Press review - page 336

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Credit Suisse - 'run a limit order to sell EUR/USD at 1.0962, with a stop at 1.1036 and a target at 1.0745.' (based on efxnews article)


Credit Suisse is still considering the bearish breakdown for EURUSD to be going very soon from now. The key support level to be crossed for the breakdown to be started is 1.7041:

  • "This is holding for now, and we allow for a potential bounce from here. However, we look for an eventual breakdown to test trendline support, now at 1.7041. We would expect a bounce here, but beneath it can trigger a move down to 1.0660."
  • "EUR/USD has extended its decline in its broader “triangular” range to weigh on the May low and 61.8% retracement support at 1.0819."


And there is some strategy which CS proposed for us:

  • "Near-term resistance shows at 1.0962/66, above which can see a move back to 1.1035, with 1.1083/89 expected to cap."
  • "In line with this view, we run a limit order to sell EUR/USD at 1.0962, with a stop at 1.1036 and a target at 1.0745."


 

Fundamental Reasons to Sell EUR - Credit Agricole (based on efxnews article)

Credit Agricole suggested to sell for EUR just because of the following:

  1. "The EUR has been under pressure regardless of the Greek parliament voting in favour of the agreed bailout package. Even if all measures are implemented successfully it still appears questionable whether debt-sustainability can be achieved. From that angle Greece-related uncertainty is likely to continue for longer."
  2. "ECB President Draghi reiterated anew that QE will run its course regardless of stabilising growth and price developments."
  3. "In terms of data, this week’s focus will be on July PMIs."
  4. "We expect the single currency to stay subject to downside risk. This is especially true when considering that speculative positioning is close to neutral territory, which suggests limited position-squaringrelated upside risk."


From the technical point of view, the next target for EURUSD is 1.0461 after crossing 1.0818 resistance level so the fundamental expectations of  Credit Agricole are more than real ones in this situation for example.

 

Citibank - pause in the heavy EUR selling, another round of GBP strength (based on efxnews article)

EUR:

  • This is the third week Citi is celebrating the EUR has been sold aggressively by Citi’s client base:
    "Overall, this highlights that the Greek risk is not a predominant driver of positioning, but that rates and policy expectations are. With the ECB highlighting policy will remain unchanged deep into 2016, there may be a pause in the heavy EUR selling."
  • By the way, Citi is estimating some pausing in aggressive EUR bearish tendency for now.

GBP:

  • Citi is predicting an another round of GBP strength:
    "Leveraged accounts were the strong buyers of GBP in the past week, after BOE signaled earlier rate hikes were likely. However, Real Money, which has long been a GBP buyer failed to follow through."
 

EURUSD price and 100 hour MA (based on forexlive article)


'The EURUSD price and the 100 hour MA are meeting as NY traders enter for the trading day. The 100 hour MA (blue line in the chart below) is at 1.0878 and that is the high for the day. Risk can defined and limited at the level. The 22 day Average true range is 124 pips. Yesterday's range was a year tying low of 50 pips.  All of this says, look for an extension.  So although the 100 hour MA is a risk defining level and the price is currently stalling - suggesting a selling interest, it remains a finger on the button trade. That is if the price moves above the 100 hour MA.'


 

Intraday Outlooks For EUR/USD - Skandinaviska Enskilda Banken (based on efxnews article)


  • The price is ranging between 1.0830 & 1.0995 levels for the primary bearish.
  • The price will go to be out of ranging zone in case of 1.0879 support level to be broken from above to below.
  • The price is located between 21 SMA and 50 SMA, and it is going along with 50 SMA as the strong resistance level of the value of it.
  • "With fresh mid­ body support at 1.0879, near-term bulls should be inspired to at least test resistance at the lower end of the "Cloud" at 1.0994. If not stopping there a short-term descending trendline, now at 1.1105 would also deserve some attention. Current intraday stretches are located at 1.0830 & 1.0995."

The resistance level may be broken by price from below to above for the new rally, or the price will continuing with ranging between the levels.

 

EURUSD bangs on support (based on forexlive article)


"Key level for the pair being tested.The 61.8% is at 1.08688. The 100 hour MA is at 1.08746. This is the patient level for buyers outlined in an earlier post.  Getting back above the 50% at the 1.08878 will be eyed on a rebound."

 

Intraday Outlooks For EUR/USD - SEB (based on efxnews article)


EUR/USD: Ready to try the +1.10s. Yesterday's dip lower confirmed mid-body support. A move over 1.0969 would target the +1.10s. Attraction/resistance above to keep in mind in this scenario is located in the 1.0994\1.1092-area. A drop below 1.0869 would likely kill the possibility to build/add to shorts on more favorable levels. Current intraday stretches are located at 1.0845 & 1.1010.

 

Credit Agricole for EURUSD - Where To Sell (based on efxnews article)

  • "In the very short-term further position-squaring related upside risk cannot be excluded as tighter monetary conditions as driven by the Fed and intact uncertainty as related to China may keep risk sentiment unstable. Most recent China PMI releases keep investors’ growth expectations strongly muted.
  • However, from a broader angle, we expect risk sentiment to stabilize anew. This is mainly due to the notion that further improving growth prospects should ultimately compensate for rising Fed rate expectations.
  • Elsewhere, a further appreciating EUR would increase downside risks to inflation and that may trigger a more aggressive rhetoric by ECB members.
  • As a result to the above outlined conditions we remain in favour of selling EUR rallies towards 1.1100- 1200."
 

Forex Weekly Outlook July 27-31 (based on forexcrunch article)

German Business Climate, US Durable Goods Orders, GDP data from the UK, the US and Canada, US Rate decision, FOMC statement and US Unemployment Claims. These are this week’s major market movers. Here is an outlook on these events.

Last week US jobless claims continued to surprise with a 26,000 fall in the number of new claims, reaching a seasonally adjusted 255,000. This release hit the lowest level since November 1973, indicating the US labor market continues to expand with growing number of jobs and improved employment conditions. Economists expected claims to reach 279,000 this week. The positive trend in the job market together with promising housing data suggest the Fed will raise rates very soon.

  1. Eurozone German Ifo Business Climate: Monday, 8:00. German business climate index fell to 107.4 points in June from 108.5 points the prior month. The bigger than expected drop suggests that German businesses were worried about the debt crisis in Greece and its possible effect on Eurozone’s locomotive. The six month outlook measure also declined to 102 from 103.Analysts and investors were also concerned about the Greek situation. Business sentiment is expected to rise in July to 107.6.
  2. US Durable Goods Orders: Monday, 12:30. The U.S. manufacturing sector lost momentum in May, new orders for long-lasting manufactured goods declined 1.8%, to $228.9 billion after April’s revised drop of 1.0%. Economists expected a smaller decline of 0.6% in orders. However, purchases of manufactured goods, excluding the volatile transportation sector, edged up 0.5% to $157.2 billion in May, following a 0.2% decline in April, while forecasted to rise 0.6%.  Nevertheless, economists believe data is stabilizing, choosing to ignore the headline figure due to volatility in the transportation sector. Orders for long-lasting manufactured goods expected to pick up by 3.2% in June, while Core orders forecasted to rise by 0.4%.
  3. UK GDP: Tuesday, 8:30. The UK’s economic recovery softened in the first quarter of 2014 with GDP growth of 0.3%, according to a preliminary estimate. One of the weak points is the construction sector where output fell for the second consecutive quarter. According to The Office for National Statistics first quarter growth was the slowest since the fourth quarter of 2012. The annual rate of GDP growth declined to 2.4% from the 2.8% measured in the final quarter of 2014. The service sector which accounts for 75% of all goods and services in the economy, edged up 0.5% following 0.9% in the fourth quarter of 2014. The first estimate of growth for the second quarter is 0.7%.
  4. US CB Consumer Confidence: Tuesday, 14:00. Consumer confidence strengthened in June, rising to 101.4 from 94.6 in May, suggesting the recent job gain boosted economic activity. On a yearly base consumer confidence edged up 17.4% from a year ago. Current conditions and the labor market index saw the biggest rise. Continued improvement in job market conditions and bigger wages increased optimism and consumer spending. Economists expect over 2% growth in the second quarter. Consumer confidence is expected to reach 100.1 this time.
  5. US FOMC Statement: Wednesday, 18:00 The Fed’s statement from June 17 showed the economy is growing mildly after the winter plunge and is expected to increase its readiness for an interest rate hike by the end of the year. The FOMC forecasts a yearly growth of over 2%. However, Fed Chair Janet Yellen stated that the rate decision was still dependent on more decisive evidence from the labor market and stronger inflation. Economists do not forecast a rate hike just yet.
  6. US GDP: Thursday, 12:30. The advance estimate of Q1 GDP, released April 29, showed the economy expanded a mere 0.2% in the first three months of 2015, well below the 1% increase forecasted by analysts. Consumer demand rose just 1.8%, less than the 2% that was expected by economists lower than initially estimated. Exports showed negative contribution as well as foreign investments, while imports increased. Analysts forecast a rebound in the second quarter with a growth estimate of over 2%. The advance release of GDP forecast for Q2 is expected to be 2.5%.
  7. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial claims for unemployment benefits dropped last week to 255,000, the lowest level in more than 41-1/2 years. The sharp contraction in claims indicates the US labor market continued to strengthen in July. Job creation and stronger housing market suggest the Fed will raise rates in the near future. The four-week moving average of claims fell 4,000 to 278,500 last week. The number of claims is expected to reach 264,000 this week.
  8. Canadian GDP: Friday, 12:30. Canada’s economy contracted 0.1% in April, posting the fourth consecutive month of negative growth. Economists forecasted a 0.1% growth in April. The continuous contraction raises concerns that Canada will be in recession this year. Canada’s economy shrank at annual pace of 0.6% in the first quarter, and April’s decline suggests a negative reading is probable for the second quarter. The mining, oil and gas sector shrank 2.6, contracting for the sixth consecutive month. Retail sales declined 0.2%, down for the third straight month. Manufacturing declined 0.2% declining for the fourth consecutive month.  GDP is expected to remain flat in May.
 

Crédit Agricole for Week Ahead: FOMC, GDP, Durable Goods, ECI, Cons Conf (based on efxnews article)

  • "Durable goods orders are expected to rise by a sturdy 3.0% in June, boosted by a jump in non-defence aircraft orders. The bi-annual Paris air show in mid-June reported record levels of attendants and exhibitors, with over USD130bn orders announced. The strong showing was apparent in June’s Boeing aircraft orders: 161 new orders compared with 11 in May.
  • We see risk of a small slip in the July consumer confidence index to 99.0, which bounced by almost 7pt in June. That rise fully reversed the April/May weakness and pushed the index close to its post-recession high of 103.8, reached in January. A likely decline in July would primarily reflect a partial reversal from the June jump.
  • No rate hikes are expected in July. There are no updates to the Fed’s Summary of Economic Projections or a press conference following the meeting. Fed officials are looking for more evidence that economic growth is sufficiently strong and labour market conditions continue to firm enough to return inflation to the Committee’s longer-run 2% objective over the medium term. We believe that the FOMC will begin rate normalisation in September with a gradual, data-dependent pace of rate hikes thereafter.
  • We look for Q2 real GDP to grow at a 2.5% pace in the advance release following a 0.2% contraction in Q1. The Q1 stall reflected a wide range of transitory factors, in our view. While oil and dollar impacts may continue to weigh, we expect a broad-based recovery in activity in Q2. We look for consumer spending to pick up to a 2.6% rate from 2.1% in Q1, on the back on cheap gasoline prices and a stronger labour market. The deep negative contribution of net exports in Q1 (−1.9pp) is expected to turn slightly positive as trade flows recovered from the port disruptions. We expect greater residential investment in line with robust growth in housing starts, while nonresidential investment likely recovered but remained relatively weak.
  • The Q2 Employment Cost Index (ECI), a measure of total worker compensation costs, likely rose at a 0.6% pace, easing modestly from a 0.7% rate in Q1. Wages and salaries, which account for 70% of the index, are expected to rise at a slower pace, in line with the Q2 average hourly earnings growth of 0.5% on the quarter (Q1: 0.7%). We do see upside risk, however, drawing from encouraging developments in survey data.
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