Press review - page 71

[Sergey Golubev]

AUDUSD Technical Analysis (adapted from this article).

• Last week’s (week that ended 1/3) outside reversal broke a string of 10 consecutive down weeks, something that had not happened since 1982.
• The bounce from the 12/18 low is shallow and corrective. Still, the specter of 5 waves down from the Oct high at least warns of a stronger rally attempt. .9167 (former 4th wave price extreme) to .9267 (former range low) is likely resistance.

Trading Strategy: Flat (trading long intraday) but looking higher towards .9167-.9267 for the next top.

[Sergey Golubev]

EURUSD Technical Analysis (adapted from this article).

• On 12/27, EURUSD traded into the line that extends off of the 2008 and 2011 highs and reversed. On 1/2, price broke below the line that extends off of the 11/7 and 11/21 lows.
• The decline is impulsive and price has rebounded from support (1.3547 is the 11/6 high) in what may be part of a corrective rally. 1.3745 is of particular interest as resistance.
  

Trading Strategy: Flat but monitoring for resistance at 1.3745.

[Sergey Golubev]

USDJPY Technical Analysis (adapted from this article).

• USDJPY has responded to the previously uncovered close from Oct 2008 at 105.30 (high was 105.43). A cluster of bearish outside days (1/2, 1/6, and 1/10) suggest big selling and there is little reason to suspect that it’s complete.
• At this point, one needs to treat weakness as part of a larger bull move. 102.50 is of interest as support. This level was the ‘lower high’ in May 2013, 12/17/13 low and more generally the middle of congestion that took place in the first half of Dec. I’m tracking a possible topping pattern in the S&P 500 as well.
  

Trading Bias: Flat but monitor for support if the market sees 102.50. Long seems like a crowded arena so respect the potential for the rate to overshoot into 101.50/60 (Dec 2013 low, Jul 2013 high, Apr 2009 high, 2005 low). Things could get worse if the S&P setup completes.

[Sergey Golubev]

Outlook For Gold In 2014 (adapted from Forbes article)

Let’s take a look at the macro environment as we enter the new year:

• The inflation that gold enthusiasts have feared since the onset of the 2008 crisis is dead on arrival.  The latest CPI figures show an inflation rate of just 1.2%, and energy prices are actually falling.
• The quantitative easing that fueled the inflation fears of the past few years is already being tapered, from $85 billion in bond purchases per month to $75 billion per month…with more tapering to come.
• The Federal budget deficit, though still far too high, continues to fall and is expected to be just 3.3% of GDP in fiscal year 2014.
• Gold miners are contemplating hedging their risk by selling their production forward,  which will effectively cap the price of gold (and sends a very negative signal to the market).
• Hedge funds and other large institutional buyers—the driving force behind much of the rise in the spot price of gold in the past decade—appear to be abandoning gold if the outflows from gold ETFs are any indication.  Gold ETF holdings are now at their lowest levels since 2008.
•  Gold now has competition in the anti-establishment crowd from Bitcoin and other “virtual” currencies.  (I think Bitcoin is a joke, mind you, but that doesn’t mean that it won’t continue to steal gold’s thunder for a while longer.)

[Sergey Golubev]

Analysis for GBPUSD for the next coming week (adapted from this article).

Fundamental Forecast for the British Pound: Bearish

• Over the past 20 years, January has typically been a poor month for the GBPUSD.
• The British Pound looked set to decline after NFPs, but the weak report put the selloff on hold.
• Ultimately, we still want to buy dips in the British Pound.

[Sergey Golubev]

Australian Dollar to Rise Further as Markets Ponder Fed Outlook (adapted from this article)

Fundamental Forecast for Australian Dollar: Bullish

• December’s Australian Jobs Report Unlikely to Derail Stable RBA Outlook
• Aussie Bounce to Continue as Markets Ponder Fed Policy After Dismal NFP

We’ve argued that the Australian Dollar has room to correct higher in early 2014 as the fundamental argument for Aussie weakness becomes increasingly flimsy while speculative traders remain heavily net-short (per futures market positioning data from the CFTC). Absent new evidence to advance the case against the currency, we said a period of profit-taking that drives the Australian unit higher is probably ahead.

[Sergey Golubev]

Silver Markets And Outlook (based on this article)

The $1.1 billion company, which calls itself the largest U.S.-based primary silver producer, lost about $69 million over the past three quarters, in a difficult commodities market. It notched annual losses from 2008 to 2011, but recovered in 2011 and 2012.

Edited excerpts from a phone conversation with Coeur CEO Mitchell Krebs follow.

How has the silver price decline in 2013 affected your business? (Silver fell 36 percent in 2013, the second-worst performer among commodities after corn, and worse still than gold’s much publicized 28 percent swoon.)

“It’s the first time in a long time that the industry had to deal with significant and sustained price declines,” said Krebs. Before 2013 price declines, Coeur tried to maximize cash flow by reducing operating costs and freeing up working capital.

What’s your outlook for silver in 2014?

“I think we’re going to see continued choppiness and a fairly sideways silver price,” said Krebs. “Silver is a very volatile metal and will probably see a range of $18 up to $23 per ounce, throughout the year … Investors are trying to get a sense of global economy, whether there is or isn’t any hint of inflation, or the X-factor of some crisis, a political crisis or otherwise.

”Silver prices are forecast by London’s Capital Economics to hit $21.5 per ounce by the end of 2014, a small gain from the present $19.7/oz. Silver typically trades in tandem with gold, as the more influential yellow metal attracts heavier investment and can drag down silver in its wake.

[Sergey Golubev]

Technical analysis for GOLD (based on this article)

Fundamental Forecast for Gold: Bullish

• Gold Set Up is Similar to 6 Months Ago
• Gold Selling May be Restrained if US Payrolls Top Forecasts

Expectations for a strong NFP report had been building all week after ISM employment figures last week and a robust APD private sector print this week topped consensus estimates. A print of just 74K was well off expectations for a read of 196K+ and although the unemployment rate dropped to 6.7% from 7%, the move was largely a result of another massive contraction in the civilian labor force. The loss of so called ‘discouraged workers’ has continued to put artificial downside pressure on the headline unemployment figure with the labor force participation rate falling back to 62.8%, its lowest read since December (which was the lowest read since 1978).

From a technical standpoint, gold looks poised for a move higher with a breach above $1248 targeting key resistance at $1268/70. This region represents are more critical barrier and is defined by a three-way Fibonacci confluence & the December high. A compromise of this threshold constitutes a breakout of a larger structure dating back to the October high threatens our broader directional bias heading into 2014. Such a scenario looks for initial resistance targets at $1293 and $1325. A break below the monthly opening range low puts the broader trend back into focus with support targets eyed at $1151/60, $1125 and $1091. It’s important to note that we’ve put in a pretty clean monthly opening range, closing the week just below near-term resistance. Look for a break of this range offer further conviction on our corrective focus higher.

[Sergey Golubev]

Weekly outlook: January 13 - 17 (based on this article)

Monday, January 13

Australia is to publish data on the number of new home loans granted, a strong indicator of demand in the housing market.

The Bank of Canada is to release its quarterly business outlook survey, a leading indicator of economic health.

Later Monday, New Zealand is to release private sector data on business confidence.

Tuesday, January 14

Japan is to produce data on the current account.

The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.

The euro zone is to publish data on industrial production, a leading indicator of economic health.

The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to release data on import prices and business inventories.

Also Tuesday, Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher are to speak.

Wednesday, January 15

Australia is to publish data on new vehicle sales, a leading indicator of consumer confidence.

Switzerland is to produce data on retail sales.

The U.S. is to release data on producer price inflation and a report on manufacturing activity in the New York region.

Thursday, January 16

Japan is to release data on core machinery orders and tertiary industry activity.

Australia is to publish data on the change in the number of people employed and the unemployment rate, as well as a private sector report on inflation expectations.

The euro zone is to release data on consumer inflation, while Spain is to hold an auction of 10-year sovereign bonds.

Canada is to release data on foreign securities purchases.

The U.S. is to publish reports on consumer price inflation and initial jobless claims, in addition to data on manufacturing activity in Philadelphia. Meanwhile, Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington.

Friday, January 17

Switzerland is to publish data on producer price inflation.

The U.K. is to release data on retail sales.

The U.S. is to wrap up the week with the closely watched preliminary reading of the University of Michigan consumer sentiment index. The U.S. is also to release data on building permits, housing starts and industrial production.

[Sergey Golubev]

AUD/USD weekly outlook: January 13 - 17 (based on this article)

Monday, January 13

Australia is to publish data on the number of new home loans granted, a strong indicator of demand in the housing market.

Tuesday, January 14

The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to release data on import prices and business inventories.

Also Tuesday, Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher are to speak.

Wednesday, January 15

Australia is to publish data on new vehicle sales, a leading indicator of consumer confidence.

The U.S. is to release data on producer price inflation and a report on manufacturing activity in the New York region.

Thursday, January 16

Australia is to publish data on the change in the number of people employed and the unemployment rate, as well as a private sector report on inflation expectations.

The U.S. is to publish reports on consumer price inflation and initial jobless claims, in addition to data on manufacturing activity in Philadelphia. Meanwhile, Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington.

Friday, January 17

The U.S. is to wrap up the week with the closely watched preliminary reading of the University of Michigan consumer sentiment index. The U.S. is also to release data on building permits, housing starts and industrial production.