 8
- New Zealand is to publish private sector data on business confidence.
Wednesday, July 9
- The Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- New Zealand is to release private sector data on manufacturing activity.
- Later Thursday, the U.S. is to release the weekly government report on initial jobless claims.
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USD/GBP weekly outlook: July 7 - 11
USD/GBP weekly outlook: July 7 - 11
The pound was close to its highest in almost six-years against the dollar on Friday, as expectations for a rate hike by the Bank of England this year continued to underpin demand for sterling.
GBP/USD was at 1.7158 late Friday, after touching highs of 1.7178 earlier, the most since October 2008.
Cable is likely to find support at 1.7125 and resistance at 1.8000.
Sterling has strengthened broadly since the start of this year, gaining more than 15% against the dollar amid expectations that the deepening U.K. recovery will prompt the BoE to raise rates before the end of the year.
Data on Thursday showed that activity in the U.K. service sector slowed slightly in June, but growth remained robust with new business growth and payrolls increasing.
The Markit U.K. services purchasing managers’ index slowed to 57.7 in June from 58.6 in May. It was the lowest reading in three months, but remained well above the 50 level separating growth from contraction.
In the U.S., a robust nonfarm payrolls report for June sparked speculation that the Federal Reserve could bring forward its timetable for raising interest rates.
The Labor Department reported Thursday that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000.
The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
Elsewhere Friday, the pound rose to almost two-year highs against the euro, with EUR/GBP down 0.14% to 0.7921, the weakest since September 2012.
The euro came under pressure after the European Central Bank reiterated that it could use "unconventional measures" to combat persistently low levels of inflation in the euro area.
The ECB left all rates on hold on Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar. Meanwhile, the BoE is to hold its monthly rate setting meeting.
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 Monday and Friday, as there are no relevant events on these days.
Tuesday, July 8
- The U.K. is to release data on manufacturing and industrial production.
Wednesday, July 9
- The Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- The U.K. is to release data on the trade balance, while the BoE is to announce its benchmark interest rate.
- Later Thursday, the U.S. is to release the weekly government report on initial jobless claims.
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EUR/USD weekly outlook: July 7 - 11
EUR/USD weekly outlook: July 7 - 11
The euro fell to more than one-week lows against the dollar on Friday, one day after a robust U.S. employment report for June eased concerns over the outlook for the economic recovery.
EUR/USD ended Friday’s session at 1.3594, down 0.35% for the week.
The pair is likely to find support at 1.3550 and resistance at 1.3600.
The Labor Department reported Thursday that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000. The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of Friday’s Independence Day holiday.
The upbeat data revived expectations that the Federal Reserve could bring forward its timetable for raising interest rates.
The euro came under pressure after the European Central Bank repeated its forward guidance that rates will remain on hold at present or lower levels for an extended period.
The ECB also reiterated that it could use "unconventional measures" to combat persistently low levels of inflation in the euro area.
The ECB left all rates on hold on Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
The single currency was lower against the yen on Friday, with EUR/JPY down 0.24% to 138.74, off Thursday’s one-month highs of 139.26.
The euro fell to almost two-year lows against the stronger pound on Friday, with EUR/GBP down 0.14% to 0.7921, the weakest since September 2012.
Demand for sterling continued to be underpinned by expectations that the deepening economic recovery in the U.K. will prompt the Bank of England to raise interest rates before the end of this year.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major economic reports on the calendar.
Ahead of the coming week, Investing.com has compiled a list of this and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
Tuesday, July 8
- In the euro zone, Germany is to publish data on the trade balance, the difference in value between imports and exports.
Wednesday, July 9
- The Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
- France is to publish reports on consumer prices and industrial production, while the ECB is to publish its monthly bulletin.
- Later Thursday, the U.S. is to release the weekly government report on initial jobless claims.
Friday, July 11
- Spain is to publish revised data on consumer inflation.
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