Key To Markets - Discussions

Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM EURUSD Daily: Can the official data rebound in Q2?

Within the G10, the euro has underperformed

The euro continues to remain under pressure led by1Q weak economic data, dollar strength and recent Italian political concerns. The combination of these factors dampened the EURUSD near-term momentum.

Since the beginning of the year, the EZ economic growth fell below expectations. The fresh catalyst, EZ GDP, and core inflation data failed to impress the euro bulls.

GDP rose by 0.4% in both the EA and the EA during the first quarter of 2018, compared with the previous quarter. In the fourth quarter of 2017, GDP had grown by 0.7% in the euro area and by 0.6% in the EU. 1Q GDP data has provided a clear picture that EZ growth has slowdown. The critical question is Can the official data rebound in Q2?

“We still feel that peak growth is now behind us” according to ING Chief Economist Belgium, Peter Vanden Houte
He said “After a robust 2017, growth has somewhat slowed since the beginning of the year. While the first quarter has been affected by a number of one-off effects and underlying fundamentals remain supportive, we still feel that peak growth is now behind us.”

According to Williamson, Chief Business Economist, IHS Markit “The official growth rate for the first quarter was below the signal from IHS Markit’s Eurozone PMI, for which the first quarter average continued to run at a level broadly consistent with approximately 0.5-0.6% GDP growth.”

Inflation story remains weak

EA annual inflation rate was 1.2% in April 2018, down from 1.3% in March. A year earlier, the rate was 1.9%. EU annual inflation was 1.4% in April 2018, down from 1.5% in March. A year earlier, the rate was 2.0%. Especially the core inflation was 0.7%.

Since mid-April, the dollar is appreciating the fundamental shift. The yield on the benchmark 10-year treasury closed at 3.11% (Source: U.S. Department of Treasury).

“IHS Markit’s PMI surveys indicate that the US economy started the second quarter on a solid footing, commensurate with a robust increase in GDP. However, the surveys also point to accelerating inflationary pressures”, reported by Chris Williamson, Chief Business Economist, IHS Markit.

“The USD upward correction is not yet complete. Over the course of this week, our USD scorecard provided more signs of USD strength”, reported by Morgan Stanley. Also said, “However, there are limitations to this current USD advance. Ultimately, we believe that the steepening of the US yield curve, which for now is a USD-bullish signal, will undermine USD in the long term”,

Looking through Italian politics

We think EURUSD has been overreacting to the Italian political risk. As we pointed in our Tuesday’s article, we continue to be bullish on “EURCHF” over the medium term. The max downside we could expect is 1.1600 target at 1.2200 with supports are widely spread between 1.1730/1.1700-1.1660-1.1600. Every support is vital here.


The major EURUSD is traidng at 1.1800 and expect to remain in a tight range 1.1700-1.2000 in the near-term.

UBS reported, “The Italian political situation has so far failed to prompt a return to the wider market panic we saw at the height of the Eurozone crisis.”

Petr krpata analyst at ING reported the same. “The eurozone political risk premium as a driver of EUR/USD has diminished meaningfully over the past years (recall the flattish EUR/USD during the summer 2015 Greek crises and the lack of EUR/USD downside ahead of the first round of French presidential elections last year). We thus don’t look for any eurozone political risk premia driven EUR/USD downside.”

Conclusion: We expect in EA various economic indicators to show an expansion in May. The Flash Manufacturing and Services May PMIs are due next week (May 23). The surveys will provide further clues to 2Q growth.
Credit Suisse forecast “Manufacturing and services PMI should rise to 56.7 and 55.2, respectively, in May and bring the composite PMI to 55.6 (vs. 55.1 previously).”

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Weekly: Global economic calendar (May 21-25). Chart of the week- Gold

  • Inflation for UK and Japan
  • Flash PMIs for EA and PMIs for the US are in focus this week
  • May FOMC minutes could provide clues for future rate path

AUDUSD, NZDUSD, and Gold manage to off marginally from weekly lows. Whereas, EURUSD and GBPUSD closed at the multi-month lows. The USD strength since the end of Jan 2018 and rising US government bond yields have been the trigger for the sentiment. The 10-year government bond yields pushed to 3.11% on Thursday but retraced and closed at 3.06% on Friday.

EUR:

Also read: Can the official data rebound in Q2?
http://www.keytomarkets.com/blog/blog/ktm-eurusd-daily-can-the-official-data-rebound-in-q2/

We expect in EA various economic indicators to show an expansion in May. The Flash Manufacturing and Services May PMIs are due next week (May 23). The surveys will provide further clues to 2Q growth.

GBP:

After the Bank of England monetary policy summary, market participants and economists have downgraded the GBP bullishness. April inflation report, CPI data and the 2nd estimate of 1Q GDP are the catalysts for the pound’s near-term action. These releases will provide clues for BOE’s future rate hike path.

According to Chris Williamson, Chief Business Economist, IHS Markit “The week includes a particular wealth of data releases which will provide clues as to whether the Bank of England will remain on course to hike interest rates this year.”

USD:

The USD strength since the end of Jan 2018 and soaring US government bond yields are the little reason to focus on the FOMC minutes in an ultra-edge view. In May meeting FOMC has changed the inflation language. “Inflation on a 12-month basis is expected to run near the Committee’s “symmetric” 2 percent objective over the medium term.” Also said, “The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal.” We are seeking more clarification in the May minutes.

Chart of the week: Gold


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM EURUSD Weekly: Every support is vital

It’s a big week for EUR with concerns over Italian politics and May PMIs grab the central stage. The common currency tested the 38.2% fib reaction 1.1716 and rebound to 1.1795 overnight. Italy 40 (KTM terminal: Italy FTSE MIB 40) index closed below 100MAs and retraced 50.0% of the recent rally (March 05-May 07).

The Eur enthusiasts are more concentrating on “Mini-BOTs” a common Italian Treasury bill which pays no interest, proposed by Five Star Movement and the anti-immigration League.

“Mini-BOT — is a play on BOT, or Buoni Ordinari del Tesoro, a common Italian Treasury bill or short-term credit note,” reported by Bloomberg.

Data preview:

  • GDP rose by 0.4% in both the EA and the EU during the first quarter of 2018, compared with the previous quarter
  • EA annual inflation rate was 1.2% in April 2018, down from 1.3% in March. A year earlier, the rate was 1.9%

Data preview:

We expect in EA various economic indicators to show an expansion in May. The Flash Manufacturing and Services May PMIs are due next week (May 23). The surveys will provide further clues to 2Q growth.

Credit Suisse forecast “Manufacturing and services PMI should rise to 56.7 and 55.2, respectively, in May and bring the composite PMI to 55.6 (vs. 55.1 previously).”

Nomura: We expect the euro area composite PMI for May to climb to 55.3 from 55.1 in April. At the sector level, we expect the regional manufacturing PMI to increase to 56.4 from 56.2 and the services PMI to increase to 54.9 from 54.7.

Read full story:
http://www.keytomarkets.com/blog/blog/ktm-eurusd-daily-can-the-official-data-rebound-in-q2/

TECHNICAL OVERVIEW​

Eur manages to hold the 38.2% fib reaction (1.0340-1.2550 rally) which is our lower end of the forecasted range. As we pointed in our earlier articles, the near-term action packed in a tight range between 1.1700-1.2000. Break lower could open further to 1.1660 and Nov 07 low 1.1555 with resistance seems to be at 1.1900 and 1.2000.



Looking through Italian politics

We continue to be bullish on “EURCHF” over the medium term. The max downside we could expect is 1.1600 target at 1.2200 with supports are widely spread between 1.1730/1.1700-1.1660-1.1600. Every support is vital here.
Read full story:
http://www.keytomarkets.com/blog/blog/ktm-eurusd-daily-can-the-official-data-rebound-in-q2/

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM Crypto Daily: Bitcoin is coming to the three-month support

The most famous virtual currency Bitcoin has taken power out (moving averages) on Wednesday. Bitcoin (KTM: BTCUSD) is trading below 8000.00$ mark for the first time since May 18. Since February 2018 the cryptocurrency has been locked in a symmetrical pattern formation. Breaking below will allow room to extend further retracement to the A-B-C corrective pattern pointing to 4450.00$ with potential resistance seems between 8550.00$-8600.00$.



In the near-term the price is coming to the parallel support (H4 chart) is found at 7595.00$ below this 7450.00$ exists.


We are glad to announce the introduction of 6 new Cryptocurrencies, which are now available in your Metatrader 4: Bitcoin (BTCUSD, BTCEUR), Ethereum, Ripple, Litecoin, Dashcoin, Bitcoin Cash.

Read Trade 6 new cryptocurrencies directly on KTM Metatrader 4
http://www.keytomarkets.com/blog/ne...ryptocurrencies-directly-on-ktm-metatrader-4/

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM customer agent is ready to assist you, click on the comment section below
info@keytomarkets.com
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Daily: USDCAD strategy

After another successful test of the lower end of the consolidation range on Tuesday, the USDCAD bounced back to the higher end of the range. Since, two weeks, the price has been locked in a tight range between 1.2925-1.2728 levels. On top of it the price traced out a near-top near between 1.2925-1.2915 in May 15-18-23 via the formation of a triple top.

In a bearish scenario, we can see some near-term topping where a break below 1.2728 May 11 low. In this case, as per the A-B-C corrective pattern target comes into the limelight which is pointing at 1.2400.

Noting that the parallel support zone spread between 1.2660-1.2600 levels.

Alternatively, a breach above 1.2930 could open to 1.2990/1.3000 levels. A further boost could possible when a breach above 1.3000 targets 1.3200 noting that 1.3125 mid-March high is key resistance.

1.2925>1.2990/1.3000>1.3125>1.3200


Earlier we suggested to buy the dip but we missed the recent rally. We remain cautiously NEUTRAL as we continue to study the action.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below

 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Daily: USDJPY and EURJPY overview

The dollar index (KTM: DXY) retraced and US 10- year yields fell again to 2.98% overnight after Trump canceled his summit with North Korea. The yellow metal resume short-term rally to the 200MA.

USDJPY tested and held the 100EA overnight, EURUSD consolidating at six-month lows, AUDUSD consolidating in a tight range between 0.7520-0.7585 and the kiwi dollar has been facing stiff resistance at 14MA. The USDCAD again bounced back to the higher end of the range. Since, two weeks, the price has been locked in a tight range between 1.2925-1.2728 levels. On top of it, the price traced out a near-top near between 1.2925-1.2915 in May 15-18-23 via the formation of a triple top.
Whereas things change short-u-turn in the Asian session, Yen lower marginally.

News: KCNA reported, North Korea says leader Kim Jong un has made utmost efforts to hold the summit with Trump

JPY crosses: Correction at early stages


USDJPY

This week USDJPY retraced more than 2%. We suggested taking profit on sell trade with 1.5% profit.
After the volatile retracement pattern from this week’s high the USDJPY lost more than 2%. We saw and continue to see a further retracement in the coming days. Having completed our suggested selling trade, we are cautiously bearish anticipation for another correction leg to 108.00, and 107.30 levels with resistances seem to be at 110.00 and 111.00. This suggests that the downtrend is set to reassert itself as the daily RSI study unwinds a series of bearish divergence that formed between 110.00-111.39 levels. The shift in sentiment indicates that rallies to resistance at 110.00 and 110.80 should attract selling interest with support against the May 04 low at 108.65. Below here the focus will move down to 50MA and Sep 08 low.

EURJPY
EURJPY retraced 2.80% this week finally pauses the sliding action at parallel support at 127.55. Before retraced to 127.70 levels the cross spotted with a bearish H&S pattern aiming at 126.80 which coincides with the 38.2 fib reaction (below chart) with resistances seems at 129.60 and 131.40.
Looking through the price action from Jan high’s the price has been sliding in the falling channel. The corrective wave structure marked as A-B-C pointing to 124.90 below this the 50.0% fib reaction exists at 123.50. Overall in the medium-term (Q2), support zone finds between 125.00-123.00 its 100MA (monthly)


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Weekly: Global economic calendar (May 28-June 01)

Data wise this week’s primary focus is on the release of the May NFP.

The commodity currencies AUD and NZD were off marginally from weekly lows against the greenback last week. Especially gold breaks above the six-day trading range but rejected at 200MA. Whereas, the common currency EURUSD and GBPUSD closed below the 38.2% fib reaction each on a weekly basis. Fully established Brent oil breaks the H&S and Ascending triangle patterns and lost the height rapidly. US T10s were closed below 3.0% last week

EUR

Last week’s weaker PMI and recent Italian political situation has triggered the EUR sell-off. The week ahead new official data EZ inflation print (Thu) is likely to engineer the EURUSD near-term range. Concerning FX technical pattern the major has been sloping for the second consecutive month. The run last extended to 2 months between Sep-Oct 2017.

GBP

Data releases this week likely to have a limited impact on the GBP. Looking over the coming weeks, we believe the official data prints will pave the way to the Q3 rate hike. The cable closed below the 50MA; euro cross remains in a tight range, GBPJPY closed blow the pivotal and shifted the focus to the parallel support.

USD

The FOMC minutes revealed the next rate hike is coming soon. The persistent dollar buying is increasingly overbought ahead of the NFP (Fri). We expect the May payroll will be in a growth mode of 215k. We are mainly focusing on the wage growth.

HIS Markit’s flash PMI survey data for May point to a jobs gain slightly in excess of 200,000 a number which would fuel higher expectations of up to three further hikes in 2018.

CAD

We expect the Bank of Canada should key the interest rate at 1.25%. A hawkish shift would keep the take the pace off. USDCAD closed tad below 1.3000-mark, breakout and settles through the 12-month descending trendline could boost further to 1.3200 levels.

Read: USDCAD strategy
http://www.keytomarkets.com/blog/blog/ktm-fx-daily-usdcad-strategy/

Chart of the week:

EURUSD: Seventeen-month Ascending trendline have captured our attention
http://www.keytomarkets.com/blog/blog/ktm-fx-weekly-eurusd-closed-below-the-safe-altitude/


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM EURUSD Weekly: More vibrations ahead of EZ inflation and NFP

Euro rattled in the European session after a gap up opening. In yesterday’s Asian session, EURUSD was reacted positively rallied to 1.1728 but wiped off earlier intraday gains in the European session. The Italian equity index (KTM: ITA40) down more than 2.0% and Italy 10y risk spread over Germany jumped to 230 pips.

Continued Italy political concerns are weighing on the euro currency and European equity markets. Now Spain too added to the political concern camp. “Spain’s parliament agreed Monday to subject Prime Minister Mariano Rajoy to a vote of no confidence this week in the wake of graft convictions of businesspeople and officials tied to his conservative Popular Party” reported by Associated Press.

EZ growth has slowed since the beginning of 2018 after a substantial growth posted in 2017. Continued soft data in Q1, concerns related to Italy political developments and the rate divergence are the critical pieces of evidence we have, to confirm further euro depreciation. Last week’s German Ifo data force us to stay cautious neutral ahead of the EZ inflation data. A better reading could provide quick rally but will it sustain is the vital concern.

Besides, the dollar index (KTM: DXY) surge above mid-Dec 2017 high despite US holiday. The parallel resistance spread between 95.00-95.30.

Data wise this week’s primary focus will be on the release of the May NFP (Fri). In EZ new official data inflation print (Thu) is likely to engineer the EURUSD month end positions. The other week the price was capped at 1.1998 whereas near-term price action remains cast on the data (EZ inflation and NFP).

“The preliminary May month-end FX hedge rebalancing estimate points to USD selling and buying of all other currencies on Thursday, 31 May” reported by CitiFX. Analyst Kristjan Kasikov said in the report, “Poor performance of Euro Area equities and bonds makes buy EURUSD the strongest signal this month-end at +1.1 standard deviations. Other USD sell signals measure around 0.8 standard deviations.”

Data review:

Flash France Manufacturing PMI up to 55.1 from 53.8 in April,3-month high
Flash France Services PMI falls to 54.3 in May from 57.4 in April, 16-month low
Flash Germany Manufacturing PMI falls to 56.8 from 58.1 in April, 15-month low
Flash Germany Services PMI falls to 52.1 from 53.0 in April,20-month low
Flash Eurozone Manufacturing PMI falls to 55.5 from 56.2 in April,15-month low
Flash Eurozone Services PMI falls to 53.9 from 54.7 in April, 16-month low
Germany Ifo Business held steady at 102.2 points (bright spot)

Data preview:

We expect EZ inflation (Thu) to accelerate to 1.6% from 1.2%.
The volatility maker NFP (Fri) will direct the DXY’s near-term as the index is getting tactically overbought. We expect the May payroll will be in a growth mode of 215k. We are mainly focusing on the wage growth.

TECHNICAL OVERVIEW​

The shared currency technically getting oversold, the next level to watch is 1.1610-1.1550 (17-month Ascending trendline). A break below could open to a final retracement to 1.1450 its 50.0% fib reaction -1.1400 levels. With breaking and closed below the 38.2%, fib reaction the major’s risk-reward profile has titled to the further downside. We see levels at 1.1740 as likely to meet initial resistance above this, 1.1835 exists. The price has been dropping for the second consecutive month. The run last extended to 2 months between Sep-Oct 2017.


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Daily: NFP preview and FX comments

The tradable dollar index (KTM: DXY) down 0.9% whereas the US 10year treasury yield rose from 2.77% to 2.84%, still far below the benchmark level 3.00%.

FX comments:

USDCHF shifted to a lower to lower high pattern after traced out a double top 1.0038-1.0056 between Oct 2017 and May 2018

USDJPY manage to hold the 100MA which nearly coincides with the earlier breakout level. Ahead of the payroll data (Fri) trading range remains between 107.30-110.00 levels.


USDCAD again rejected at 100MA (weekly), in the case failed to close above 1.30 on a weekly basis could confirm a triple top pattern

USDZAR refused at 200MA; trading range remains between 12.35-12.90

USDTRY remains under pressure ever since traced out with a double top at 4.80, today in Asia session hovering above 20MA.

Finally, the dollar index (KTM: DXY) rejected at a parallel resistance and traced out a double top pattern at 94.94. Ahead of the May employment data potential opposition seems between 95.00-95.50. Mon-end FX positioning is indicating strong USD selling.



According to Juan Prada analyst at Barclays, “The passive rebalancing model at month-end points to dollar selling against major peers. The signal is strong against EUR and GBP, moderate vs. CAD and AUD, and weak vs. JPY” reported in a note to the clients.

Read EURUSD: Technical overview
http://www.keytomarkets.com/blog/blog/ktm-eur-fx-daily-sentiment-has-improved-for-now/

Data risk:

On the data front, May NFP scheduled on Friday. We expect the May payroll will be in a growth mode of 215k. We are mainly focusing on the wage growth.

Here are the analysts forecast on the upcoming NFP data.

HIS Markit’s flash PMI survey data for May point to a jobs gain slightly in excess of 200,000 a number which would fuel higher expectations of up to three further hikes in 2018

Nomura: We expect a solid 205k gain in nonfarm payroll employment in May. We also forecast average hourly earnings (AHE) to increase 0.2% m-o-m with only a small downward bias from calendar effects. Finally, we expect the unemployment rate to remain unchanged at 3.9%.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​
 

KeyToMarketsUK

Active member
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Daily: FX insight

The dollar index (KTM: DXY) further weakened on Thursday and tested the 50MA. The US 10YT remain far below 3.0% closed at 2.83% overnight.
We are closely monitoring the dollar index as it is facing stiff resistance at the parallel resistance. Ahead of today’s NFP supply pressure remains between 95.00-95.50. The daily studies are staying bearish, and the month-end positioning is too suggesting bearish views.

According to Juan Prada analyst at Barclays, “The passive rebalancing model at month-end points to dollar selling against major peers. The signal is strong against EUR and GBP, moderate vs. CAD and AUD, and weak vs. JPY” reported in a note to the clients.

Morgan Stanley reported, “Our scorecard is increasingly suggesting the USD rally is over and USD weakness should begin soon.”

The technical pictures of USDCAD, USDCHF, USDDKK, and USDJPY are remaining bearish.


We forecasted a bearish view on USDJPY with a target at 108.00, on Tuesday the price traded through our given target we set early May. Now we remain cautiously NEUTRAL as we continue to study the action.
Intraday support finds at 108.00 and 107.30, on the flip side resistance seems to be at 109.50 and 110.10 levels.


USDCHF has shifted to a lower low and a lower high pattern after traced out a double top 1.0038-1.0056 between Oct 2017 and May 2018. Intraday trading range remains between 0.9770-0.9980 levels.

EURUSD has erased the falling channel, the next level to watch is 1.1720 its 14MA above this, 1.1770 its 20MA exists. Flipside 1.1600-1.1575 and 1.1500 are the support levels to watch. A break above 1.1835 could confirm the corrective rally to 1.1900 and 1.1950 levels.

AUDUSD has been in a narrow range for five weeks with potential resistance seems to be at 0.7610 its 50MA. Today’s trading range likely to be remain between 0.7610-0.7460 levels, noting that its20MA sits at 0.7530. Breaking and close above the 50MA would confirm further rally to 0.7640

Gold price remains locked in a tight range between 1308$ and 1292$ breaking below could open to re-test the 1285$ and 1277$ level. Flipside multiple resistance seems to be at 1308$ a breakout could offer further bullish targets to 1314$.


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
 

KeyToMarketsUK

Active member
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Weekly: EURUSD 23.6% fib reaction is commanding the corrective rally

EURUSD has stabilized after Italy’s political risk premium narrowed. The major is subject to consolidate in a tight range this week after a decent rebound from last week’s low. The latest political developments in Italy and the month-end FX positioning are indicating the euro is offering limited upside risk in the tight range.

Yesterday’s economic data Sentix investor confidence revealed that the EZ is lingering with less optimism. “The new government in Italy is giving investors fears for the eurozone” reported by Sentix, the pioneer and leading provider of sentiment analyses (behavioural finance) in Europe. In the press release, the research institution also reported “The eyes are now once again on another Italian, Mario Draghi. How will the ECB respond to the new political situation?”.


Turning to Germany, the economy is also under pressure for the fifth time in a row, the overall index for Germany has fallen to its lowest level since July 2016. “The German economy, which seemed invulnerable at the beginning of the year, is now facing a relatively rough headwind. Expectations drop significantly to -13.8 points.” Said Sentix.


Whereas moving to inflation data for EZ, Spain, and Germany the readings are well anchored above market expectations. Based on the last week’s inflation readings we could confirm that Macro data is likely to cast this week’s technical trend as political risk is almost priced in the near-term euro’s action.

Data review:

Investor confidence for the Eurozone fell by more than 11 points to – 13.3. This is the lowest level since August 2012
Germany CPI are expected to increase by 0.5% on April
The annual inflation of the Spain CPI in May 2018 was 2.0%. It would imply an increase of nine tenth in the annual rate, since in April this change was 1.1%
Over one month, French CPI should increase a little stronger than in April +0.4% after 0.2%
EA annual inflation is expected to be 1.9% in May 2018, up from 1.2% in April 2018

Data preview:

The release of the services PMI for EZ being watched closely but not a game changer.

TECHNICAL OVERVIEW​

In May DKK, EUR and GBP were the weakest currencies in the G10 space.


We believe CAD, TRY and NZD could perform further in June against the EUR.


The growing number of resistances are indicating the price capped for Q2. Selling pressure remains very strong at the parallel resistance seems to be at 1.1750, May 24 high which coincides with the 20MA and the 23.6% fib reaction( 1.2555-1.1510 correction). Earlier May 14, the price was rejected at the same 23.6% (1.2555-1.1822 correction).

Whereas the price manages to close above the descending channel is still open the possibilities to breach the 20MA. A stiff footprint above the parallel resistance could open further to 1.1800/1.1820 and 1.1870 in the coming days. The daily studies RSI and the oscillator are remaining bullish.

Last week, we forecasted a cautious neutral view and later upgraded to cautiously bullish. Now we retain our cautiously bullish view with supports at 1.1590 and 1.1500.

Q2 range: 1.2000-1.1450


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
 

KeyToMarketsUK

Active member
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM Commodity: Copper breaking the symmetrical triangle

Copper has continued to rally with breaking the symmetrical triangle resistance trendline, and the psychologically crucial forthcoming resistance seems to be at 3.2980. Since the daily and weekly oscillator has picked up and another bullish break through Dec 2017 high could open fire to July 2014 high 3.2900 and 3.4200 levels in the medium term. The supports are at 3.1600, and 3.02 double bottom and additional support are at 2.9500 levels.


NOTE: Copper and AUDSUD are highly correlated. We expect AUDUSD will follow Copper’s way in the coming days. Today Aussie GDP is the key driver to the cross AUDSUD.



It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below
 

KeyToMarketsUK

Active member
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX: EURUSD more developed player

EURUSD briefly breached 23.6% fib reaction (1.2555-1.1510 correction) on Wednesday. Once again it will be quiet regarding Tier-1 data releases, and that will leave investors’ focus on next week’s Fed and ECB press conference.

Data review:

Spain and Italian Services sectors are continued to expand during May whereas France and Germany shifted down a gear during the same period. We could expect France and Germany growth could rebound in June.

According to Chris Williamson, Chief Business Economist at IHS Markit said “The pace of eurozone economic growth sank to a one-and-a-half year low in May, and has now slowed continually since January’s peak to suggest that the region is on course for its worst quarter since 2016.

Chris also said, “With the economic indicators turning down at the same time as political uncertainty has spiked higher, the eurozone’s outlook has darkened dramatically compared to the sunny forecast seen at the start of the year.”

• Spain Services PMI rose to a three-month high of 56.4 in May, from 55.6 in April
• Italian Services PMI posted 53.1 in May, up from 52.6 in April
• France Services PMI down to 54.3 in May, from 57.4 in April
• German Services PMI fall from 53.0 in April to 52.1, its lowest reading since September 2016
• At a 16-month low of 53.8, the final Eurozone PMI Services Business Activity Index was below April’s 54.7 and the earlier flash estimate of 53.9

Turning to central bank’s policy meeting, RBA remained on hold whereas RBI increased the interest by 0.25%. It is widely accepted the Federal Reserve will hikes interest rates again in June 12-13 meeting. As we pointed in our earlier article, we remain to our forecast, “expect four Fed hikes in 2018, but more confirmation will be available at the June meeting”.

Moving to ECB’s June 14 meeting, we could expect a hawkish twist and remained to our EURUSD bullish view. According to Peter Praet, Member of the Executive Board of the ECB said: “ Next week, the Governing Council will have to assess whether progress so far has been sufficient to warrant a gradual unwinding of our net purchases.”.
Regarding inflation Peter said “Signals showing the convergence of inflation towards our aim have been improving, and both the underlying strength in the euro area economy and the fact that such strength is increasingly affecting wage formation supports our confidence that inflation will reach a level of below, but close to, 2% over the medium term”.

Based on his speech at the Congress of Actuaries, Berlin we expect the probability of policy change is growing bigger either in next week’s meeting or in July.

Finally looking through the FX technical picture, the EURUSD surpass the 23.6% fib reaction and manage to close above 20MA for the first time since mid-April. Supports are at 1.1650 and 1.1590. The flip side, resistance seems to be at 1.1800/1.1835 and 1.1870 levels.


The Q2 range will remain between 1.1450-1.2000

Read: Retain our EURUSD cautiously bullish view
http://www.keytomarkets.com/blog/bl...-reaction-is-commanding-the-corrective-rally/

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​
 

KeyToMarketsUK

Active member
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX: Friday morning FX comments. Chart of the day EURCAD

The Central Bank of Turkey raised the repo rate for one week to 17.75%, up from 16.5% previously, as a result, Turkish Lira strengthens 2.00% overnight. The dollar index (KTM:USDX) at 93.40, US 10Y at 2.93% remain below 3.0%.

Today once again it will be quiet regarding Tier-1 data releases, and that will leave investors’ focus on Canada’s jobs data.

FX:

AUDUSD: Failing at 100EA, consolidating between (0.7595-0.7675)

AUDNZD: Traced out a double top and rejected at 200MA

EURUSD: Manages to close above 20MA again

EURGBP: Rejected at 200MA

GBPUSD: Manages to close above 20MA again
USDJPY: Stiff resistance @200MA
USDCHF: Closed below 50MA. Scope to test the support zone 0.9770-0.9730

USDTRY: Hovering above the parallel support at 4.4470

USDZAR: Closed above 200MA finally whereas 13.20$ will be the lid

NZDUSD: Paused at 38.2% fib reaction (0.7395-0.6850)

Commodity corner:

Bitcoin: Unable to breach the early June high

Brent: Rebound 50.0% of the recent fall but a tad below 20MA at 77.50$

Copper: Fail to close above Dec 2017 high

Gold: Locked between 1308$-1289$

Silver: Rejected at 200MA. Bullish breakout looms >17.00$

Chart of the day: EURCAD

The cross was rejected at 1.5360 the parallel resistance above this, we see levels between the 1.5460-1.5510 as likely to meet resistance, and we target a move towards 1.5150 in the first instance. Noting that 50MA exists at 1.5380.


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​
 
Mar 28, 2017
370
0
26
www.keytomarkets.com
KTM FX Weekly: ECB vs FOMC preview

The brand new week wraps with the G3 central banks FOMC (Wed), ECB and BOJ (Thu) monetary policy meetings.

Central bank meetings: Ahead of the three central bank meetings USD, EUR and JPY crosses need more attention.

ECB vs FOMC

  • Weak economic data vs Better data
  • Hawkish hold vs Neutral hike
  • Euro favors dip buying vs dollar’s limited upside risk

Hawkish hold:

Recent Italy turmoil and the saga of weak economic data would push the policy normalization till the end of 2018 at least. The ECB began to be shrinking the net asset purchase in Jan 2018 from 60Bn euro to 30Bn euro.

We are more focusing on the ECB’s macro projection in June 14 meeting. Recent Italy political turmoil would shift the ECB to wait and see approach for short time. The macroeconomic projections cover the outlook for the euro area, in particular with regard to GDP and inflation.

GDP rose by 0.4% in both the EA and the EU during the first quarter of 2018, compared with the previous quarter, according to an estimate published by Eurostat.

A recent set of inflation data revealed Euro area annual inflation is expected to be 1.2% in April 2018, down from 1.3% in March 2018, according to a flash estimate from Eurostat.

The ECB’s preferred inflation measure HICP is expected to be 1.9% in May, up from 1.2% in April 2018, according to a flash estimate from Eurostat, the statistical office of the European Union.

HICPs are used for the assessment of the inflation convergence criterion as required under Article 121 of the Treaty of Amsterdam and by the ECB for assessing price stability for monetary policy purposes. The ECB defines price stability on the basis of the annual rate of change of the euro area HICP. Source: eurostat

“We expect a moderate downward revision in the ECB growth projection (for 2018, not for 2019/2020) and upward revisions to the inflation forecast for 2018/2019, but not for 2020 (1.7%) “according to UBS.

Post last week’s Peter Praet remarkable speech, the hawkish odds have been elevating gradually but still on a cautious note. Based on his speech at the Congress of Actuaries, Berlin we expect the probability of policy change is growing bigger either in next week’s meeting or in July

According to Peter Praet, Member of the Executive Board of the ECB said: “ Next week, the Governing Council will have to assess whether progress so far has been sufficient to warrant a gradual unwinding of our net purchases.”.

Regarding inflation Peter said, “Signals showing the convergence of inflation towards our aim have been improving, and both the underlying strength in the euro area economy and the fact that such strength is increasingly affecting wage formation supports our confidence that inflation will reach a level of below, but close to, 2% over the medium term”.

The FOMC meeting outcome is widely expected to be hawkish in June 12-13 meeting. As we pointed in our earlier article, we remain to our forecast, “expect four Fed hikes in 2018, but more confirmation will be available at the June meeting”. The dollar bullishness cast on the clues regarding further tightening later this year.

FX : We forecast EURUSD (buying the dip), EURJPY (Neutral) and USDJPY (Neutral) in the Q2.

Especially in EUR crosses EURJPY (limited upside), EURGBP (remained in a tight range) and EURCHF (buying the dip at 1.13) favors the trend.

Chart of the day: EURUSD
Read: http://www.keytomarkets.com/blog/blog/ktm-fx-weekly-global-economic-calendar-june-11-15/


It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below​