Press review - page 343

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Experts react to Black Monday (based on telegraph.co.uk article)

Markets now believe Federal Reserve won't rise rates until 2016, and this is what experts are talking about:

Economists at Barclays - expectation of a Fed rate rise to the first half of next year: "Given the uncertainty around the current global outlook, the timing of the rate hike seems more uncertain than usual. Should this episode of financial market volatility prove transitory, the FOMC could raise rates in December. On the other hand, if the volatility proves durable or reveals greater than expected weakness in global activity, the FOMC may push the first rate hike beyond March."

Economists at Capital Economics - September rate hike: "There are no signs of any major downturn in the US economy, economic growth in China still appears to slowing rather than collapsing and emerging markets are not about to endure a repeat of the 1997/98 Asian crisis. The current bout of market turmoil, if it continues, might persuade the Fed to hold off on raising interest rates in September. Since that volatility doesn’t reflect any genuine economic slump, however, we wouldn’t be surprised if it proved short-lived leaving the way open for the Fed to begin raising rates at some point this year."

The International Monetary Fund (IMF) - delay raising rates until 2016: "The FOMC should defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident. Based on staff’s macroeconomic forecast, and barring upside surprises to growth and inflation, this would imply a gradual path of policy rate increases starting in the first half of 2016."
 

United Overseas Bank believes in bullish on EUR/USD within 1-3 weeks (based on efxnews article)

United Overseas Bank (UOB) maintains a bullish forecast for EUR/USD within the next 3 weeks. United Overseas Bank previously known as United Chinese Bank or UCB and headquartered in Singapore is a financial int'l holding company. UOB was founded in 1935 and having the branches in most South-East Asian countries. The UOB Group estimated for EUR/USD to break 1.1710/1.1715 in the near future:

  • "The low of 1.1395/00 yesterday held just above our 1.1360 stop-loss. Despite the sharp rebound from the low, the recent strong momentum has been dented and this pair is likely in a short-term consolidation phase that may last for a few days."
  • "As long as 1.1360 is not taken out, a break above the 1.1710/15 high on Monday cannot be ruled out even though the odds for such a move appears to be quite low at this stage."


On the daily basis, UOB Group evalute the EUR/USD to be in ranging market condition within 1.1425/1.1580.

 

EUR/USD: Topped Or Not (based on efxnews article)

  • Morgan Stanley: "EUR/USD has not topped yet."
  • SocGen: "If sustained above the triangle limit of 1.1385/70, the recovery should be persistent."
  • Barclays: "We are neutral given stretched daily studies and look for signs of a top to re-establish our overall bearish view. We would only buy on a break above 1.1710 for a short-term upside squeeze towards the 1.1810/75 area. From there we would look for signs of a top to move lower in range."
 

AUDIO - Follow the Money with Alex Perna (based on fxstreet article)

Another waved of selling pummeled the markets today, causing several currencies to rally in to strong supply and demand zones. Online Trading Academy instructor, Alex Perna joins Merlin to talk about his evolution as a trader and share some of his bigger learning lessons. Alex and Merlin look at the weakness in the Dollar and opportunities in other currencies like the Pound, Yen, Canadian dollar, and much more!


 

Trading News Events: U.S. Gross Domestic Product (based on dailyfx article)

An upward revision in the 2Q U.S. Gross Domestic Product (GDP) report may boost the appeal of the greenback and spark a larger pullback in EUR/USD as it fuels speculation for a September Fed rate hike.

What’s Expected:


Why Is This Event Important:

The Fed may stay on course to normalize monetary policy in 2015 as the central bank still anticipates a stronger recovery to materialize over the coming months, and data prints encouraging an improved outlook for growth & inflation may spur a greater dissent within the committee as the economy gets on a more sustainable path.

However, easing job growth paired with the slowdown in building activity may drag on growth rate, and signs of a slower recovery may spur a further delay of the Fed’s normalization cycle as the central bank struggles to achieve the 2% target for inflation.

How To Trade This Event Risk

Bullish USD Trade: Growth Rate Expands Annualized 3.2% or Greater

  • Need to see red, five-minute candle following the GDP report to consider a short trade on EURUSD.
  • If market reaction favors a long dollar trade, sell EURUSD 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: 2Q GDP Report Falls Short of Market Expectations
  • Need green, five-minute candle to favor a long EURUSD trade.
  • Implement same setup as the bullish dollar trade, just in reverse.
Potential Price Targets For The Release
EURUSD Daily



  • Near-term breakout in EUR/USD keeps the focus on the topside targets as the RSI retains the bullish momentum; will retail a constructive view along as the pair holds above former-resistance around 1.1180 (23.6% retracement) to 1.1210 (61.8% retracement).
  • Interim Resistance: 1.1760 (61.8% retracement) to 1.1810 (38.2% retracement)
  • Interim Support: Interim Support: 1.0790 (50% expansion) to 1.0800 (23.6% expansion)

1Q 2015 U.S. Gross Domestic Product (GDP)

EURUSD M5: 42 pips range price movement by USD - GDP news event:


 

Trade Ideas For EUR/USD (based on efxnews article)


EUR/USD: "Liquidity is very poor, although yesterday was slightly better than earlier in the week. Play the intraday moves, and expect sellers to come in on every move close to yesterday's break of 1.1466. Buyers will be lined up ahead of 1.1200."

 
Sergey Golubev:

Trading News Events: U.S. Gross Domestic Product (based on dailyfx article)

An upward revision in the 2Q U.S. Gross Domestic Product (GDP) report may boost the appeal of the greenback and spark a larger pullback in EUR/USD as it fuels speculation for a September Fed rate hike.

What’s Expected:


Why Is This Event Important:

The Fed may stay on course to normalize monetary policy in 2015 as the central bank still anticipates a stronger recovery to materialize over the coming months, and data prints encouraging an improved outlook for growth & inflation may spur a greater dissent within the committee as the economy gets on a more sustainable path.

However, easing job growth paired with the slowdown in building activity may drag on growth rate, and signs of a slower recovery may spur a further delay of the Fed’s normalization cycle as the central bank struggles to achieve the 2% target for inflation.

How To Trade This Event Risk

Bullish USD Trade: Growth Rate Expands Annualized 3.2% or Greater

  • Need to see red, five-minute candle following the GDP report to consider a short trade on EURUSD.
  • If market reaction favors a long dollar trade, sell EURUSD 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: 2Q GDP Report Falls Short of Market Expectations
  • Need green, five-minute candle to favor a long EURUSD trade.
  • Implement same setup as the bullish dollar trade, just in reverse.
Potential Price Targets For The Release
EURUSD Daily



  • Near-term breakout in EUR/USD keeps the focus on the topside targets as the RSI retains the bullish momentum; will retail a constructive view along as the pair holds above former-resistance around 1.1180 (23.6% retracement) to 1.1210 (61.8% retracement).
  • Interim Resistance: 1.1760 (61.8% retracement) to 1.1810 (38.2% retracement)
  • Interim Support: Interim Support: 1.0790 (50% expansion) to 1.0800 (23.6% expansion)

1Q 2015 U.S. Gross Domestic Product (GDP)

EURUSD M5: 42 pips range price movement by USD - GDP news event:


 

EUR/USD: Is A Break Of 1.12 On The Cards Today? (based on efxnews article)


UOB Group made a technical analysis for today:

EUR/USD - Neutral: "Pull-back has room to extend towards the next support at 1.1105. While we expected a pull-back, the pace has been more rapid than anticipated. The current EUR weakness appears incomplete and could extend towards the next support 1.1105."

 

Forex Weekly Outlook Aug 31-Sep 4 (based on forexcrunch article)

Markets did not go on an August vacation in a week that saw extreme volatility. The US dollar emerged as a big winner but it wasn’t always this way. A very busy week awaits us: rate decisions in Australia and the Eurozone, GDP data from Canada and Australia, and a full buildup to the the all-important Non-Farm Payrolls in the US. These are the major market movers for this week. Join us as we explore these top events on our weekly outlook.

Turmoil in global financial markets increased speculations that the Federal Reserve may delay the widely anticipated September rate hike. Concerns over global growth, the plunge in commodity prices, China’s frenzied stock markets and its recent currency devaluation suggested a possible change in the Fed’s timetable. Nevertheless, US economic data remained positive with a sharp upward revision in the growth forecasts for Q2, reaching 3.7% compared to 2.3% expansion estimated earlier. Furthermore, Durable Goods Orders registered solid gains rising 2% while core orders increased 0.6%, well above forecasts, indicating rising domestic demand and further expansion in the third quarter.  The yen and the euro enjoyed the trouble but this changed, especially for the euro. Also the ECB could react, not only the Fed.

  1. Australian rate decision: Tuesday, 4:30. The Reserve Bank of Australia kept the cash rate on hold at 2%. The RBA governor Glenn Stevens reiterated that currency must be devalued although it moved closer to the bank’s destination. Solid gains in retail sales and consumer spending, released after the rate meeting, confirmed the upbeat tone in the RBA’s report. However, rising prices in the housing market continue to concern policy makers. The RBA is expected to maintain rates at 2% this time. Nevertheless, there is an outside chance of action right now, to mitigate the Chinese slowdown and mitigate the fall in expenditure.
  2. Canadian GDP: Tuesday, 12:30. Canada’s economy contracted 0.2% in May, marking the fifth consecutive month of decline led by a surprise drop in manufacturing. The Bank of Canada estimated GDP would decline 0.5% in the second quarter, after falling 0.6% in the first three months. Policymakers hope a softer Canadian dollar and lower interest rates will boost economic activity in the second half of 2015. US demand weakened in the first quarter while the oil price crush affected the energy sector. However, economists believe a solid GDP gain in June. Canadian economy is expected to grow by 0.3% in June.
  3. US ISM Manufacturing PMI: Tuesday, 14:00. Manufacturing PMI, according to the ISM report, showed a lower than expected reading of 52.7, following 53.5 in June. The release was above the 50-point line indicating expansion, indicating the manufacturing sector is still growing. The employment component declined to 52.7 from 55.5. New orders inched up to 56.5 from 56.0. Production jumped to 56.0 from 54.0. Economists expect Manufacturing PMI  to reach 52.8 this time.
  4. Australian GDP: Wednesday, 1:30. The Australian economy boosted its activity in the first quarter, posting the best quarterly growth in 15 years. The 0.9% increase was preceded by a 0.5% gain in the last three months of 2014. The main factors for expansion were exports, domestic spending and the construction sector. The economy over went major changes, shifting from mining activities to tourism, education and professional services. Policymakers tried to find ways to compensate for the loss of massive funding formerly invested in the mining sector. The better than expected GDP release raises hopes for an ongoing recovery. Australian economy is expected to grow by 0.4% in the second quarter.
  5. US ADP Non-Farm Payrolls: Wednesday, 12:30. The U.S. private sector added 185,000 workers in July, posting the smallest increase since April, following 237,000 jobs addition posted in the prior month. Economists expected a stronger gain of 216,000 in July. Job growth remained strong, but moderated since the beginning of the year. The main factors for the slowdown were layoffs in the energy industry and weaker job gains in manufacturing. US job market is expected to add 205,000 new positions in August.
  6. Eurozone rate decision: Thursday, 11:45, press conference at 12:30. The ECB is not expected to change policy right now: interest rates have reached their “lower bound” according to the Bank and QE is achieving some results in monetary easing and indirectly a weaker euro. However, the recent market turbulence has already sparked a comment hinting about further stimulus. Will the ECB announce an acceleration of its QE program beyond 60 billion euros / month or its time frame beyond September 2016? This could officially help the economies and basically serve as a participation of the ECB in currency wars. A rise in the euro is undesired as the recovery is fragile. A change in policy is not expected, but President Mario Draghi could hint about the potential to act, putting his weight on the euro.
  7. US Trade Balance: Thursday, 12:30. The U.S. trade deficit widened in June from $40.9 billion in May to $43.8 billion in June, amid solid consumer spending boosting imports, while exports contracted due to the strong dollar. Imports edged up 1.2% to $232.4 billion, while exports declined to $188.6 billion from $188.7 billion. The strong dollar weighed on manufacturers, making their products more expensive overseas. The U.S. trade deficit  is expected to grow further to 44.5 billion.
  8. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial jobless claims declined by 6,000 last week to 271,000. The reading was broadly in line with market forecast. The four-week moving average of initial claims inched up to 273,000 from 272,000. Continuing claims rose to 2.269 million from an upwardly revised reading of 2.256 million. The steady jobs data readings suggest the US labor market is continuing to improve. The number of new jobless claims is expected to reach 273,000 this week.
  9. US ISM Non-Manufacturing PMI: Thursday, 14:00. July’s ISM non-manufacturing index posted the highest reading in 10 years, reaching 60.3 after a 56.0 reading in June. Economists expected a lower figure of 56.3. New orders edged up to 63.8, and backlog orders showed 54.0, indicating substantial acceleration from June. Export orders also increased considerably despite the strong dollar. ISM non-manufacturing index is expected to reach in August 58.3.
  10. FOMC member Jeffrey Lacker speaks: Friday, 12:10. Federal Reserve Bank of Richmond President Jeffrey Lacker is scheduled to speak in Richmond. Mr. Lacker voiced his support for raising short-term interest rates sooner rather than later. Lacker’s speech will follow the August jobs report release from the Labor Department, a vital info before the Fed’s policy meeting. Market volatility is expected especially in the light of dovish comments from the Fed.
  11. Canadian employment data: Friday, 12:30. Canada’s employers added 6,600 jobs in July, rebounding after a similar decline in June. However, the jobs addition did not alter the unemployment rate, which remained stuck at 6.8%. Economic data released in the first quarter indicates the economy shrank, but the jobs report shows a more complicated picture.11,000 jobs were added in the last six months despite the major downturn in the oil and gas sector. However, the majority of the 7000 positions added in July were part time. Canada’s labor market is expected to cut 2,500 jobs while the unemployment rate is forecasted to remain unchanged at, 6.8%.
  12. US Non-Farm Payrolls: Friday, 12:30. U.S. Nonfarm payrolls registered another solid gain in July adding 215,000 jobs after a 223,000 increase in June. The unemployment rate remained steady at a seven-year low of 5.3%. The Fed has upgraded its assessment of the labor market, describing it as continuing to “improve, with solid job gains and declining unemployment. Average hourly earnings increased five cents, or 0.2%, after being flat in June, but is much lower than the 3.5% growth rate economists associate with full employment. August’s new jobs addition is expected to be 220,000 while the unemployment rate is forecasted to decline to 5.2%.
 

EUR/USD Forecast Aug. 31 – Sep. 4 (based on forexcrunch article)

Roller coaster does not begin to describe the week that EUR/USD underwent. A leap to highs unseen in months continued with big fall. Volatility is set to continue as traders return to their desks and the ECB makes its statement. Apart from Draghi we also have employment, inflation and PMI data. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

The fear that gripped markets continued helping the euro. The common currency has become a funding one and that was clear with the leap above 1.17. However, this didn’t last too long: not only the Fed can be more dovish but also the ECB. A hint about monetary stimulus and a rebound in atmosphere and stocks sent the pair down. Also a better than expected GDP read from the US helped the dollar regain its strength. In the euro-zone, the solid German business sentiment helped the euro early in the week while other figures did not surprise.

  1. German Retail Sales: Monday, 6:00. Consumer activity at the euro-zone’s core country disappointed with a big fall of 2.3% in June. German demand is critical for the whole area. A rebound is on the cards now.
  2. Flash CPI: Monday, 9:00. These figures are critical for the ECB decision later on. In July, inflation remained low at 0.2% y/y while core inflation was initially set at 1% before the final read of 0.9%. This data was somewhat encouraging for the ECB: low oil prices still impact headline inflation while underlying demand that effects core prices is better. In August, we had the big crash in oil and that could weigh on headline inflation. However, expectations stand on +0.2% for the headline number and 1% on core inflation.
  3. Manufacturing PMIs: Tuesday morning: 7:15 for Spain, 7:45 for Italy, 7:50 for France (final), 7:55 for Germany and the final euro-zone read at 8:00. According to Markit, Spain, the zone’s 4th largest economy, has seen OK growth in July, with a score of 53.6 points. A rise to 53.9 is on the cards now. Italy, the third largest economy, enjoyed stronger growth at 55.3 and another advance to 56.2 is expected. France remained in contraction territory in August according to the preliminary read: a score of 48.6 which is below the 50 point mark separating growth and contraction. Germany countered that with 53.2 and the overall score stood at 52.4 points. The last 3 numbers will likely be confirmed.
  4. German employment change: Tuesday, 7:55. In June, the area’s locomotive disappointed with a rise in unemployment: 9000 were added to the unemployment lines. The country enjoyed improving conditions for many months. Has the tide turned? At least for now, a drop of 5K is predicted, making the rise last time a one off, if this forecast is realized.
  5. Unemployment rate: Tuesday, 9:00. While the jobless rate is below the highs, it is still quite troubling at 11.1% in June, refusing to drop. The economic growth is not really reflected in jobs. No change is expected.
  6. Spanish Unemployment Change: Wednesday, 7:00. Spain still suffers an unemployment rate of over 20% but the situation has improved. The early release of employment figures draws attention despite its seasonality. After a fall of 74K unemployment in July a similar number is on the cards for August.
  7. PPI: Wednesday, 9:00. Producer prices eventually feed into consumer prices. A slide of 0.1% was seen in June and a bigger one is on the cards for July, mostly due to commodity prices. A drop of 0.1% m/m is forecast.
  8. Services PMIs: Thursday morning: 7:15 for Spain, 7:45 for Italy, 7:50 for France (final), 7:55 for Germany and the final euro-zone read at 8:00. The services sector is doing better than the manufacturing one, and this is most evident in Spain, which enjoyed a strong growth rate according to Markit, with a score of 59.7 points in July. A similar number of 59.3 is expected. Italy has seen weak growth with 52 points in July and an advance to 53.1 points is likely. The preliminary read for August showed growth in France with 51.8 points and an even better one in Germany with 53.6 points. The whole euro-zone scored a healthy growth rate of 54.2 points. The last three numbers will likely be confirmed.
  9. Retail sales: Thursday, 9:00. Consumers in the euro-zone bought less in June with a drop of 0.9%, led mostly by Germany. Despite being released after the German figure, this publication still has a significant impact. A rise of 0.6% is expected.
  10. ECB decision: Thursday, 11:45, press conference at 12:30. The ECB is not expected to change policy right now: interest rates have reached their “lower bound” according to the Bank and QE is achieving some results in monetary easing and indirectly a weaker euro. However, the recent market turbulence has already sparked a comment hinting about further stimulus. Will the ECB announce an acceleration of its QE program beyond 60 billion euros / month or its time frame beyond September 2016? This could officially help the economies and basically serve as a participation of the ECB in currency wars. A rise in the euro is undesired as the recovery is fragile. A change in policy is not expected, but President Mario Draghi could hint about the potential to act, putting his weight on the euro.
  11. German Factory Orders: Friday, 6:00. This volatile indicator enjoyed a surprisingly strong rise of 2% in June and could cool down now with a drop of 0.5%.
  12. Retail PMI: Friday, 8:10. After long months below the 50 point mark, this indicator of consumption climbed to growth territory in May and reached 54.2 points in July. Is the momentum still with us? We may see a slide now.
  13. Revised GDP: Friday, 9:00. According to the preliminary figure, the euro-zone economies grew by 0.3% in Q2. This was slightly worse than predicted. No revision is expected now.
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