The momentum in the EUR/USD is starting to gain steam. Unfortunately, for Euro bulls it is clearly to the downside. During the week we saw a slightly dovish FOMC and a mixed US employment report, however, the EUR/USD continued to fall. That is suggesting the USD buying is strong and we might very well have more on the way this week. Read More on eurusd.co
This is a live streaming of the ECB press conference that will take place immediately after the meeting of the Governing Council of the European Central Bank on 7 September 2017. The press conference will start at 14:30 CET.
The Euro has lost momentum over the past two weeks, though the fundamentals driving its rally remain in place. Last week the Eurozone news flow didn’t do enough to keep the rally going, and the UK election result weighed on currencies across the Eurozone.
The main event this week is the FOMC rate decision and traders will analyse Janet Yellen’s language concerning the future carefully. If the market interprets her comments as even slightly bullish for the USD we are likely to see a retracement to the 1.08 to 1.10 range. If not, the Euro rally may resume at a modest pace.
(EUR/USD 4-Hour Chart – Resistance at 1.1284)
Want to know more? go to http://www.eurusd.co/analysis/the-euro-has-lost-momentum-12-june-2017.html
The Euro-Dollar pair is consolidating ahead of US employment data later in the week. The rhetoric from the Fed and the data over the last few months has some participants believing the FED may not hike rates in June. If this is confirmed by the data, the Euro may extend its gains, while strong data may see a bigger correction as the USD rallies. If the data is difficult to interpret, the indecision will increase and so will volatility.
The underlying trend is still bullish for the Euro, it’s just the size of the corrections that are uncertain.
(EUR/USD Weekly Chart – A pause after a strong move)
In the short term, a break of either side of last week’s trading range is likely to lead to a modest move in the direction of the break.
(EUR/USD 4-Hour Chart – a tight range which could break in either direction)
For the complete analysis and strategy click here http://www.eurusd.co/analysis/consolidating-ahead-of-key-us-data-29-may-2017.html
A combination of Euro strength and Dollar weakness has created a very strong trend for the Euro. This is now prompting dollar bulls to get out of their positions, which adds to the trend.
Before we have a clear idea of where the Euro is headed in the long term we will have to see a test if 1.16, and so price action in the short term will be targeting that level.
(EUR/USD Weekly chart – The Euro needs to test the top of the range)
Right now, the best strategy is to buy dips with a target of 1.1374, but we may have to wait for a bigger correction to 1.0875 to set up a really profitable, high probability trade.
(EUR/USD 4-Hour Chart – A clear medium term target at 1.1374)
There are a lot of speculative Euro longs in the market, and plenty of leverage is being used. That means a correction may be severe, so traders must obey their stops in this environment.
For the complete analysis and strategy click here http://www.eurusd.co/analysis/dollar-bulls-are-liquidating-22-may-2017.html
China’s central bank rocked global markets this week as it initiated devaluation of the Yuan, saying it would begin setting the daily rate based in part on the prior day’s trading. In a press conference on Thursday, PBOC discussed its recent policy moves and Deputy Governor Yi Gang said “adjustment is almost complete”. He further said the possibility of a 10 percent devaluation was “nonsense”, amidst rumors of some government figures pushing for a bigger depreciation. The PBOC started Yuan devaluation on Tuesday by 1.9 percent, 1.6 percent on Wednesday, and finally 1.1 percent on Thursday. Despite the devaluation, PBOC also intervened to manage currency volatility, keeping the market in check.
China’s New Loans surged to CNY1.480 billion in July. This is more than double the median estimate and the third straight monthly increase. M2 Money Supply grew 13.3 percent. Industrial Production and Retail Sales came in at 6 percent and 10.5 percent, respectively.
Japan’s Core Machinery Orders fell 7.9 percent in June, its lowest reading since May 2014.
German ZEW Economic Sentiment slipped to 25.0 from July’s 29.7. This is its fifth consecutive monthly decline. In contrast, the Eurozone German ZEW Economic Sentiment improved to 47.6.
In Greece, the parliament on Friday voted in favor of implementing the measures for the third bailout program. 222 Greek MPs voted Yes and 64 voted No, with a growing number of SYRIZA lawmakers opposing the deal, the third bailout in the last five years. Euro finance ministers will approve lending 85.5 billion Euros in the next three years to Greece for stability support.
Gold recovered this week as it traded within a $37 trading range and pushed through $1,100. An initial bounce toward $1,150 remains possible amidst a bearish backdrop while price is below $1,250.
Oil completed its ninth straight weekly bearish close this week as more sellers joined. The $40 level is now on target, and a move toward the $30-$35 zone is now an increased possibility. Traders should avoid buying any dip.
EURUSD recovered this week further after price failed to make a new weekly low. The pair was able to move past 1.1200 but topside selling made it close the week much lower. The goal of buyers for the next few weeks is to sustain momentum and target 1.1400 again.
GBPUSD came close to taking out previous week’s low, but in the end it just formed a bullish weekly inside bar. This was a positive result, which could pave the way for a breakout toward 1.5900 in the coming week or so. This is a big possibility unless support around 1.5400 will be cleared.
The 125 level in USDJPY has been reached but the last three weekly closes has been far from ideal. Most moves towards that level has been thwarted by sellers easily, and this could become a bigger concern for bulls starting this coming week. Sellers could aim for a break of 124 this week.
The Week Ahead
This week will be less active, overall, compared to previous weeks. However, activity would be more evenly distributed.
Monday will offer Japan’s Prelim GDP; Switzerland’s Retail Sales; Canada’s Foreign Securities Purchases; US Empire State Manufacturing Index;
Tuesday will have RBA’s Monetary Policy Meeting Minutes; UK CPI, RPI, PPI Output and HPI; US Building Permits and Housing Starts.
Wednesday will be unusually compact with New Zealand’s PPI Input and PPI Output; Japan’s Trade Balance; US CPI and FOMC Meeting Minutes.
Thursday will have Bank of Japan’s Monetary Policy Statement and press conference; Switzerland’s Trade Balance; UK Retail Sales; Canada’s Wholesale Sales; US Jobless Claims, Existing Home Sales, and Philly Fed Manufacturing Index.
Friday will remain active with China’s Caixin Flash Manufacturing PMI; Flash Manufacturing PMI and Flash Services PMI from France, Germany, and the Eurozone; UK Public Sector Net Borrowing; Canada’s CPI and Retail Sales; and US Flash Manufacturing PMI.
On Tuesday, the Reserve Bank of Australia left the Cash Rate unchanged at 2 percent. Meanwhile, the Bank of England kept its Official Bank Rate at 0.50 percent. The latest Official Bank Rate votes surprisingly showed only one policymaker out of nine, Ian McCafferty, saw the need to raise rates. Analysts expected two BOE MPC members would want to hike rates. The Asset Purchase Facility (APF) and APF votes came in line with expectations (GBP375 billion and 0-0-9, respectively). BOE Governor Carney hinted that the first rate hike could happen next year but would be “data dependent”.
On the global employment front, New Zealand’s Employment Change fared lower than forecast at 0.3 percent, while the Unemployment Rate came in at 5.9 percent, as expected. On the other hand, Australia’s Employment Change was much stronger as employers added 38,500 jobs in July, but the Jobless Rate slipped to 6.3 percent from 6.1 percent. In the United States, Non-Farm Employment Change was 7,000 below the 222,000 forecast, while the previous reading has been revised higher to 231,000. US Jobless Rate remained fixed at 5.3 percent for the second month in July, according to the latest Bureau of Labor Statistics data. Canada’s Jobless Rate stayed at 6.8 percent for the sixth straight month.
In other news, Australia’s Retail Sales and Trade Balance came in better than forecast. Home Loans were lower at 4.4 percent, while previous reading was revised lower to -7.3 percent.
In the United States, ISM Manufacturing PMI and ISM Manufacturing Prices slipped to 52.7 and 44.0, respectively. However, ISM Non-Manufacturing PMI jumped to 60.3, its best reading since 2005.
Gold posted its second weekly inside bar after price hovered just below the $1,100 area. We could then see a bounce toward $1,150-$1,200 initially. However, downtrend remains firm as long as price stays below $1,250.
Oil tracked lower again this week, printing its eighth straight weekly bearish close. The triple bottom is now fully in play, and we could see fireworks in the coming days or weeks. Price is looking for new lows – new multi-year lows, in fact. It is now staring at a possibility of price heading for the $30-$35 zone.
EURUSD has been sticking close to the 1.100 level for several weeks now. With the pair’s failure to create a new weekly low, we can see bulls attempt for a move toward 1.1400 again. This area is possibly rich in armies of sellers.
GBPUSD traders are battling within a tight range for the fifth week now. If this pair wants to track higher, it should take out the 1.5700 this week so it can head to 1.5900. Otherwise, GBPUSD would stay in a range, which could trade as low as 1.5400.
Slowly but surely, USDJPY has been moving higher toward 125 for the past couple of weeks. The pair remains content, for now, in staying below 125 (although this figure has been touched twice this week). If it continues to march higher, the June 5 high below 126 is the next target.
The Week Ahead
Monday will offer Japan’s Current Account, Consumer Confidence, and BOJ Monthly Report; and speeches from US FOMC Member Lockhart and Fischer.
Tuesday will start quite early with UK’s BRC Retail Sales Monitor. This will be followed by Australia’s NAB Business Confidence and HPI; China’s New Loans; Germany and Eurozone ZEW Economic Sentiment; Canada’s Housing Starts; and US Prelim Unit Labor Costs and Prelim Nonfarm Productivity.
Wednesday will get busy with Japan’s BOJ Monetary Policy Meeting Minute; Australia’s Wage Price Index and Westpac Consumer Sentiment; China’s Industrial Production, Retail Sales, and Fixed Asset Investment; UK Average Earnings Index, Jobless Rate, and Claimant Count Change; and JOLTS Job Openings
Thursday will be critical again for Greece as its set for another Debt Crisis Vote. Other important news to watch out for include New Zealand’s Business NZ Manufacturing Index and FPI; Japan’s Core Machinery Orders; Australia’s MI Inflation Expectations; France’s CPI; ECB Monetary Policy Meeting Accounts; US Jobless Claims, Retail Sales, Business Inventories and Import Prices.
Friday will have moderate news activity with New Zealand’s Retail Sales; Germany’s Prelim GDP; Eurozone Flash GDP; Eurogroup Meetings; Canada’s Manufacturing Sales; US PPI, TIC Long-Term Purchases, Empire State Manufacturing Index, Industrial Production, Capacity Utilization Rate, and Prelim UoM Consumer Sentiment.
The Greek government approved on Thursday some reform-related demands of creditors in order to stay in the Eurozone. The televised voting showed 151 lawmakers supported Prime Minister Alexis Tsipras in passing the second tranche of policy measures. Meanwhile, in his speech in Frankfurt on the same day as the Greek vote, Bundesbank President Weidmann commented that the ESM is only able to provide credit to solvent states.
In the United Kingdom, the MPC voted as expected (no change) in relation to the Official Bank Rate and Asset Purchase Facility. On the other hand, the RBNZ reduced its Official Cash Rate to 3 percent from 3.25 percent as expected on Thursday. The central bank chief expects the New Zealand Dollar to depreciate further amidst weakness in commodity prices. Governor Wheeler further noted that further easing in rates is “likely”.
In other news, Canada’s Wholesale Sales dipped 1 percent in May, while previous reading revised down to 1.7 percent. Retail Sales, both the main and core readings, were higher than anticipated.
New Zealand Trade Balance posted a NZD60 million deficit in June, in contrast to a NZD100 million surplus expected. The previous reading was revised higher to NZD370 million.
US Existing Home Sales came in slightly higher than forecast at 5.49 million in June, but May‘s reading was revised down to 5.32 million from 5.35 million. New Home Sales only gained 482,000 in June compared to 543,000 expected. May’s reading was similar with April’s at 517,000.
Jobless Claims for the previous week came in at 255,000 compared to the 279,000 forecast.
Gold created a $57 range this week as it posted its fifth straight weekly downside track and reaching its lowest price in over five years. The next critical support now comes at $1000.
Oil went on post its sixth weekly decline and it broke the $50 level with confidence. The chance for a move to create a triple bottom has therefore increased and we could expect that this coming week. Sellers will now target the $40 to $44 area.
EURUSD managed to post some gains this week after pulling close to the 1.0800 level again. Buyers still need to prove their might by forcing through the 1.1450 resistance area. That area is critical if bulls want to revisit the 1.2000s again.
GBPUSD posted an inside bar this week as the 1.5500 level continues to attract buyers and sellers on both sides. Buyers have a slight upper hand here as long as they can maintain a good support around 1.5500. Next target area is 1.5900.
USDJPY posted below-average weekly activity this week after making a strong showing in the past two weeks. Sellers entered the fray around the 124 level, keeping a lid on growing confidence of the buyers. The June 5 high below 126 is the next target.
The Week Ahead
The overall news activity for this week would be lower than average as July draws to a close.
Monday will showcase Germany’s Ifo Business Climate; Eurozone M3 Money Supply; and US Durable Goods Orders.
Tuesday will remain quiet with UK’s Prelim GDP; Canada’s RMPI and IPPI; and US Consumer Confidence and Richmond Manufacturing Index.
Wednesday will have Japan’s Retail Sales; Germany’s GfK Consumer Climate; UK Net Lending to Individuals and Mortgage Approvals; US Pending Home Sales, and Fed Rate Announcement and Statement.
Thursday will offer more activity with Australia’s Building Approvals and Import Prices; Germany’s Prelim CPI and Unemployment Change; Spain’s Flash CPI and Flash GDP; US Unemployment Claims, Goods Trade Balance, Advance GDP, and Advance GDP Price Index.
Friday will end the week with Japan’s Household Spending, Tokyo Core CPI, and Jobless Rate; New Zealand’s ANZ Business Confidence; Australia’s PPI; Germany’s Retail Sales; France’s Consumer Spending; Eurozone CPI Flash Estimate and Jobless Rate; Canada’s GDP; US Employment Cost Index, Revised UoM Consumer Sentiment, and Chicago PMI.
Greece has just edged closer to Euro exit after a Greek referendum ended with “No” votes gaining the upper hand. The referendum centered on whether to accept or reject the creditors’ terms regarding the latest aid package. On Monday’s opening, the EURUSD gapped for a second straight Monday and therefore EURUSD could revisit the 2015 lows in the near future if bearishness persists in the market. In the mean time, lines between the Greek government and creditors are open and discussions are still ongoing.
In Japan, Retail Sales data was much better at 3 percent, while analysts expected a 2.1 percent gain. This is the second straight monthly gain. The Preliminary Industrial Production sagged 2.2 percent. Average Cash Earnings grew 0.6 percent, a tad below the 0.7 percent forecast.
Germany’s Retail Sales advanced 0.5 percent as median estimates for flat growth in May, and April’s reading was revised lower to 1.3 percent from the initial 1.7 percent. Unemployment Change showed a decline of 1,000 compared to an expected 5,000 decline.
Spain’s Unemployment Change also declined below forecast at 94,700.
In the United States, the Chicago PMI for June improved but at 49.4, it is below 50 and lower than anticipated. Non-Farm Employment Change was published one day earlier on Thursday due to US Independence Day celebrations. Employers added 223,000 jobs in June, which is lower than the forecast of 231,000. Bureau of Labor Statistics also announced a 5.3 percent Unemployment Rate, a better-than-expected improvement from May’s 5.5 percent. Meanwhile, Jobless Claims filed in the previous week was 11,000 higher than the 270,000 forecast. Factory Orders dipped one percent.
Gold continues its bearish path as it struggles to get through the $1,200 level. The vulnerability of the $1,100 increases and we could see that area will get attacked in the coming week.
Oil seems well protected around the $60 level, so sellers pounced and pressured Oil lower throughout the week. We could see a quick attack on the $50 level soon.
Monday’s gap in EURUSD set the stage for a bearish week. With the Greek referendum “No” result, we could see more volatility in the coming week. Avoid buying dips.
GBPUSD started the week with a gap and was significantly bearish the entire week. Sellers easily cut through 1.56 and therefore we could see more downside moves in the coming week.
USDJPY closed the week virtually unchanged, but we have seen the fourth lowest weekly high in the process, nevertheless. Any weakness would be more evident if the 121-122 area fails to hold.
The Week Ahead
Monday’s news will be sparsely scattered throughout the day, starting with Australia’s MI Inflation Gauge and ANZ Job Advertisements; then Germany’s Factory Orders; Switzerland’s CPI; Canada’s Ivey PMI and Bank of Canada’s Business Outlook Survey and US ISM Non-Manufacturing PMI.
Tuesday will be kicked off with New Zealand’s NZIER Business Confidence, followed RBA Rate Announcement and Statement; Switzerland’s Foreign Currency Reserves; UK’s Halifax HPI, Manufacturing Production and Industrial Production; Euro Summit; Canada and US Trade Balance; US JOLTS Job Openings.
Wednesday will be much shorter than usual with Japan’s Current Account; UK Annual Budget Release; Canada’s Building Permits; and US FOMC Meeting Minutes.
Thursday will have Japan’s Core Machinery Orders; Australia’s jobs data; China’s CPI and PPI; UK BOE Official Bank Rate, Asset Purchase Facility, and MPC Rate Statement; Canada’s NHPI; and US Jobless Claims.
Friday will wind down the week with Australia’s Home Loans; China’s New Loans; UK Trade Balance; Canada’s jobs data; and Fed Chair Yellen’s speech.
The debt issue on Greece remains a big question mark for the markets. Despite previous high-level discussions on the issue, several officials expressed uncertainty. IMF’s Lagarde had said, “there’s enormous work” that still needs to be done. Various Eurogroup meetings happened throughout the week, but ultimately no deal was reached between the Greek government and top officials involved. Banks in Greece are closed (small cash withdrawals allowed) and would stay so until July 6, or until officials take drastic steps to end the stalemate. The Greek government imposed the bank restrictions in order to “protect the financial system”. German Chancellor Angela Merkel expressed willingness for further talks with Greece’s Prime Minister Alexis Tsipras "if he actually wants to". The Greek PM has called for a referendum on July 5 to discuss the terms offered by the creditors, and request for a bailout extension.
All Flash Manufacturing PMI and Flash Services PMI from Germany, France, and the Eurozone came in better than forecast, unlike in the previous instances.
Germany’s Ifo Business Climate fell to its lowest in the last four months to 107.4 as the Greek risk weighs down on business confidence.
In the United States, the National Association of Realtors reported that Existing Home Sales came in slightly better at 5.35 million May, its best level since November 2009. Unemployment Claims was spot on at 271,000. Personal Spending for May edged up 0.9 percent, while Personal Income matched the previous month with a 0.5 percent increase. Meanwhile, the Revised University of Michigan Consumer Sentiment surged to a five-month high of 96.1 in June, due to improving labor market outlook.
Gold continues to have problems breaking through the $1,200 level. Therefore, last week’s warning about the vulnerability of the lower part of $1,100 remains.
Not much has changed in oil as it ping-ponged between $58 and $62 this week. Long-term downtrend remains intact. A move below $56 would ignite further weakness.
The break of 1.1300 and 1.1200 speaks volumes about EURUSD’s possibility in moving lower after this week. This eventuality would test the strength of possible support area around 1.08 to 1.10.
Like EURUSD, GBPUSD suffered a bearish week after the 1.5900 level formed a layer of defense from buyers and stuck with this defense throughout the week. Immediate support would come into play around 1.5600-60, if bears are interested to head that way.
USDJPY seems magnetized by the 124 level but somehow it found its way back down to 123 all throughout the week. Sellers might grow impatient and try to push this pair down toward 120 again.
The Week Ahead
Monday’s news activity will kick off early starting with Japan’s Retail Sales and Prelim Industrial Production, followed by Germany’s Prelim CPI; Spain’s Flash CP; UK Net Lending to Individuals; Canada’s RPMI and IPPI; and US Pending Home Sales.
On Tuesday, news activity will pick up, with New Zealand’s Building Consents; Japan’s Average Cash Earnings; Australia’s Private Sector Credit and ANZ Business Confidence; Germany’s Retail Sales and Unemployment Change; Switzerland KOF Economic Barometer; UK Final GDP and Current Account; Eurozone Jobless Rate and CPI Flash Estimate; Canada’s GDP; and US Chicago PMI and CB Consumer Confidence.
Wednesday will have Australia’s Building Approvals; Japan’s Tankan indices; China’s Manufacturing PMI and HSBC Manufacturing PMI; Spain, Italy, Germany, UK, France and Eurozone Manufacturing PMI; UK BOE Financial Stability Report; and US ADP Non-Farm Employment Change and ISM Manufacturing PMI. Canada will observe Canada Day.
Thursday will have Australia’s Trade Balance; Spain’s Unemployment Change; UK Halifax HPI and Construction PMI; ECB Monetary Policy Meeting Accounts; US Non-Farm Employment Change, Jobless Rate, Factory Orders, and Jobless Claims.
Friday’s activity will be brief with Australia’s Retail Sales; China’s HSBC Services PMI; Spain, Italy, France, Germany, UK, and Eurozone Services PMI; Eurozone Retail Sales. The US will observe Independence Day.