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Forex Weekly Outlook Nov. 9-13 (based on forexcrunch article)

The US dollar surged across the board as a December rate hike looks very real. Employment data from the UK and Australia, speeches from Mark Carney and Mario Draghi, German GDP data , US Retail sales stand out. These are the main events on forex calendar.

The US Non-Farm Payrolls report for October showed strong growth with a 271,000 payrolls increase following two straight months of lukewarm gains. The unemployment rate declined to a 7-1/2-year low of 5.0%, demonstrating domestic strength. This robust reading may signal the well-awaited rate hike announcement in the Fed’s next meeting in December which was also evident in recent Fed talk. Another encouraging piece of news is the wage gains and robust consumer spending, showing an upbeat picture of the economy on the verge of the fourth quarter.

  1. UK Employment data: Wednesday, 9:30. The U.K. labor market continued to improve in the third quarter, posting the lowest unemployment rate since the second quarter in 2008. The unemployment rate stood at 5.4% compared to 5.5% in the three months to July. Wages including bonuses grew 3% indicating a growth trend in the UK economy. However, the number of jobless claims increased 4,600 in September, missing forecasts for a 2,300 contraction. The number pf jobless claims is expected to rise by1,600 this time.
  2. Mark Carney speaks: Wednesday, 10:30. BOE Governor Mark Carney will speak in London about theInflation Report released last week. Following the statement Carney suggested interest rates would stay lower for a longer period, hinted they would rise in about two years. He said global growth has weakened since the previous inflation report which could weigh on UK growth. As to inflation forecast, the bank downgraded its growth outlook slightly, to around 2.7% for 2015 from 2.8% in the last report. Mr Carney stated that if rates did not rise until the first half of 2017, inflation is predicted to overshoot its 2% target.
  3. Mario Draghi speaks: Wednesday, 13:15. ECB President Mario Draghi is due to speak in London. He may provide further information regarding his recent declaration that the ECB is prepared to cut interest rates and step up quantitative easing prevent a renewed economic slump in the Eurozone. Draghi stated that the ECB policymakers would not be in “wait and see” mode, but rather “wait and assess” mode, between now and their policy meeting on 3 December.
  4. Australian Employment data: Thursday, 0:30. Australia’s employment market contracted 5,100 jobs in September missing forecasts for a 5,000 rise. 13,900 full-time workers were dismissed, while 8,900 part-time jobs were added. The participation rate, fell to 64.9% from 65.0% in August. However, the jobless rate remained steady at 6.2%. Economists expect jobs growth may slow due to soft economic conditions and the jobs growth from the labor services sector will weaken amid less support from housing activity and lower currency. Australia’s labor market is expected add 15,200 jobs while the unemployment rate is predicted to remain at 6.2%.
  5. US Unemployment Claims: Thursday, 13:30. US jobless claims were weaker than expected last week, reaching 276,000 after posting 260,000 in the prior week. Analysts expected the number of claims would come to 263,000. However, the number of claims remain low from historical perspective showing solid labor market conditions with previous and continuing unemployment claims, which are around decade’s lows.
  6. German GDP: Friday, 7:00. Germany’s economy expanded 0.4% in the second quarter according to August estimates. Exports climbed 2.2% in the three months through June. Private consumption advanced 0.2%, while capital investment contracted 0.4%. Germany faces downturn risks in exports due to the weakness in China, Germany’s third-biggest trading partner. Nevertheless, German manufacturing sector continued to grow and consumer spending remained strong amid record-low unemployment and borrowing costs. Economists expect GDP to grow by 0.3% in the third quarter.
  7. US Retail sales: Friday, 13:30. U.S. retail sales registered weak performance in September, rising 0.1%, while expected to gain 0.2%. Excluding autos, core retail sales declined 0.3%. Sales of motor vehicles and auto parts edged up by 1.7%. Gasoline sales, meanwhile, declined 3.2%. Consumer spending is the largest contributor to the U.S. gross domestic product. Weaker consumption means a hit to GDP growth. Retail sales are expected to gain 0.3% in October and Core sales are expected to rise by 0.4%.
  8. US PPI: Friday, 13:30. U.S. producer prices plunged in September to their lowest level in eight months amid a decline in prices of energy products. Producer price index fell 0.5%, after being unchanged in August. In the 12 months through September, the PPI dropped 1.1% after declining 0.8% in August. Weak inflation one of the key reasons for the Fed’s reluctance to raise interest rates. Producer prices are expected to grow by 0.1%  this time.
  9. US UoM Consumer Sentiment: Friday, 15:00. U.S. consumer sentiment rebounded sharply in October, indicating that the economic recovery remained positive despite headwinds from a strong dollar and weak global demand weighing on the industrial and the manufacturing sectors. The University of Michigan consumer sentiment index edged up to 92.1 from 87.2 in September. Analysts expected a lower reading of 88.8. It is a hopeful sign on the outlook for consumer spending. U.S. consumer moral is expected to reach 91.2 in November.
 

USD, EUR, GBP, CAD, AUD: Outlooks For The Week - Morgan Stanley (based on efxnews article)

EUR: Bearish
"We have revised our EUR forecasts lower and now look for 1.06 at year end. Our economists now expect another 10 bp cut in the deposit rate, an addition to QE, and an extension of the asset purchase programme. All of this should be EUR negative. We believe the deposit rate cut is likely to be the most currency negative, as it should incentivize foreign investors to fund in EUR and domestic investors to seek returns overseas."



USD: Bullish
"We believe USD could start to see inflows related to investment, rather than repatriation of assets. While the latter does not require tighter Fed policy, the former will benefit from a higher probability of Fed hikes. Indeed, this is likely to support US assets and boost USD."



GBP: Bearish
"Markets have taken the BoE dovishly as they revised CPI forecasts and started to get concerned about the impact of EM growth on the UK economy. On top of this, there is a downside risk to near-term inflation as the strong trade-weighted GBP (ERI) puts downward pressure on import prices. The focus is now on EM data again and its impact on commodity prices and general market volatility as GBP remains sensitive to all of these factors."


 

The Royal Bank of Scotland made a forecast for EUR/USD telling that "The cleanest way to play is still short EUR/USD." (based on article). So, let's made very short review of intra-day situation for this pair.

The price (H4 timeframe) is on bearish market condition located below 100 period SMA and 200 period SMA on the bearish area of the chart. Price is ranging within the following key support/resistance levels:

  • 1.0704 key support level, and
  • 1.0884 key resistance level.


  • If the price will break 1.0704 support from above to below on close bar so the bearish trend will be continuing.
  • if the price will break 1.0884 resistance level from below to above so we may see the bear market rally to be started.
  • If not so the price will be moved within the levels.

Thus, The Royal Bank of Scotland is correct one concerning the trend: this is bearish anyway in intra-day basis for the pair.

 

Technical Overview: Will EUR/USD Break 1.0461 Support? (adapted from article)

BNP Paribas updated their forecast related to the EUR/USD price movement in long-term situation - they told the following: "we are somewhat sceptical on the EURUSD’s ability to test and break the previous 2015 low of around 1.0460." Well ... let's evaluate this forecasting situation with technical point of view.

Ichimoku analysis.
Weekly price is on bearish market condition for the crossing key support level at 1.0704 from above to below for the bearish trend to be continuing. This is bearish breakdown which is going on for right now: Chinkou Span line crossed the price to below for the bearish breakdown to be continuing. And the nearest bearish target is 1.0461. So, there are 2 scenarios concerning the price movement in long-term situation:

  • the price is ranging within 1.0461 support and 1.1713 resistance levels, or
  • the price is breaking 1.0461 support level from above to below on the close bar for example.



Pivot Points.
The price is breaking S2 YR1 Pivot at 1.0672 from above to below with 1.0461 as the next target. And there are two similar scenarios for the price movement related to Pivot Points:

  • the price is ranging within 1.0461 support and S1 Pivot at 1.1337, or
  • the price is breaking S2 Pivot at 1.0672 from above to below on the close bar.

The Strategy: watch the price to break 1.0672with possible sell trade with 1.0461 as a target.


InstrumentS2 Pivot
S1 Pivot
Yearly PP
R1 Pivot
EUR/USD
 1.0672
1.1337
 1.2665
 1.3329
 

Intraday Outlooks For EUR/USD - SEB (adapted from efxnews article)

Skandinaviska Enskilda Banken made a technical forecast for telling that EUR/USD will go as high as 1.08 before 1.0655 support level will be broken by the price from above to below. As we see from the chart below - the price is on bearish market condition for the ranging between the following key support/resistance levels:

  • Fibo support level at 1.0674 located far below 100 day SMA (100 SMA) and 200 day SMA (200 SMA) in the primary bearish area of the chart, and
  • 50.0% Fibo resistance level at 1.1082 located near 100 SMA/200 SMA on the border between the primary bearish and the primary bullish on the chart.


Descending triangle pattern was formed by the price with 1.0707 support level to be broken for the bearish trend to be continuing up to 1.0674 as the nearest bearish target.

The Strategy: watch W1 price to break 1.0707 support level for possible sell trade with 1.0674 as the target.

 

Technical Outlooks For USD/JPY - SEB (adapted from efxnews article)

Skandinaviska Enskilda Banken made a technical forecast for USD/JPY for telling the following: 'below 122.65/45 would target 121.60'. It means that SEB is predicting the price to be bounced from Fibo resistance level at 123.63 with 23.6% Fibo target at 121.86.

Anyway, there are the following scenarios for the price movement concerning the key support/resistance levels:

  • If Fibo resistance level at 123.63 will be broken by the price from below to above so the bullish trend will be continuing up to 125.85 as the next bullish target in this case.
  • If 118.05 key support level will be broken by the price from above to below so the secondary correction within the primary bullish trend will be started.
  • If Fibo support level at 116.13 will be broken from above to below so the reversal breakdown may be started for this pair.


The Strategy. Watch the price to break 123.63 resistance level for possible buy trade with below 125.85 as the target.

 

EURUSD Long-Term Outlook - bearish ranging near S2 Pivot level (adapted from the article)

Credit Suisse made a forecast for EUR/USD for 2016 estimated 1.00 as the first target and 0.85 as the second one. Let's evaluate this forecast with the technical point of view.

EUR/USD: bearish ranging near S2 Pivot level. This pair is on bearish market condition for the ranging within S1 Pivot at 1.1337 and S2 Pivot at 1.0672: the price is on bearish breakdown for now with 1.0672 level crossing from above to below for 0.9599 as the next bearish target.


  • if the price breaks S2 Pivot at 1.0672 from above to below so the bearish trend will be continuing up to 0.9599 as the next bearish target;
  • if the price breaks 0.9599 support level from above to below so we may see the bearish breakdown with S3 Pivot at 0.9344 as the target;
  • if the price breaks S1 Pivot at 1.1337 from below to above so we may see the local uptrend as the secondary market rally within the primary bearish market condition;
  • if not so the price will be moved within the channel.
InstrumentS3 Pivot
S2 Pivot
S1 Pivot
Yearly PP
R1 Pivot
EUR/USD
 0.9344
1.0672
1.1337 1.2665 1.3329
 
Alain Verleyen:
Interesting fundamentals analysis.Read whole article.

Where i can see conditions?

 
Sergey Golubev:

EURUSD Long-Term Outlook - bearish ranging near S2 Pivot level (adapted from the article)

Credit Suisse made a forecast for EUR/USD for 2016 estimated 1.00 as the first target and 0.85 as the second one. Let's evaluate this forecast with the technical point of view.

EUR/USD: bearish ranging near S2 Pivot level. This pair is on bearish market condition for the ranging within S1 Pivot at 1.1337 and S2 Pivot at 1.0672: the price is on bearish breakdown for now with 1.0672 level crossing from above to below for 0.9599 as the next bearish target.


  • if the price breaks S2 Pivot at 1.0672 from above to below so the bearish trend will be continuing up to 0.9599 as the next bearish target;
  • if the price breaks 0.9599 support level from above to below so we may see the bearish breakdown with S3 Pivot at 0.9344 as the target;
  • if the price breaks S1 Pivot at 1.1337 from below to above so we may see the local uptrend as the secondary market rally within the primary bearish market condition;
  • if not so the price will be moved within the channel.
InstrumentS3 Pivot
S2 Pivot
S1 Pivot
Yearly PP
R1 Pivot
EUR/USD
 0.9344
1.0672
1.1337 1.2665 1.3329
You are doing a brilliant working here thanks for analysis and helping to beginners :)
 

Forex Weekly Outlook November 16-20 (based on the article)

The US dollar had a mixed week after the NFP. Japan GDP data, Inflation data from the UK, the US and Canada and a rate decision in Japan stand out. These are the main events on forex calendar. Here is an outlook on the market-movers for this week.

A long list of Fed speakers basically left expectations for a Fed hike unchanged, thus leaning towards a move in December. Yellen remained silent. In the euro-zone. Data was mixed, with a disappointment in retail sales but upbeat consumer confidence also a positive JOLTs report, Draghi reiterated his desire to act in December: provide more easing. In Australia, the jobs report was excellent and falling oil prices weighed on the Canadian dollar.

  1. Japan GDP data: Sunday 23:50. Japan’s economy contracted 0.4% in the second quarter, when Gross domestic product declined by an annualized 1.6% between April to June. The contraction was less than expected, but consumer spending and investments weakened. Many economists believe inflation will not reach the 2% target by summer 2016 expecting further monetary easing in the coming months. GDP is expected to remain negative at -0.1%.
  2. Mario Draghi speaks: Monday. 10:15 and Friday, 8:00. ECB President Mario Draghi will give speeches in Madrid and in Frankfurt. During his talk before the European Parliament last week, Draghi dropped another hint that the ECB is preparing further monetary easing measures to boost the Eurozone’s recovery. The ECB president admitted that the 2% inflation target will take longer to achieve and that the central bank will re-examine a QE program in early December. Market volatility is expected.
  3. UK inflation data: Tuesday, 9:30. UK Consumer Prices fell to -0.1% in September hovering close to zero for most of this year. Food prices declined by 2.5% in the year amid ongoing supermarket price wars. According to the low CPI release, the Bank is in no hurry to raise rates anytime soon. Furthermore, core CPI also remained weak at 1.0% suggesting no underlying inflationary pressures despite continuing strength in wage growth. Consumer prices are expected to remain at -0.1%.
  4. German ZEW Economic Sentiment: Tuesday, 10:00 German analysts and investors sentimentplunged in October to 1.9 points, following 12.1 in September amid the scandal at Volkswagen and the weakness in emerging markets. Analysts expected a reading of 6.8. Current conditions declined to 55.2 points from 67.5 points in September, below expectations for a drop to 64.7. German economic sentiment is expected to reach 6.7% this time.
  5. US inflation data: Tuesday, 13:30.  Consumer prices in the U.S. declined 0.2% in September while Core CPI excluding the volatile food and energy sectors gained 0.2%. Analysts expected CPI to drop 0.2% and Core CPI was predicted to rise by 0.1%. Despite the fall in headline inflation, core prices edged up 1.9% in the past 12-months, from 1.8% the prior month getting closer to a December rate hike call. The energy index plunged 4.7% in September. A continued decline in the gasoline index, this time by 9%, was the main cause in the decline for overall CPI. Both CPI and Core CPI are forecasted to rise 0.2% in October.
  6. US Building Permits: Wednesday, 13:30. Building permits declined 5% to a 1.1 million pace in September the lowest number since March. Meanwhile, applications for single-family projects declined 0.3% to a 697,000 unit pace; indicating this component will come to a standstill in the coming months. However, housing starts were encouraging consistent with the builders increasing confidence in the outlook for their industry. The number of permits is expected to reach a unit pace of 1.15 million in October
  7. US FOMC Meeting Minutes: Wednesday, 19:00. In the Fed’s October decision, the tone was relatively hawkish regarding inflation and employment, not expressing real worries. In addition, they provided a hint about action in December. The minutes may reveal how hawkish the members really are and how close a December hike is real. Note that the excellent NFP was released in the meantime, and that the Fed edits the minutes until the last minute before the publication. Markets always move by any wording nuances.
  8. Japan rate decision: Thursday. The Bank of Japan maintained its monetary policy, refraining from adding further stimulus at its policy meeting in October. However, the members reiterated their promise to increase the monetary base at an annual rate of 80 trillion yen ($660 billion). At the Press conference, following the meeting, BOJ Governor Haruhiko Kuroda said there were no proposals to ease monetary policy during the meeting, and blamed the low energy prices for the failure to achieve the BOJ’s inflation target.
  9. US Unemployment Claims: Thursday, 13:30. New U.S. applications for unemployment benefits remained unchanged last week, indicating strong labor market conditions. The data was worse than the 270,000 forecasted but still supports the Federal Reserve call to raise interest rates next month. The four-week moving average of claims rose 5,000 to 267,750 last week, still close to a 42-year low. The number of people continuing to receive benefits after an initial week of aid increased 5,000 to 2.17 million last week. Jobless claims for this week are expected to reach 272,000.
  10. US Philly Fed Manufacturing Index: Thursday, 15:00. The Philadelphia manufacturing index remained in negative territory for the second month in a row reaching -4.5 in October after posting -6 in the prior month. The negative figures show sharp slowing in the manufacturing sector. The strength of the US dollar has been weighing on US industry since last fall, making products less competitive in the global market. Philadelphia manufacturing index is expected to rise to 0.1 in November.
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