Press review - page 335

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2015-07-14 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Retail Sales]
  • 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:


 

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."
Citi told that the market reaction will trump the expectation so the direction for EUR/USD will remain the same one.
 
What To Expect From Yellen? - Views From 10 Major Banks (based on efxnews article)

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."
 

AUDIO - Global Currencies with Merlin Rothfeld (based on fxstreet article)

With no guest on the show, Merlin answers many listener questions that were Power Blasted into the studio! With obvious focus on the Greek situation, Merlin starts off by answering a question about how to trade that volatile situation. Later he looks at the Canadian dollar, British Pound New Zealand pair, the Yen, and several other currencies.


 

Quant Signals For EUR/USD, USD/JPY, & Other Majors - Barclays (based on efxnews article)

The latest signals from Barclays Capital 'FX Quantitative Analyzer' model:


 

5 Reasons Why EUR/USD Shorts Are Attractive Again - BNPP (based on efxnews article)

BNP Paribas maintains short position for EURUSD from early this week from 1.1025 with 1.05 as a target, and those are 5 reasons about why this bank is considering the short for this pair:


  1. Greek outcome. "The EUR’s attempts to rally on positive Greek news proved short-lived this week. As we have long argued, a return of positive risk sentiment re-encourages markets to rebuild long risk positions funded in EUR."
  2. EUR less vulnerable. "EUR short positions now stand at -6 versus a high of -35 this year (on a -50 to 50 scale) according to BNP Paribas positioning analysis. This suggests markets have more scope to rebuild EUR shorts and should be less vulnerable to a positioning squeeze should risk sentiment deteriorate again."
  3. ECB and QE. "There were few surprises at the ECB policy meeting this week...We think the bottom line is that the ECB stands ready to counter any economic weakness or market volatility with even easier policy, which would be negative for the EUR."
  4. US rates. "There is still substantial scope for an upward adjustment in US front-end yields, which should be supported by the recent improvement in risk sentiment."
  5. Bearish for EUR/USD. "We see scope for both US nominal rates and eurozone inflation expectations to push the spread even further against EURUSD, but even at current levels it is sending a clear bearish signal for the pair."
 

Trading the News: U.S. Consumer Price Index (CPI) (based on dailyfx article)

A meaningful pickup in the U.S. Consumer Price Index (CPI) may boost the appeal of the greenback and spur fresh monthly lows in EUR/USD as it fuels speculation for a Fed rate hike in 2015.

What’s Expected:


Why Is This Event Important:

Signs of stronger price growth may encourage the Fed to adopt a more hawkish tone for monetary policy, and we may see a growing number of central bank officials show a greater willingness to remove the zero-interest rate policy (ZIRP) later this year as Chair Janet Yellen remains confident in achieving the 2% target for inflation over the policy horizon.

However, waning business confidence paired with the weakness in private-sector consumption may continue to drag on price growth, and a dismal CPI print may generate a near-term rebound in EUR/USD as it drags on interest rate expectations.

How To Trade This Event Risk

Bullish USD Trade: U.S. Headline & Core CPI Picks Up in June

  • Need to see red, five-minute candle following the release to consider a short trade on EUR/USD.
  • If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit; set reasonable limit.
Bearish USD Trade: Consumer Price Inflation Falls Short of Market Expectations
  • Need green, five-minute candle to favor a long EUR/USD trade.
  • Implement same setup as the bullish dollar trade, just in reverse.
Potential Price Targets For The Release

EURUSD Daily


  • May see a run at the May low (1.0818) as EUR/USD fails to retain the range-bound price action carried over from the previous week; even though the long-term outlook remains bearish, the euro-dollar may continue to consolidate over the near to medium-term as it retains the wedge/triangle formation from earlier this year.
  • Interim Resistance: 1.1180 (23.6% expansion) to 1.1210 (61.8% retracement)
  • Interim Support: 1.0790 (50% expansion) to 1.0800 (23.6% expansion)

MetaTrader Trading Platform Screenshots

EURUSD, M5, 2015.07.17

MetaQuotes Software Corp., MetaTrader 5

EURUSD M5: 22 pips price movement by USD - CPI news event

EURUSD, M5, 2015.07.17, MetaQuotes Software Corp., MetaTrader 5, Demo

MetaTrader Trading Platform Screenshots

USDJPY, M5, 2015.07.17

MetaQuotes Software Corp., MetaTrader 5

USDJPY M5: 19 pips price movement by USD - CPI news event

USDJPY, M5, 2015.07.17, MetaQuotes Software Corp., MetaTrader 5, Demo



 

Forex Weekly Outlook July 20-24 (based on forexcrunch article)

A Greek deal was finally reached, but it didn’t help the euro. In general, the dollar enjoyed broad gains. The upcoming week features housing figures in the US as well as important events for the antipodean currencies. Here are the highlights of this week. Here is an outlook on these main events.

An “aGreekment” was reached in the early hours of Monday with a Greek capitulation on austerity after Grexit was put on the table. We are seeing signs of a return to normality but with so much bad blood, nobody is really happy and the euro is lower. The crisis could take a break before making a comeback.  Elsewhere, the dollar saw mixed numbers, with poor retail sales weighing. However, some better numbers and with a repeat of Yellen’s intention to raise rates this year, the dollar emerged as a winner especially against commodity currencies. USD/CAD touched 1.30, AUD/USD reached new lows despite OK Chinese GDP and  NZD/USD fell below the post crisis low. The only currency that beat the dollar quite nicely is the pound, thanks to hawkish comments by Carney. What’s next? Let’s start:

  1. Glenn Stevens speaks: Wednesday, 3:05. Reserve Bank governor Glenn Stevens is scheduled to speak in Sydney. He may talk about the recent RBA’s recent decision to maintain rates at 2% as well as their intention to provide further easing measures, to boost recovery including another rate cut. Australia’s economic growth was weaker than forecast but is expected to rebound in the next two years. Stevens stated the RBA will monitor data and act accordingly. Will Stevens hit the Aussie when it’s down?
  2. Existing Home Sales: Wednesday, 14:00. Sales of existing homes, aka second hand homes are the vast majority of the market. After reaching a level of 5.35 million (annualized)  in May, another advance to 5.41 million is on the cards. The Fed watches the housing sector, which goes hand in hand with economic cycles.
  3. New Zealand rate decision: Wednesday, 21:00. New Zealand central bank cut interest rates for the first time in four years, reaching 3.25% protect the export-reliant economy from deflation risks. Despite four successive rate increases ending in July 2014 and satisfactory annual growth of 3%, the Central Bank decided to cut rates as milk prices slid more than 50% and demand from China softened. Economists expect, at least one more cut before the end of the year.
  4. US Unemployment Claims: Thursday, 12:30. The number new applications for unemployment benefits declined more than expected last week, reaching 281,000. Economists expected an addition of 274,000 claims. The 15,000 decline indicates the US labor market is strong enough to support an interest rate hike this year despite a lingering weakness in the manufacturing sector. The four-week moving average of claims increased 3,250 to 282,500 last week. The four-week measure remained below the 300,000 line for the 16th straight week. The number of claims is expected to reach 285,000 this week.
  5. Chinese Markit Flash Manufacturing PMI: Friday, 1:45. This independent measure of the Chinese economy could shed a better light on what’s going on there, after the positive GDP, which comes from the government. After a final score of 49.4 points in June, a small rise to 49.8  is expected, just below the 50 point mark separating growth from contraction.
  6. New Home Sales: Friday, 14:00. While sales of new homes are only a small part of transactions, every sale has a wider impact on infrastructure and additional spending. After hitting a high of 546K back in May, a small slide to 541K is on the cards now.
 

'EURUSD would trade down to about .9840 in August before trading back to 1.1450+' (based on dailyfx article)


W1 price is located below 200 period SMA and below 100 period SMA for the primary bearish market condition with secondary ranging between 1.0461 support level and 1.1466 resistance level:

  • The price is ranging between 1.0461 and 1.1466 levels.
  • The price broke triangle pattern from above to below together with 50.0% Fibo level at 1.0966 for the bearish breakdown to be continuing.
  • If weekly price will break 1.0461 support level so the primary bearish will be continuing, otherwise the price will be ranging within the familiar levels;
  • “The tightening range since the May high could compose a triangle within a larger advance from the March low.” A broader range does of course remain possible but with EURUSD breaking support this week, one must consider a more immediate bearish alternative. Comparisons with 1997 (pre euro trading but a calculated value is plotted) price behavior are striking.”
  • “EURUSD would trade down to about .9840 in August before trading back to 1.1450+.”
 

Morgan Stanley - Outlooks For The Coming Week (based on efxnews article)

EUR: Bearish

  • Weekly price is on primary bearish market condition located below Ichimoku cloud for trying to break key support level for the bearish to be continuing.
  • Price is located below 100 SMA and below 200 SMA for the primary bearish.
  • The data of AbsoluteStrength indicator and Trend Strength indicator are in contradiction with each other for ranging market condition
  • "With uncertainty regarding Greece diminished, we believe that investors will feel more comfortable reinitiating EUR shorts, as evidenced by the latest break in EURUSD below the 100 DMA. Draghi has reiterated that the ECB stands ready to act if needed, which could be enough to weigh on EUR, particularly if it supports equities, given the inverse relationship between European stocks and EUR."


JPY: Bullish

  • Weekly price is located far above Ichimoku cloud for the primary bullish market condition to be continuing.
  • Price is located above 100 SMA and above 200 SMA for the bullish trend.
  • The values of Absolute Strength indicator are estimating the secondary ranging which is going between 119.25 support and 125.85 resistance levels.
  • "We expect JPY weakness to reverse, and maintain our bullish view, despite the recent pick-up in equity markets. Recent data from Japanese pension funds point to the reallocation process being largely complete, suggesting that foreign outflows from Japan could slow."


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