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This is a discussion on Hot Forex - Market Analysis and News. within the Daily Analysis forums, part of the Commercial category; Date : 22nd May 2015. TODAY’S CURRENCY MOVERS. EURUSD, Daily Yesterday’s weaker than expected existing home sales in US and ...

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Old May 22, 2015, 11:46am   #9
Joined May 2015
HFblogNews started this thread Date : 22nd May 2015.

TODAY’S CURRENCY MOVERS.


EURUSD, Daily

Yesterday’s weaker than expected existing home sales in US and a dip in the Philadelphia Fed Manufacturing index supported forecasts for only tepid pick up in Q2 growth after a very weak Q1. The May Philadelphia Fed Survey disappointed. The figure came in at 6.7 instead of 8.0 expected by the analyst consensus. This increased expectations that the Federal Reserve will maintain its current dovish stance.

EURUSD has been trading in the low-to-mid 1.11s, above Wednesday’s 1.1060 low. There was a lack of substantive progress at the latest summit in Riga between the Greek government and creditors in bailout negotiations. The on-going Grexit uncertainty might have been the reason the euro’s upside has been curtailed, while the May German IFO today should affirm the slowing in growth momentum that was seen in the ZEW and PMI surveys. ECB’s Draghi and BoE’s Carney are set to speak at an ECB conference on central banking in Portugal and today’s European data calendar is unlikely to give markets any reason to cheer. Another speaker worthy of mention is the Fed Chair Janet Yellen speaking later on today.

The resistance area created by the May 11th pivotal low has been holding EURUSD back but yesterday’s daily low was higher than the previous day’s low. This with the fact that price has moved higher from today’s open suggests modest bullishness on EURUSD. Daily bar lows also seem to honour a trendline drawn from April low. Stochastics are oversold and the lower Bollinger bands are catching up with the price. US Dollar index is looking weak as it’s trading below the shooting star candle lows from day before yesterday. Nearest support and resistance levels: 1.1052 and 1.1324.

Currency Pairs, Grouped Performance (% Change)

Modest EUR strength and USD and GBP weakness is dominating the Currency Movers charts today. AUD, NZD and JPY performance has been mixed. EURJPY, EURAUD, EURCAD and EURNZD are reacting higher from intraday supports and should EUR make a move today, these pairs are likely to follow.

Main Macro Events Today

German Gross Domestic Product (Q1) growth slowed to 0.3% q/q as expected, a significant decrease from the fourth quarter last year which was 0.7%. Still, taken the two quarters together, the underlying trend is robust. The very strong labour market, the rising wage growth and the boost to real disposable income from lower oil prices reinforced Q1.

US Consumer Price Index (YoY) is expected to remain unchanged, while the core index, which excludes food and energy products, is expected to rise to 1.7%, 0.1% lower compared to previous year’s result.

Chinese Manufacturing PMI (YoY) is expected to expand to 1.0% in April, 0.2% lower compared to the previous month. It is seen rising 0.1% on a monthly comparable basis in April after the expansion of 0.7% m/m in March and 0.9% m/m in February.

Janne Muta
Chief Market Analyst
Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 25, 2015, 5:01pm   #10
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HFblogNews started this thread Date : 25th May 2015.

USDJPY TRADING NEAR MARCH HIGH.


USDJPY Weekly

USDJPY has been moving side ways since the beginning of December 2014. The deepest correction has the retracement to 38.2% Fibonacci level in mid-December and was followed by another in January that attracted buyers just above the previous low. Since then price has challenged the previous high once and after failing to penetrate the resistance it created a higher low. Now the pair has yet again moved to the upper weekly Bollinger Bands. At the same time we have the US Dollar Index at a level that resisted moves higher in March this year.

USD has been relatively strong against the JPY throughout period it has been correcting against the other currencies and as the weekly lows have been higher with the latest CPI number from States surprising to the upside it could well be that the upper end of this range will eventually give in. At the end of the day it is more likely that the US Fed will hike the rates before the Japanese central bank which could even come up with yet another round of stimulus.

USDJPY Daily

Last week’s rally lifted USDJPY to the upper end of the range that has limited the pair’s movements since the end of the last year. Stochastics is overbought and price is reacting lower after moving above the upper daily Bollinger Band and also very close to the March high. If today’s daily candle closes to current levels or lower price has created a bearish shooting star candle. Stochastics is about to move below its three day moving average and could give a bearish signal should the weakness continue. Nearest support and resistance levels are 120.84 to 120.50 and 122.02.

USDJPY 240 min

The pair fell lower after hitting a historical resistance at 121.68 and has since found support at a minor support level that coincides with a high from Wednesday last week. This lack of upside momentum and a correction lower has eased the overbought condition in this timeframe and brought the oscillators lower. The nearest more significant support area (120.83 – 120.61) is currently near the lower Bollinger Bands and 38.2% Fibonacci level while the next major resistance is at 122.02.

Conclusion

Price is trading close to a longer term resistance and we could see market creating an exhaustion candle (shooting star). Today’s price action however might not be that important as many significant markets have been on holiday. Whenever a market is trading close to a resistance one should be looking for shorting opportunities. This market is trading near its resistance levels and therefore I would only initiate long positions after a correction to a significant support. Due to divergent inflation expectations and relatively strong US economy the dollar yen pair should eventually move higher but as usual a low risk entry would be preferable.Taking advantage of corrections to significant support levels such as the range created by Friday’s low at 120.61 and 1.5 stdv Bollinger Bands at 120.83 would be a preferable strategy to buying close to a resistance. Look for confirming price action at the key levels. If aforementioned support level fails to attract buyers assumptions in this analysis need to be re-evaluated.

Janne Muta
Chief Market Analyst
Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 26, 2015, 10:07am   #11
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HFblogNews started this thread Date : 26th May 2015.

TODAY’S CURRENCY MOVERS.


EURUSD, Daily

Yesterday the Fed Vice Chairman Fisher commented to the Reuters that he sees rates gradually rising to reach 3.25-4.00% by 2018. He said that the start of the tightening cycle would be determined by data, not a date. And that it is misleading to give so much importance to the Fed’s first rate hike. As the VC Fisher pointed out the rate hikes depend on the data, which gives the Fed a lot of leeway in determining the future interest rates policy.

Last Friday’s CPI surprise from US lifted the dollar index higher and sent the EURUSD lower. My view has been that with Fed being dovish EURUSD having a major correction without an external event would be unlikely. Now such an event has occurred and the market psychology has once again changed to favour the dollar. But this could change. As we have seen the mood swings in this market are constant and can change very quickly. The real test of this newly found readiness to bid for the USD comes when EURUSD hits the vicinity of March and April lows.

After the better than expected CPI figure on Friday pushed EURUSD through the support levels the pair has been drifting lower and crossed below the 50 day MA and lower Bollinger Bands. EURUSD has declined for six days without a decent rally higher and Stochastics is deeply oversold. That should mean that this downtrend is getting closer to a point where it is vulnerable to corrective rallies. Should there be a rally to the previous support area (1.1084 to 1.1131) it would make sense to look for shorting signals in that range. The 1.1131 resistance is a weekly low from two weeks ago and 1.1084 is a 38.2% Fibonacci level. The next support level is a 61.8% Fibonacci retracement at 1.0845 coinciding with daily highs from April. This could be a reasonable target for intraday short trades.

Currency Pairs, Grouped Performance (% Change)

USD strength with EUR and JPY Weakness are the clear themes this morning. GBPUSD has created a lower high in daily and is now breaking below a support at 1.5447. Next major support area: 1.5046 to 1.5193. USDJPY pushed higher through the resistances and is now trading above the March high of 1.2202. GBPJPY is trading close to a resistance created by December 2014 high but has found support from a daily sideways range and reacted higher.

Main Macro Events Today

US Durable Goods Orders (Apr) is expected down to -0.5% with shipments growing by 0.5% and inventories by 0.2%, an indication that more and more inventory is held out of the market.

US New Home Sales (MoM) (Apr) is seen rising by 2.9% to 495K compared to previous month’s results which was at 481K. Although the result is higher from March’s results, it is lower by 8.83% in relation to February’s result.

US Consumer Confidence (May) is expected to fall to 93.0 from 95.2 in April, a decrease of 2.36%. Other confidence indicators have declined in May, and Consumer Confidence is more likely to follow them.

Janne Muta
Chief Market Analyst
Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 26, 2015, 3:48pm   #12
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HFblogNews started this thread Date : 26th May 2015. (Second Analysis)

GOLD AT 50 DAY SMA.


Gold, Weekly

As USD has rallied higher over the last few days the price of Gold (in dollar terms) has moved lower. The high of the last week was above a resistance level at 1224.50 at a 50 week moving average. Now price is approaching a 50% Fibonacci retracement level at 1187. The 61.8% Fibonacci retracement at 1176.40 is relatively close to a weekly pivot low from April and coincides with daily Bollinger bands thus highlighting a level that has in the past turned price higher. However, before price can get that far there are support levels for bears to deal with. These support levels are visible at daily and 4h charts. In terms of higher time analysis Gold is in a sideways range with an upside bias as it has been able to make higher lows and (on a closing basis) a higher high. However, it seems to me that the resistance at 1224.50 to 1232 or so will need some work and real commitment from the bulls before it can be penetrated.

Gold Daily,

Price has broken below a support (now resistance) at 1200.80 and has fallen to (and slightly under) the 50 day SMA. This level is the closing high (highest close) of sideways move from the beginning of May. Stochastics are getting oversold and price is trading at a level that used to be a resistance. Nearest support and resistance levels are 1193.3 and 1200.80. The next important S&R levels after these are at 1177.90 and 1214.60.

Gold, 240 min

Trendline analysis in four chart reveals how Gold is trading at descending channel bottom that coincides with a range created by a 4h bar high (also a daily high) from May 12th and daily low from May 13th. Stochastics is overbought and the four hour bar could be creating a small pin bar indicating that price could reverse and move higher from here. Also, this price action takes place outside the lower Bollinger Bands adding to the oversold indication. Fibonacci levels coincide with potential resistance levels at 1202, 1207.8 and 1212.50. The region of 1207.80 coincides with the descending price channel and could act as a limit to potential upside moves.

Conclusion

Gold is in a sideways range with an upside bias as it has been able to make higher weekly lows and (on a closing basis) a higher high. However, it seems to me that the resistance at 1224.50 to 1232 or so will need some work and real commitment from the bulls before it can be penetrated. For short term traders Gold is at levels it could stage a small rally from. After correcting lower earlier today Gold has reached a level that has support in both daily and 4h time frames. With Stochastics oversold in both timeframes and market showing signs of downside momentum waning this level could cause the price of Gold to rally. Should there be appropriate long entry signals to justify buying at these levels, the Fibonacci levels in 4h chart could provide us with targets: T1 at 1202, T2 at 1207 and T3 at 1212. The region of 1207.80 coincides with the descending price channel and could act as an upper limit to potential upside moves. Follow the intraday charts to decide whether price action confirms the idea.

Janne Muta

Chief Market Analyst

Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 27, 2015, 12:31pm   #13
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HFblogNews started this thread Date : 27th May 2015.

TODAY’S CURRENCY MOVERS.


EURUSD, Daily

Yesterday’s US reports revealed small upside surprises. The durable goods figures for equipment beat estimates modestly despite a 0.5% April headline orders drop, while new home sales rose 6.8% in April to partly reverse a March plunge. The GDP growth outlook remains unchanged at 2.5% in Q2. We saw a May consumer confidence rise to 95.4 that defied declines in all other confidence surveys for the month, and the Richmond Fed index bounced as expected to 1 from -3. Only the Dallas Fed index disappointed, with a drop to a -20.8 six-year low from -16.0 in April. Additionally we had Richmond Fed’s Lacker speaking yesterday. He likes June as a “good time to begin considering raising rates,” suggesting that weak Q1 data is transitory and inflation is firming again after oil rebounds from its slide. Lacker is a known hawk in the FOMC.

EURUSD has recouped the 1.0900 level during Asian trade after leaving a one-month low at 1.0863 yesterday. The pair has fallen some 4% in seven of the last eight trading days after making a three-month peak. I suggested yesterday that the support at 1.0845 could work as a target for intraday trades as 61.8% Fibonacci level coincides with daily highs in April. Market turning higher slightly above this level suggests that others are eyeing the same level. Yesterday’s close was outside the lower 2 stdv Bollinger Band and should today’s close be inside the band probabilities of price rallying higher increase. The next significant resistance area is at 1.1084 to 1.1131.

Currency Pairs, Grouped Performance (% Change)

Apart from movements in CHF the price action in other currencies has been relatively small. Money has been moving into CHF from other major currencies and it is up by 40 to 50 basis points or more against all the other currencies except EUR. CHF has been especially strong against the JPY, up by over 0.75% at the time of writing. Euro’s relative strength against CHF adds to the EUR strength we are seeing against the USD and other majors. There is consistent JPY weakness even though the movements have most of the morning been subdued. An exception to this is CHFJPY. USD performance is a bit mixed after hitting a historical resistance level in DXY. From this point of view it’s interesting that EURUSD is close to a support, USDCAD is trading at resistance and NZDUSD close to a weekly support. Also USDCHF is reacting lower from a combination of historical resistance and upper Bollinger bands together with a 50 day SMA.

Main Macro Events Today

German Gfk Consumer Confidence Survey (Jun) rose to 10.2 from 10.1. Economic confidence is improving, as is the willingness to buy, despite the fact that income expectations eased slightly. This is a confirmation that the German recovery remains on track.

Japan Retail Trade (YoY) is expected to increase by 5.4% in April. Previous result dropped 9.7% y/y in March from a revised -1.7% y/y in February (was -1.8% y/y previously). Large retailers saw a 13.0% y/y plunge after a 1.3% February gain. However, we have to take into account that sales surged in March 2014 ahead of the April tax hike.

Janne Muta
Chief Market Analyst
Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 27, 2015, 4:15pm   #14
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HFblogNews started this thread Date : 27th May 2015. (Second Analysis)

EURAUD UP AFTER A HAMMER CANDLE YESTERDAY.


EURAUD, Weekly

EURAUD is moving sideways in wide range with support area between weekly lows at 1.3680 and 1.3912 while upper end is limited by the 50 week SMA and 38.2% Fibonacci retracement roughly coinciding. The nearest weekly high at 1.4277 is almost at level with the 38.2% Fib level at 1.4317 while the previous weekly pivotal highs coincide with the 50 week SMA. As 50 week SMA is pointing down this sideways market has some long term downward tendency. The lower weekly highs contribute to this picture but the fact that the weekly lows have been somewhat equal in March and April points to weakness in downside momentum. The latest weekly pivot low (at 1.3912) being so much higher than the previous lows is a positive indication.

EURAUD, Daily

In the daily picture EURAUD is moving higher from the proximity of a support level created by a sideways move in April this year. Yesterday’s candle was a hammer that is a bullish signal (points to higher prices) and now Stochastics is giving a positive signal by crossing above the signal line. Hammer candle also created a higher low which supports the bullish daily picture. There are no major daily resistance levels nearby while the first daily candle high that could cause the price to stall is at 1.4197. Above this are the upper Bollinger Bands and then the weekly highs. Nearest support levels are at 1.3950 and 1.3912.

EURAUD, 240 min

In 4h timeframe the recent price move took EURAUD to upper Bollinger Bands and close to a 4h pivot candle low at 1.4117. Not so far from the level is also a 50% Fibonacci level (at 1.4112 measured from the May 22nd high to the recent low of 1.3950). Over the last two four hour candles price has retraced back to a recent pivot and found buyers between 38.2% and 50% Fibonacci levels (measured from yesterday’s low to today’s high). The reaction we have seen from this level is healthy and supports the positive picture in the daily time frame. The pair is close to its recent 4h range highs as also reflected in Stochastics being at overbought threshold. At the time of writing the reaction from support has been strong and has coincided with the upsurge in EURUSD from the region of support I suggested in my Currency Movers Report. If the EURUSD strength continues EURAUD is likely to move higher as well.

Conclusion

The long term picture (weekly) is range bound which gives opportunities for swing traders at the range edges. Now that the daily picture has indications that buyers could be taking price higher (higher low and a hammer candle with Stochastics pointing higher) we look for price action based buy signals when there are retracements to intraday support levels. The daily highs are natural target levels with first one being at 1.4197 and the next at 1.4277. A break into new highs (above 1.4115) and a daily close above yesterday’s high at 1.4092 would be further confirmations of the bullish tendency seen in the daily chart. A failure to move above these levels accompanied with downward intraday trends would negate the positive picture.

Janne Muta

Chief Market Analyst

Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 28, 2015, 3:40pm   #15
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HFblogNews started this thread Date : 28th May 2015.

TODAY’S CURRENCY MOVERS.


EURUSD, Daily

EU says that further progress is needed in Greece talks. Yet again Greek officials are suggesting a quick deal with creditors, although today, it admittedly sounded more like this was just what Greek wants rather than a done deal. By contrast, creditors remain pessimistic and an EU spokeswoman said there are still issues that need to be resolved, with further progress needed in talks that will continue in coming days. Varoufakis calls for Greek debt restructuring, while saying that the IMF has a very dark history over the past 20-25 years. A Greek government spokesman meanwhile said the country is not planning to bundle its IMF repayments and aims to have a deal by Sunday. She also said that she is working on a common document with creditors. Creditors meanwhile continue to highlight that there are still considerable differences and Varoufakis’ comments on the IMF highlight that his tone hasn’t softened. This obviously is not helping. Neither are the conflicting messages coming out of Greece and it should be clear by now that only when creditor officials announce that a deal is imminent we can actually believe it. Greek officials seem to equate their hope for a quick deal, with actual progress. At the same time ECB’s Nowotny has commented the wider Eurozone economy by saying that there is no “currency war” in a historical range, but he admitted that the ECBs quantitative easing program has helped the Eurozone economy by weakening the EUR. However, he also warned that widespread negative yields can’t be normal.

We have seen some short term bullish momentum since yesterday in EURUSD and need to now have some follow-through (or more consolidation) to avoid further decline. At the time of writing EURUSD is trading inside yesterday’s pin bar range after it fell back from 1.0950 where it was close to the 50% Fibonacci level and Monday’s low. After yesterday’s reaction higher from support level and a close inside the lower Bollinger band the likelihood of price turning higher has increased. However, I would now like to see price creating a higher low and close above yesterday’s high to further support the reversal indication. This would suggest that price could move through the moving average resistance and to next resistance where previous support and 38.2% Fibonacci levels coincide. EURUSD is now approaching the levels that attracted buyers yesterday. Intraday price action at these levels is of high importance as we are looking for indications on markets’ collective opinion of this potential momentum reversal. Should the current support fail, the next significant daily support level is at 1.0660.

Currency Pairs, Grouped Performance (% Change)

Today’s clear trend is the AUD and NZD weakness. When compared to the USD currencies more or less have had the same percentage change (± 40 basis points) except AUD and NZD that have fallen 122 and 155 basis points respectively against the USD. Apart from the slight USD strength today the Euro and CHF have had some strength against the other currencies while GBP and JPY have had a mixed performance. Again, it’s the AUD and NZD weakness that have moved EURAUD and EURNZD more than other EUR pairs.

Main Macro Events Today

UK Gross Domestic Product (QoQ) Preliminary Q1 GDP came in sub-expectations at +0.3% q/q, half the median forecast and down from the 0.6% growth of Q4. Second estimation was expected at 0.4%, but the actual result was equal to previous 0.3%.

US Initial Jobless Claims came in higher than expected. The 7k initial claims rise to 282k in the fourth week of May extends the 11k bounce to 275k (was 274k) in the BLS survey, as claims continue to reverse the tightness in the prior three readings that started with a 262k cycle-low at the end of April. Claims are still tight versus pre-May levels however, and are displaying a cyclical downtrend that became obscured in early-April by a temporary spike around the Easter holiday period.

US Pending Home Sales (MoM) is expected to increase by 0.9% in April compared to previous result 1.1% in March. This is a leading indicator of the housing market in the US and the economy as a whole.

Japan National CPI Ex-Fresh Food (YoY) is expected to increase by 0.2% in April. An increase is expected after Core CPI improved to a 2.2% y/y pace in March from 2.0% y/y pace in February and 2.2% y/y in January. But the trend deceleration should be worrying policymakers.

Janne Muta
Chief Market Analyst
Hot Forex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Old May 29, 2015, 1:06pm   #16
Joined May 2015
HFblogNews started this thread Date : 29th May 2015.

TODAY’S CURRENCY MOVERS.


EURUSD, Daily

According to yesterday’s release US Initial jobless claims rose 7k to 282k (median 271k) for the week-ended May 23 from 275k (was 274k). Continuing claims rose to 2,222 from 2,211k for the week-ended May 16. This is near levels last seen in 2006. This weeks spike and the recent volatility is likely due to seasonal factors surrounding the Easter holiday.

The Preliminary annualized Gross Domestic Product data out today is expected to be revised to -0.9% from 0.2% in the release, following 2.2% growth in Q4. This report will give us more give more insights regarding US economy and its improvement. Greece continues to hang over the Eurozone, with wider market sentiment and hopes for a deal by the end of the month quickly fading. Yesterday’s deal-no deal comments by Greece and its creditors were more extreme than usual. It seems Tsipras was forced to express reassuring and optimistic comments to prevent panic and further deposit outflows ahead of the upcoming pension and wage payments. However, these statements are in conflict with creditor officials, highlighting that Greece is increasingly desperate for a quick deal since the extra time is over.

Yesterday the pair moved up to 1.0965 resistance level where the 50-day SMA coincides with the 50% Fibonacci retracement and closed above previous day’s high. Declining tops and bottoms form a downtrend and as we have now seen the expected upside reaction from 1.0848 support (coinciding with 61.8% Fibonacci retracement level drawn from the March 13th low to the May high) the chances have improved that the recent downward trend has reversed. Today’s price action and upside momentum have been subdued. The 1.1093 support at pivot candle high was enough to reverse an intraday down move today but there has not been a decisive move above yesterday’s high. If there is no strong decline today the weekly candle is will create a bullish pin bar. In this context the 50 day SMA is a minor resistance and we should see price moving higher next week. The intraday price action after the US GDP figures today (12:30 GMT) should give us more indications on for things to come.

Currency Pairs, Grouped Performance (% Change)

Today’s intra-day performance shows clearly the NZD weakness against all major currencies with moves extending up to approximately 70 basis points. AUDNZD has moved higher after a hammer candle indicated further upward momentum but has now hit a resistance at early may range low. NZDUSD has dropped below an important weekly support level. JPY is showing some varying strength against all major currencies, with CHFJPY being an exception and NZDJPY moving strongly, down by 75 basis points and at lower Bollinger Bands at the time of writing. GBP has been weak while USD has had a mixed performance.

Main Macro Events Today

US Gross Domestic Product (Q1) is expected to be revised to -0.9% from 0.2% in the release, following 2.2% growth in Q4, expecting to give more insights regarding US economy and its improvement. Forecast risk: downward, given outsized revisions in source data for trade and inventories. Market risk: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

Canada Gross Domestic Product is expected to increase by 0.2% in April at a moderate pace from the previous result that kept the percentage unchanged. The Q1 GDP report may be anti-climactic as anything between +0.5% to -0.5% will roughly match the BoC’s flat estimate. The key to the policy outlook remains, of course, what happens following the oil shock.

US Chicago purchasing managers’ Index is expected to come in at 53. Chicago PMI rose 6.0 points to 52.3 in April, better than expected, after increasing 0.5 points to 46.3 in March as the index continues to correct from the 13.6 point plunge in February to 45.8 (which was the weakest reading since July 2009). Both employment and new orders increased, and inventories declined. Prices paid also fell. The data are consistent with the Fed’s view that some of the weakness in Q1 was due to temporary factors.

Janne Muta
Chief Market Analyst
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