EURUSD Intra-Day Technical Analysis - bearish breakdown

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Press review

Sergey Golubev, 2015.07.14 08:24

Royal Bank of Scotland - 'EUR/USD goes lower multi-month but in a choppy range over the next few weeks' (based on efxnews article)

RBS is thinking that EURUSD will be in more ranging condition for the next few weeks:

• "The last minute agreement with Greece ought, in theory, play EUR/USD negative by allowing negative front-end rate spreads to be a bigger FX driver again. Also EUR negative, we believe, is the renewed fall in oil. For two to three months, markets have romanced the Euro area ‘reflation’ trade."
• "Conclusion: EUR/USD goes lower multi-month but in a choppy range over the next few weeks," RBS concludes.
  

If we look at Ichimoku chart D1 timeframe so we can see the following:

• the price is located inside Ichimoku cloud for ranging market condition;
• Senkou Span A line (which is the border between primary bullish and the primary bearish on the chart) is located near and above the price and it means the primary bearish market condition;
• AbsoluteStrength indicator in separate window is rising by bearish value (tomato colored line) and rising by bullish value (skyblue colored line) on the same time which means for ranging market condition to be continuing during the next few weeks.
• nearest support level is located in bearish arear of the chart: 1.0915 ;
• nearest resistance level is located in bullish area of the chart: 1.1215.

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Press review

Sergey Golubev, 2015.07.14 15:25

• past data is 1.0%
• forecast data is 0.2%
• actual data is -0.3% according to the latest press release

if actual > forecast (or previous data) = good for currency (for USD in our case)

[USD - Retail Sales] = Change in the total value of sales at the retail level. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

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Retail Sales in U.S. Unexpectedly Fall on Broad-Based Drop

"Sales at U.S. retailers unexpectedly dropped in June, curbing optimism about the strength of the rebound in consumer spending during the second quarter."

"Purchases decreased 0.3 percent after a 1 percent advance in May that was smaller than previously reported, Commerce Department figures showed Tuesday in Washington. The median forecast of 82 economists surveyed by Bloomberg called for a 0.3 percent gain. Eight of 13 major retail categories showed declines in demand."

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EURUSD M5: 43 pips price movement by USD - Retail Sales news event:

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Press review

Sergey Golubev, 2015.07.15 07:40

Fundamental Forecast - 'What Will Draghi Say?' - Citibank (based on efxnews article)

Citibank provided some forecasts concerning fundamental news events on Thursday related to ECB meeting and potential EUR reaction. Citi described it on 4 points to be mention:

1. "European data has improved, but undeniably the risks to Europe have increased".
   Citi analytics see a little option for Draghi for the situation improvement to reduce the risk.
   
2. "Growth has trudged along in Europe since the last ECB meeting. Broadly, there has been better data in France, Spain and Italy, with some weakening in Germany...Draghi is likely to remain cautious and given the decline in oil, there is some potential for a mildly more dovish message on inflation," Citi adds.
3. "We bias a weaker EUR through the press conference."
4. "Thursday’s ECB is going to be dependent to a large extent on the Greek parliamentary vote and Eurogroup bridge financing decisions."

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Press review

Sergey Golubev, 2015.07.15 12:18

Chair Yellen will present the Semiannual Monetary Policy Report before the House Financial Services Committee on Wednesday so this is the expectation of 10 major banks:

• Goldman: "We expect that her testimony will be in line with the June statement, minutes, and press conference."
• 
  
• Credit Suisse: "We expect Yellen to preserve Fed policy flexibility, and do not expect her to close the door on a rate hike as soon as September."
• 
  
• RBS: "We think it is unlikely that Chair Yellen deviates strongly from the conclusions presented in her comments on the economy last Friday, though the most notable point of interest could be on international developments, particularly in Greece."
• BNPP: "Today, we expect Fed Chair Yellen to repeat her Friday comments that she anticipates hiking rates by year-end but that data is key."
• BTMU: "A speech from Fed Chair Yellen in Cleveland last Friday has perhaps taken some of the importance away from today’s semi-annual testimony given it seems very unlikely that we will get any notable change in the message given in the Cleveland speech – that is that the FOMC remains of the view that the first rate increase will take place later this year. Crucially in Cleveland last week, Chair Yellen acknowledged more explicitly that while she believes slack remains in the job market “some tentative hints of a pick-up in the pace of wage gains may indicate that the objective of full employment is coming closer into view.” Measuring the slack in labour markets is notoriously difficult and hence if wages start to accelerate further that will provide more meaningful information on the degree of slack than any internal economic analysis."
• BofA Merrill: "Overall, we expect Yellen to sound cautiously optimistic about the US outlook, in line with her comments at the June press conference and the broad discussion by voters in the June minutes."
• Barclays: "We do not anticipate any change in the Fed’s rhetoric about the prospects of monetary policy and we expect Chair Yellen to continue highlighting the data- dependency of future decisions."
• SocGen: "Will Ms Yellen feel the need to reiterate warnings that the time for getting rates off the zero bound is now approaching? A bland warning that rates will have to go up eventually is probably neutral for FX markets."
• Credit Agricole: "Her testimony will reflect the committee’s view that the economy is approaching economic conditions “consistent with warranting a start to the normalization of the stance of monetary policy.” Fed officials are looking for more evidence that economic growth is sufficiently strong and labor market conditions continue to firm enough to return inflation to the Committee’s longer-run 2% objective over the medium term. Committee decisions on changes to the Fed funds target will be made on a meeting-by-meeting basis. We look for Chair Yellen to focus more on the gradual pace that the Fed is likely to take in the rate normalization process and to downplay the importance of the date of the initial move."
• Danske: "We expect her to repeat the message from last week that she expects lift-off this year. We believe the market is pricing too few rate hikes over the next 1-2 years."