Press review - page 358

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EUR/USD: short-term strategy, long-term strategy and the levels to watch - Swiss Finance Corporation (based on the article)

  • Short-term strategy: "Positive above 1.0860 with scope for retest of recent highs.Market seems not to be overly happy with EURUSD staying above 1.10. Respect 1.09-1.1050 range for now. Involve only on the extremes."
  • Long-term strategy: "Daily close above 1.10/1.1020 turns our m/t model positive. We do not get excited though and take wait-and-see approach looking for additional confirmation that rally has further room to go."
  • Levels to watch: "1.0920/860 on the downside; 1.1030/50 on the upside."


As we see from the chart above - the price (H4) is on bullish market condition for the secondary ranging within s/r levels waiting for direction:

  • If the price will break 1.1042 resistance level from below to above on close H4 bar so the bullish trend will be continuing.
  • If price will break 1.0926 support level from above to below on close H4 bar so the secondary correction will be started within the primary bullish market condition.
  • If price will break 1.0795 support level from above to below on close H4 bar so the bearish reversal will be started with the secondary ranging.
  • If not so the price will be ranging within the levels.
Resistance
Support
1.10421.0926
N/A1.0795
  • Recommendation to go short: watch the price to break 1.0926 support level for possible sell trade
  • Recommendation to go long: watch the price to break 1.1042 resistance level for possible buy trade
  • Trading Summary: ranging bullish
 

AUD/USD Technical Analysis: re-enter for short (based on the article)

  • "The Australian Dollar continues to consolidate below the 0.73 figure against its US counterpart having broken support set from early November. Overall positioning may be carving out a bearish Head and Shoulders topping pattern, although confirmation is still pending for now."
  • "From here, a daily close below resistance-turned-support at 0.7184 opens the door for a challenge of 0.7089, the intersection of a rising trend line set from September lows and the 23.6% Fibonacci expansion. Alternatively, a push above horizontal pivot resistance at 0.7283 paves the way for a test of the 38.2% Fib retracement at 0.7387."
  • "We sold AUD/USD at 0.7250 and subsequently booked profit on half of the position."


Anyway, H4 price is located near 100 period SMA on the border between the primary bullish and the ranging bearish trend on the chart with the symmetric triangle pattern to be crossed for direction:

  • if the price breaks 0.7268 resistance so the reversal to the primary bullsh condition will be started;
  • if the price breaks 0.7158 support level so the primary bearish trend will be continuing with the secondary ranging up to the new 'bottom' to be forming;
  • if not so the price will be moved within the channel.
Resistance
Support
0.72680.7158
0.7384
N/A
 

EUR/USD: trading ideas by Societe Generale (based on the article)

SocGen made a long-term forecast for EUR/USD confirmed that 1.05/1.04 levels as the medium-term target will be extended in downmove to 0.96/0.95 target in the long-term situation.


As we see from the chart above (EUR/USD, D1) - the price is on bear market rally within the primary bearish market condition: 100 SMA/200 SMA are very near to be broken by the price from below to above for the reversal of the price movement from the primary bearish to the primary bullish market condition. If the price will be bounced from 1.1042 resistance level so we may see the ranging bearish condition up to 1.0516 level as a nearest bearish target in this case.

  • If the price will break 1.1042 resistance level on close daily bar so we may see the reversal of the price movement from the primary bearish to the primary bullish market condition.
  • If price will break 1.0516 support so the bearish trend will be continuing up to 0.96/0.95 target.
  • If not so the price will be ranging within the levels.
Resistance
Support
1.10421.0516
1.1386N/A
  • Recommendation to go short: watch the price to break 1.0516 support level for possible sell trade
  • Recommendation to go long: watch close daily price to break 1.1042 resistance level for possible buy trade
  • Trading Summary: ranging on reversal

SUMMARY : ranging

TREND : waiting for direction
 

EUR/USD Intra-Day Fundamentals - German ZEW Economic Sentiment and 15 pips price movement

2014-12-15 10:00 GMT | [EUR - German ZEW Economic Sentiment]

[EUR - German ZEW Economic Sentiment] = Level of a diffusion index based on surveyed German institutional investors and analysts. It's a leading indicator of economic health - investors and analysts are highly informed by virtue of their job, and changes in their sentiment can be an early signal of future economic activity.

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The ZEW Indicator of Economic Sentiment for Germany has increased for the second consecutive time in December 2015. Gaining 5.7 points compared to the previous month, the index now stands at 16.1 points (long-term average: 24.7 points).

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EURUSD M5: 15 pips price movement by EUR - German ZEW Economic Sentiment news event :


 

EUR/USD Intra-Day Fundamentals - Consumer Price Index (CPI) and 26 pips price movement

2014-12-15 13:30 GMT | [USD - CPI]

[USD - CPI] = Change in the price of goods and services purchased by consumers.
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

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The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 0.5 percent before seasonal adjustment.

The index for all items less food and energy rose 0.2 percent in November, the same increase as in September and October. The indexes for shelter, medical care, airline fares, new vehicles, and tobacco were among the indexes that rose in November. In contrast, the indexes for recreation, apparel, household furnishings and operations, and used cars and trucks all declined.

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EURUSD M5: 26 pips price movement by USD - Consumer Price Index (CPI) news event :


 

EUR/USD: short-term strategy, long-term strategy and the levels to watch - Swiss Finance Corporation (based on the article)

  • Short-term strategy: "Positive above 1.0950/0860 with scope for limited gains ahead. Market is probing congested resistance in 1.1040/50 area where 100&200D SMA's converge. Sustained gains above should provide additional fuel to present rally and open door to further advance into 1.11 initially and 1.12 should the rally extend. No position at present."
  • Long-term strategy: "Daily close above 1.10/1.1020 turns our m/t model positive. We do not get excited though and take wait-and-see approach looking for additional confirmation that rally has further room to go ( close above 100& 200D SMA)."
  • Levels to watch: "1.0950/860 on the downside; 1.1050 on the upside."


The price (H4) is on bullish market condition located above 100 period SMA and 200 period SMA with the secondary ranging within the follolwing support/resistance levels:

  • Fibo resistance level at 1.1059, and
  • Fibo support level at 1.0914.

RSI indicator is estimating the local downtrend as the secondary correction to be started within the primary bullish market condition.

  • If the price will break Fibo resistance level at 1.1059 from below to above on close H4 bar so the bullish trend will be continuing.
  • If price will break Fibo support level at 1.0914 from above to below on close H4 bar so the secondary correction will be started within the primary bullish market condition.
  • If not so the price will be ranging within the levels.
Resistance
Support
1.10421.0914
1.1059N/A
  • Recommendation to go short: watch close H4 price to break 1.0914 support level for possible sell trade
  • Recommendation to go long: watch close H4 price to break 1.1059 resistance level for possible buy trade
  • Trading Summary: possible correction
 

AUD/USD: intra-day bearish reversal (adapted from the article)

Swiss Finance Corporation made the following forecast for this pair:

  • Short-term strategy: "Mixed.Conflicting s/t and m/t signals. Respect 0.7160-0.7340 range for now. Shorts off 0.7250 closed @ 0.7185 & 0.7220. No position at present."
  • Long-term strategy: "No change.Positive above m/t support @ 0.7020.Sharp rejection off 0.7380 signals bull exhaustion and possible top in place. Close longs on rallies or trail stops up to 0.7160, targeting retest of recent highs."
  • Levels to watch: "0.7180/60 on the downside 0.73 on the upside."


The price (H4) is on bearish reversal for the 200 period SMA crossing within the following key reversal support/resistance levels:

  • Fibo resistance level at 0.7282 located above 100 SMA/200 SMA in the primary bullish area of the chart, and
  • Fibo support level at 0.7159 located below 100 SMA/200 SMA levels in the primary bearish area.

RSI indicator is estimating the bearish breakdown to be started.

  • If the price will break Fibo resistance level at 0.7282 from below to above on close H4 bar so the bullish trend will be continuing.
  • If price will break Fibo support level at 0.7159 from above to below on close H4 bar so we may see the reversal of the price movement from the primary bullish to the primary bearish market condition.
  • If not so the price will be ranging within the levels.
Resistance
Support
0.72820.7159
0.7384N/A
  • Recommendation to go short: watch close H4 price to break 0.7159 support level for possible sell trade
  • Recommendation to go long: watch close H4 price to break 0.7282 resistance level for possible buy trade
  • Trading Summary: possible bearish breakdown
 

EUR/USD ranges on reversal ahead of FOMC (adapted from the article)

Morgan Stanley is forecasting USD long movement against the major currencies incl TRY, BRL, AUD and CAD for example:

  • "Of course, it matters what you go long USD against. We think the combination of weak commodities, stress in high yield and uncertainty about China’s FX policy may lead funding currencies to outperform."
  • "The deterioration in risk sentiment is supporting our bullish JPY call, and EUR’s negative correlation to risky assets is strong, especially given the disappointing ECB announcement earlier this month."
  • "Should the Fed’s messaging fail or broader macro concerns weigh on risky assets, USD is actually vulnerable against EUR, JPY and other non-commodity G10 currencies."
  • "Therefore we prefer to play USD longs against AUD and CAD in G10 and select EM currencies such as TRY and BRL."

Let's describe the situation with the technical point of view.

H4 price was on the secondary correction within the primary bullish market condition: price was bounced from 1.1059 resistance level yesterday and it was stopped inside Ichimoku cloud near 1.0904 support level and Senkou Span line which is the virtual border between the primary bullish and the primary bearish on the chart.

  • Chinkou Span line crossed the price from above to below for good possible breakdown.
  • Absolute Strength indicator is estimating the ranging condition.
  • Trend Strength indicator is forecasting the bearish reversal to be started soon.
  • The nearest support levels are 1.0904 and 1.0878.
  • The nearest resistance levels are 1.1042 and 1.1059.
Resistance
Support
1.10421.0904
1.10591.0878


If price will break 1.0904 support level on close H4 bar so we may see the reversal of the intra-day price movement from the primary bullish to the primary bearish market condition with the secondary ranging: the price will be located inside Ichimoku cloud for ranging).
If price will break 1.1059 resistance level on close H4 bar so the primary bullish trend will be continuing.
If not so the price will be ranging within the levels.

  • Recommendation for long: watch close H4 price to break 1.1059 for possible buy trade
  • Recommendation to go short: watch close H4 price to break 1.0904 support level for possible sell trade
  • Trading Summary: ranging on bearish reversal

SUMMARY : ranging on reversal

TREND : ranging
 

USD, EUR/USD, AUD/USD and GBP/USD Into FOMC (adapted from the article)

Credit Suisse and Credit Agricole are forecasting the Fed rates hike for today telling that Fed will maintain a dovish tone during the FOMC Statement:

2014-12-16 19:00 GMT | [USD - Federal Funds Rate]

  • past data is 0.25%
  • forecast data is 0.50%
  • actual data is N/A according to the latest press release

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - Federal Funds Rate] = Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.

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Credit Suisse, Credit Agricole and some other int'l financial institutions are forecasting the ranging volatile market condition during and after FOMC mettings because of the following:

  • they predict for Federal Funds Rate actual value to be 0.50% compare with the 0.25% as the previous one, and if actual > forecast (or previous one) = good for currency (for USD in our case), but
  • they are expecting less hawkish (more dovish tone) during the FOMC Statement, and as we know: less hawkish is bad for currency (for USD in our case).

Thus, we may see the ranging condition in intra-day basis for the major currency pairs.

What does it mean for EUR/USD, AUD/USD and GBP/USD for example?

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EUR/USD H4: Ranging. The price is on ranging condition located near and above 100 SMA/200 SMA within the following key reversal support/resistance levels:

  • 1.1059 resistance located above 100 SMA/200 SMA in the bullish area of the chart, and
  • 1.0520 support level located below 100 SMA/200 SMA in the primary bearish area of the chart.



According to above mentioned forecast - the price will continuing with the ranging condition within the levels.

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AUD/USD H4: Ranging on bearish reversal. The price is on ranging condition located near 200 SMA on the border between the primary bearish and the primary bullish trend on the chart within the following key reversal support/resistance levels:

  • 0.7384 resistance located above 100 SMA/200 SMA in the bullish area of the chart, and
  • 0.7159 support level located below 100 SMA/200 SMA in the primary bearish area of the chart.



Thus, we can foresee the price to break 200 SMA from above to below for 0.7159 as the next bearish target which means the reversal of intra-day price movement to the primary bearish market condition.

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GBP/USD H4: Ranging. The price is located near and below 100 SMA/200 SMA for the ranging market condition within the following key reversal support/resistance levels:

  • 1.5239 resistance located above 100 SMA/200 SMA in the bullish area of the chart, and
  • 1.4894 support level located below 100 SMA/200 SMA in the primary bearish area of the chart.



The most likely scenario for the intra-day price is to be moved during and immediate after FOMC meetings with the ranging condition within the levels, and in long-term situation - bearish market condition by 1.49/1.48 support area to be broken.

 

Trading News Events: Federal Open Market Committee (FOMC) Interest Rate Decision (based on the article)

Based on Fed Funds Futures, market participants are pricing a 76% probability for a rate-hike a the Federal Open Market Committee’s (FOMC) December 16 interest rate decision, and the fresh updates coming out of the central bank may instill a bullish U.S. dollar outlook for 2016 should Chair Janet and Co. outline a more detailed exit-strategy.

What’s Expected:


Why Is This Event Important:

Even though the FOMC remains on course to shift gears, a split decision to implement higher borrowing-costs accompanied by a downward revision in the central bank’s updated forecasts may drag on rate expectations, and the dollar stands at risk of facing near-term headwinds over the remainder of the month should the ‘data dependent’ Fed highlight a wait-and-see approach for the year ahead.

However, subdued wage growth paired with the ongoing weakness in household consumption may push the FOMC to temper market expectations, and the greenback may struggle to hold its ground should the committee outline a more shallow path for interest rates.

How To Trade This Event Risk

Bullish USD Trade: Fed Lifts Benchmark Interest Rate, Warns of Higher Borrowing-Costs in 2016

  • Need red, five-minute candle following the rate decision to consider a short EUR/USD position.
  • 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 cost; at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is met, set reasonable limit.
Bearish USD Trade: FOMC Implements ‘Dovish’ Rate-Hike, Endorses Wait-and-See Approach
  • Need green, five-minute candle to favor a long EUR/USD trade.
  • Implement same strategy as the bullish dollar trade, just in the opposite direction.
Potential Price Targets For The Release
EURUSD Daily


  • Despite bets for the first Fed rate-hike in nearly a decade, the near-term rally in EUR/USD following the European Central Bank (ECB) interest rate decision may gather pace in the days ahead especially as the Relative Strength Index (RSI) appears to be breaking out of the bearish formation carried over from back in August.
  • Interim Resistance: 1.1052 (November high) to 1.1090 (50% retracement)
  • Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)
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