Press review - page 408

[Sergey Golubev]

GBP/USD Intra-Day Fundamentals: BoE Official Rate and 26 pips price movement

2016-06-16 11:00 GMT | [GBP - Official Bank Rate]

• past data is 0.50%
• forecast data is 0.50%
• actual data is 0.50% according to the latest press release

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

[GBP - Official Bank Rate] = Interest rate at which the BOE lends to financial institutions overnight.

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"The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target and in a way that helps to sustain growth and employment.  At its meeting ending on 15 June 2016 the MPC voted unanimously to maintain Bank Rate at 0.5%.  The Committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion."

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GBP/USD M5: 26 pips price movement by BoE Official Rate news event

[Sergey Golubev]

USD/CNH Technical Analysis: bullish trend near 100 SMA ranging border (based on the article)

• "The pair continues to test higher as the price pivots around the 6.6000 level while appearing to find short term support at 6.5880, in turn creating a situation in which the price trades in what looks like an undecided narrow range for the last couple of days."
• "If price is able to break above 6.6000 and hold the level, it might initially expose possible resistance at the February 3 high around 6.6500."
• "A break below 6.5880 may put the focus again on the 6.5500 prior support level. A break below that level could put the spotlight on a major support confluence zone (marked blue) that combines the 6.5000 handle, 200 day SMA, trend line from October 2015, and the 6.47446 level, which is the 0.382 Fib from the long term up trend as marked from the 2014 low at 6.0150."
  

As we see from the chart above - the daily price is located above 200 SMA with near and above 100 SMA for the primary bullish market condition. If the price breaks 6.6152 resistance level to above so the daily bullish trend will be continuing, otherwise - the price will be on ranging within the levels waiting for direction.

By the way, the bearish reversal level for the daily price is 6.4665 located near and below 200 SMA, and if the price breaks this level to below so the bearish reversal of the price movement will be started.

[Sergey Golubev]

Trading News Events: Canada Consumer Price Index (CPI) (adapted from the article)

• "A slowdown in Canada’s headline & core Consumer Price Index (CPI) may drag on the loonie and fuel the near-term advance in USD/CAD as it puts pressure on the Bank of Canada (BoC) to further support the real economy."
• "Even though BoC Governor Stephen Poloz sticks to the sidelines in 2016 and largely endorse a wait-and-see approach for monetary policy, the central bank may revert back to its easing cycle in an effort to encourage a stronger recovery."
• "Canada’s Consumer Price Index (CPI) climbed an annualized 1.7% in April following the 1.3% expansion the month prior, while the core rate of inflation unexpectedly advanced 2.2% during the same period amid forecasts for a 2.0% print. A deeper look at the report showed transportation costs increased 2.0% as energy prices climbed 3.8%, while prices for clothing and footwear held flat in April, with food costs falling 0.5% following a 0.3% contraction in March. Despite the stronger-than-expected CPI report, the Canadian dollar struggled to hold its ground, with USD/CAD climbing back above the 1.3100 handle to end the day at 1.3107."

H4 price is located near SMA with period 100 (100-SMA) and SMA with the period 200 (200-SMA) waiting for the direction for the possible breakout or breakdown.

• If the price will break 1.2983 resistance level on close H4 bar so we may see the bullish trend to be started on this timeframe.
  
• If price will break 1.2818 support so the bearish trend will be continuing.
  
• If not so the price will be ranging within the levels.
  

Resistance	Support
1.2983	1.2818
1.3085	1.2654

SUMMARY : ranging

TREND : waiting for direction

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Forecast for Q2'16 - levels for USD/CAD

Sergey Golubev, 2016.06.17 11:45

USD/CAD M5: 22 pips range price movement by Canada's Consumer Price Index news event

[Sergey Golubev]

Fundamental Weekly Forecasts for Dollar Index, GBP/USD, USD/CAD, USD/JPY, AUD/USD and GOLD (based on the article)

Dollar Index - "Unfortunately, the top US-centric event risk in the week ahead is scheduled prior to the expected rendering of the Brexit results. Ms. Yellen is due to testify before the House and Senate on monetary policy Tuesday and Wednesday. She will be in the same position of wait-and-see as the rest of the market. Had her inquisition come after the event were resolved, she could have given more definitive bearing for speculators on Fed forecasts in response."

GBP/USD - "This time next week, unless something unexpected takes place, we will finally have the results of the widely-awaited upon Brexit referendum. Those results are set to be released on Friday morning in the UK from between 7-9AM (2-4 AM Eastern Time), and, frankly, nobody is quite sure what to expect here. While ‘remain’ seemed to be a nearly foregone conclusion just two months ago, a recent series of polls highlighting a majority of voters leaning towards ‘leave,’ has created considerable confusion in the expectations around the referendum."

USD/CAD - "James Bullard, president of the St. Louis Federal Reserve Bank, noted on Friday that he was the low ‘Dot’ on the Fed’s notorious ‘Dot Plot.' Per Bullard, the Federal Reserve should only be looking to hike one more time until 2018. This Bearish development (which isn’t completely out of character for him) spooked USD Bulls, which provided a lift for the Canadian Dollar."

USD/JPY - "Another leg lower in USD/JPY may fuel speculation for a currency intervention as Japanese officials favor a stable exchange rate, but the Bank of Japan (BoJ) may stick to the sidelines at the next interest-rate decision on July 29 as Governor Haruhiko Kuroda and Co. continue to monitor the impact of the negative interest rate policy (NIRP) on the real economy. As a result, the BoJ’s wait-and-see approach may continue to heighten the appeal of the Yen especially as Japan returns to its historical role as a net-lender to the global economy."

AUD/USD - "In practice, all this may fall by the wayside as traders focus on a singular binary outcome: the UK European Union membership referendum. The outcome will be pivotal for the direction of risk appetite trends. Opinion polls in recent weeks have started to skew toward a preference for so-called “Brexit”. No country has ever left the EU under such circumstances, much less the region’s second-largest economy."

GOLD (XAU/USD) - "Looking ahead, traders will be fixated on the upcoming UK referendum as well as the semi-annual Humphry Hawkins testimony with Fed Chair Janet Yellen. On the back of this week’s rate decision, Yellen’s testimony before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday will be closely scrutinized as market participants attempt to ascertain both the timing and scope for Fed normalization amid the ongoing “uncertainty” she so passionately expressed on Wednesday. All eyes will be on the Brexit decision next Thursday and gold will likely see some serious volatility should voters choose to leave the EU."

[Sergey Golubev]

Weekly Outlook: 2016, June 19 - June 26 (based on the article)

Risk off sentiment dominated during most of the week, but things reversed later on. It’s all related to the UK’s EU Referendum which happens in the upcoming week. Apart from this, two testimonies from Janet Yellen, US Durable Goods Orders and German surveys will play a role around the big vote. These are the highlights on forex calendar.

1. German ZEW Economic Sentiment: Tuesday, 9:00.
   
2. Janet Yellen speaks: Tuesday and Wednesday at 14:00. Federal Reserve Chair Janet Yellen will testify before the Senate Banking Committee, in Washington.
3. US Crude Oil Inventories: Wednesday, 14:30.
4. British EU Referendum: Thursday, with polls closing at 21:00 GMT and clear results due early on Friday.
5. US Unemployment Claims: Thursday, 12:30. The number of new claims is expected to reach 271,000 this week.
6. German Ifo Business Climate: Friday, 8:00. German business sentiment is expected to reach 107.6 in June.
7. US Durable Goods Orders: Friday, 12:30. Core orders are forecast to rise 0.1%.

[Sergey Golubev]

Something to read: Deciding if a Financial Adviser Is Right for the Job

"The Certified Financial Planner Board of Standards hired Azmyth Kaminski, a D.J., and cut off his dreadlocks, removed his body piercings and put him in a suit. He learned a few financial phrases and sat in a conference room. Then the board brought in couples looking for a financial adviser."

[Sergey Golubev]

5 Big Forex Mistakes Small Investors Make (based on the article)

1. Over-using leverage. "Brokers will give you much more leverage than you should be using."
2. Buying and selling on news.
3. Thinking time is on your side. "Most aspiring traders bet on single positions as if they knew the time to enter and exit the market is right. Yet, oftentimes their timing is wrong."
   
4. Ignoring currencies with big spreads.
5. Thinking like a retail investor. Teach yourself to think like a banker.

[Sergey Golubev]

Week Ahead: Will Great Britain Become Little England?

• "The biggest fear in the markets is that a British decision to leave the EU could trigger similar votes elsewhere in the EU and even the Eurozone and endanger the whole European project. That really could cause turmoil."
• "The price of gold, the age-old barometer of fear, has risen roughly 25% since December to its highest level in almost two years."

[Sergey Golubev]

USD/CNH Technical Analysis: daily bullish to be continuing or the secondary correction to be started (adapted from the article)

• "After finding support at 6.5500 the pair moved higher to test the 6.6000, but has yet to manage a clear break and a hold above on a daily close basis. The pair has failed to hold above the level for two consecutive days since February."
• "It seems that the pair might need to “make a decision” around the 6.5880 short term support level. If the pair manages to hold above the level, buyers could potentially attempt another move higher to break the 6.6000 handle."
• "If price is able to break above 6.6000 and hold higher, it might initially expose possible resistance at the February 3 high around 6.6500."

"A break below 6.5880 may put the focus again on the 6.5500 prior support. A break below that level could put the spotlight on a major support confluence zone (marked blue) that combines the 6.5000 handle, 200 day SMA, trend line from October 2015, and the 6.47446 level, which is the 0.382 Fib from the long term up trend as marked from the 2014 low at 6.0150."

Daily price is located above Ichimoku cloud in the bullish area of the chart: the price is ranging within the following key support/resistance levels:

• 6.6152 resistance located above Ichimoku cloud in the bullish area, and
• 6.5632 support level located on the border between the primary bullish and the secondary sorrection.
  

If the price breaks 6.6152 level to above so the primary bullish trend will be continuing.
If the price breaks 6.5632 support level to below on close daily bar so the secondary correction will be started.
If the price breaks 6.5373 support level so the reversal of the price movement to the primary bearish market condition will be started.

By the way, Chinkou Span line is located above the price for the bullish condition with the possible secondary correction to be started in the near future by direction.

[Sergey Golubev]

IMF Says Achieving Abenomics' Targets Require Policy Upgrade (based on the article) :

"Under current policies, the high nominal growth goal, the inflation target, and the primary budget surplus objective all remain out of reach within the timeframe set by the authorities."