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NZD/USD weekly outlook: December 1 - 5
The New Zealand dollar declined against its U.S. counterpart in holiday-thinned trade on Friday, as tumbling oil prices weighed on appetite for riskier assets.
NZD/USD hit 0.7765 on Tuesday, the pair\'s lowest since November 11, before subsequently consolidating at 0.7842 by close of trade on Friday, down 0.36% for the day and 0.5% lower for the week.
The pair is likely to find support at 0.7765, the low from November 25, and resistance at 0.7925, the high from November 27.
Oil prices tumbled following Thursday’s decision by the Organization of the Petroleum Exporting Countries to keep production quotas unchanged, fuelling fears over a global supply glut.
London-traded Brent prices lost $2.43, or 3.35%, to settle at $70.15 a barrel on Friday, while New York-traded crude futures plummeted $7.54, or 10.23%, to close at $66.15 a barrel.
The US Dollar Index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set earlier in the week.
Demand for the dollar continued to be underpinned amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
In the week ahead, the U.S. is to release the U.S. jobs report for November on Friday as market players attempt to gauge the strength of the world\'s biggest economy and its impact on the Fed\'s monetary policy.
Monday, December 1
- China is to release official data on manufacturing
activity, as well as the HSBC manufacturing index. The Asian nation is
New Zealand\'s second-largest trader partner.
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Wednesday, December 3- The U.S. is to release the ADP report on private sector
job creation, while the ISM is to publish a report on U.S. service
sector activity.
Thursday, December 4- The U.S. is to release the weekly report on initial jobless claims.
Friday, December 5GBP/USD weekly outlook: December 1 - 5
The pound fell against the dollar on Friday, closing in on 14-month lows as a selloff in oil prices fuelled fears over disinflation, bolstering demand for the greenback.
GBP/USD touched lows of 1.5614 and was at 1.5640 late Friday, off 0.61% for the day, and not far from the 14-month trough of 1.5588 reached on November 19.
Oil prices tumbled on Friday following Thursday’s decision by the Organization of the Petroleum Exporting Countries not to cut output quotas, fuelling fears over a global supply glut.
The move sparked fears over the impact of growing deflationary pressures on the global economic recovery.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set on Monday.
Elsewhere, sterling fell to one week lows against the euro on Friday, with EUR/GBP up 0.46% in late trade despite data showing that the annual rate of euro area inflation slowed to a five year low of 0.3% this month.
The weak data was seen as increasing the likelihood that the European Central Bank will implement quantitative easing measures in a bid to spur growth and stave off the threat of deflation.
In the U.K., data on Friday showed that the housing market continued to slow this month. Mortgage lender Nationwide reported that house prices rose by 0.3% after a 0.5% increase in October. That brought the annual rate of house price inflation down to 8.5% from 9.0% last month.
Earlier in the week, official data confirmed that U.K. third quarter growth was in line with the preliminary estimates released in October.
The U.K. economy grew 0.7% in the July-to-September period and expanded 3.0% on a year-over-year basis.
In the week ahead, investors will be focusing on surveys of the U.K. services, manufacturing and construction sectors, while Friday’s U.S. jobs report for November will also be closely watched.
Monday, December 1
- The U.K. is to publish its manufacturing index as well as data on net lending to individuals.
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, December 2- The U.K. is to publish a report on construction sector activity.
Wednesday, December 3- The U.K. is to release what will be a closely watched report on service sector growth.
- The
U.S. is to release the ADP report on private sector job creation, while
the ISM is to publish a report on U.S. service sector activity later in
the day.
Thursday, December 4- The U.K. is to publish private sector data on house price inflation.
- Later Thursday, the BoE is to announce its benchmark interest rate.
- The U.S. is to release the weekly report on initial jobless claims.
Friday, December 5EUR/USD weekly outlook December 1 - 5
The euro ended the day lower against the dollar on Friday after data showed that euro zone inflation slowed to five year low this month and tumbling oil prices fuelled concerns over the outlook for the global economic recovery.
EUR/USD dipped 0.11% to 1.2451 late Friday, closing in on Monday’s two year lows of 1.2359.
Eurostat reported that the annual rate of euro area inflation slowed to a five year low of 0.3% this month, down from 0.4% in October.
The report said that falling energy prices were the main factor pressuring inflation lower. Energy prices have fallen 2.5% on a year-over-year basis and look likely to continue to drop in the wake of Thursday’s decision by the Organization of the Petroleum Exporting Countries not to cut output quotas.
The move fuelled a broad based selloff in oil prices and added to fears over the impact of growing deflationary pressures on the global economic recovery.
The weak inflation data was seen as increasing the likelihood that the European Central Bank will implement quantitative easing measures in a bid to spur growth and stave off the threat of deflation.
A separate report showed that the rate of unemployment in the euro area was unchanged at 11.5% last month.
The US dollar index, which measures the greenback against a basket of six major currencies, was up 0.45% to 88.41 late Friday, not far from the four-year highs of 88.52 set on Monday.
Elsewhere, the euro gained ground against the yen and the pound, with EUR/JPY up 0.65% to 147.66 and EUR/GBP rising 0.46% to 0.7958 in late trade.
The yen has weakened broadly since the Bank of Japan unexpectedly expanded its stimulus program on October 31.
Japan’s Prime Minister Shinzo Abe dissolved parliament earlier this month, clearing the way for elections to be held on December 15 to seek a fresh mandate for his economic policies, which call for a weaker yen. The decision came after data showing that Japan’s economy unexpectedly fell into recession in the third quarter.
In the week ahead investors will be focusing on the outcome of a policy meeting of the ECB on Thursday, which is to be followed by the U.S. jobs report for November on Friday.
Monday, December 1
- In the U.S., the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, December 2- In the euro zone, Spain is to release data on the change in the number of people employed.
Wednesday, December 3- The euro zone is to release data on retail sales, the
government measure of consumer spending, which accounts for the majority
of overall economic activity.
- The U.S. is to release
the ADP report on private sector job creation, while the ISM is to
publish a report on U.S. service sector activity later in the day.
Thursday, December 4- The ECB is to announce its benchmark interest rate. The
announcement is to be followed by a press conference with President
Mario Draghi.
- The U.S. is to release the weekly report on initial jobless claims.
Friday, December 5EUR/USD Technical Analysis: Down Trend Back in Play? (based on dailyfx article)
The Euro may have resumed the down trend against the US Dollar following the appearance of a Bearish Engulfing candlestick pattern. Near-term resistance is at 1.2501, a falling trend line set from mid-October, with a break above that on a daily closing basis exposing the November 19 high at 1.2599. Alternatively, a turn below the 14.6% Fibonacci expansion at 1.2360 clears the way for a challenge of the 23.6% level at 1.2213.
USD/JPY Technical Analysis: Buyers Threaten 119.00 Anew (adapted from dailyfx article)
The US Dollar looks poised to launch another assault on the 119.00 figure against the Japanese Yen following a brief corrective pullback. Near-term resistance is in the 118.97-119.24 area, marked by the November 20 high and the 14.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 23.6% level at 120.48. Alternatively, a reversal below the 14.6% Fib retracement at 116.96 opens the door for a test of the 23.6% threshold at 115.71.
if actual > forecast (or actual data) = good for currency (for ГЫВ in our case)
[USD - ISM Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
==========
U.S. Manufacturing Index Falls Less Than Expected In November
Activity in the U.S. manufacturing sector grew at a slightly slower rate in the month of November, according to a report released by the Institute for Supply Management on Monday, although the index of activity in the sector fell by much less than anticipated.
The ISM said its purchasing managers index edged down to 58.7 in November from 59.0 in October, with a reading above 50 indicating continued growth in the manufacturing sector. Economists had expected the index to drop to a reading of 57.8.
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video December 2014
newdigital, 2014.12.02 07:01
USD/JPY Remains Overbought- Weighed by Risk for Higher JGB Yields
Risk for higher-yielding Japanese Government Bonds (JGB) may further cloud the outlook for USD/JPY especially as the December 14 snap election looms.
EUR/USD extends rejection to 200 hours MA at 1.2470 (based on fxstreet article)
The Euro extended its rejection of the 1.2500 area against the dollar an now the pair is testing its 200 hours MA level at 1.2470.
Earlier in the day, the EUR/USD rallied to test the 1.250 while reaching an intraday high of 1.2505. However, the couple found a selling interest that sent it back to to prices below 1.2500. Currently, EUR/USD is trading at 1.2475, up 0.29% on the day, having posted a daily high at 1.2508 and low at 1.2419.
The FXStreet OB/OS Index is reflecting neutral hourly conditions, while the FXStreet Trend Index is slightly bullish.
In the long term, the EUR/USD seems to be in the bearish trend as Morgan Stanley commented that "Selling EUR/USD is" their "best trade for 2015." The banks favors "selling EUR/USD, targeting 1.12 for end-2015.”
However, the story seems different in the short term as pair is trading higher on Monday. According to Pablo Piovano, "the low-1.2500s yet remains quite a tough barrier amongst EUR-bulls, although the ECB meeting on Thursday carries the potential for either a breakout of that resistance zone or a deep retracement to test recent lows in the 1.2360 region."
Below the 200-hour MA level of 1.2470, the EUR/USD will find supports at 1.2460, 1.2425 and 1.2415. To the upside, resistances are at 1.2500, 1.2520 and 1.2530.
USD/JPY Awaiting Breakout Above 119 With Bearish Patterns Lacking (based on dailyfx article)
USD/JPY has managed to regain some upward momentum after a string of Dojis suggested reluctance from the bears to lead the pair lower. With key reversal patterns lacking the prospect of a pullback is questionable. Amid a core uptrend a break of the nearby 119.00 ceiling may herald a push towards the next definitive resistance level at 119.80.
if actual > forecast (or actual data) = good for currency (for AUD in our case)
[AUD - GDP] = Change in the inflation-adjusted value of all goods and services produced by the economy. It's the broadest measure of economic activity and the primary gauge of the economy's health.
==========
Australia GDP Expands 0.3% In Q3Australia's gross domestic product gained a seasonally adjusted 0.3 percent on quarter in the third quarter of 2014, the Australian Bureau of Statistics said on Wednesday.
That was well shy of forecasts for an increase of 0.7 percent following the 0.5 percent gain in the second quarter.
On a yearly basis, GDP climbed 2.7 percent - also missing expectations for a gain of 3.1 percent, which would have been unchanged from the previous three months.
Terms of trade tumbled 3.5 percent on quarter and 8.9 percent on year, while real net disposable income sank 0.3 percent on quarter but gained 0.8 percent on year.
The main contributors to the increase in expenditure on GDP were net exports (0.8 percentage points) and final consumption expenditure (0.4 percentage points).
The main detractors were private gross fixed capital formation (-0.5 percentage points) and public gross fixed capital formation (-0.2 percentage points).
The main contributor to GDP growth was financial and insurance services (0.2 percentage points), with mining and information media and telecommunications each contributing 0.1 percentage points to the increase in GDP.