EURUSD Technical Analysis 2016, December: ranging market condition within the bearish area of the chart - page 3

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Sergey Golubev, 2016.12.17 14:27

Weekly EUR/USD Outlook: 2016, December 18 - December 25 (based on the article)


EUR/USD dropped sharply on the Fed’s hawkish hike, reaching levels last seen around 14 years ago. Will it continue toward parity? A key German survey is the highlight in the week leading to Christmas.

  1. German Ifo Business Climate: Monday, 9:00.
  2. German PPI: Tuesday, 7:00.
  3. Current Account: Tuesday, 9:00.
  4. Belgian NBB Business Climate: Wednesday, 14:00.
  5. Consumer Confidence: Wednesday, 15:00.
  6. ECB Economic Bulletin: Thursday, 9:00. The European Central Bank publishes the data that the Governing Council reviewed ahead of the recent rate decision.
  7. German GfK Consumer Climate: Friday, 7:00.
  8. French Consumer Spending: Friday, 7:45.

 

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Sergey Golubev, 2016.12.19 11:26

EUR/USD Intra-Day Fundamentals: German Ifo Business Climate and 23 pips range price movement

2016-12-19 09:00 GMT | [EUR - German Ifo Business Climate]

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

[EUR - German Ifo Business Climate] = Level of a composite index based on surveyed manufacturers, builders, wholesalers, and retailers.

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From official report:

"The German economy is in a festive mood. The Ifo Business Climate Index rose in December to 111.0 points from 110.4 points in November. Assessments of the current business situation improved, reaching their highest level since February 2012. The business outlook for the first half of 2017 is also slightly more optimistic. The German economy is making a strong finish to the year."


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EUR/USD M5: 23 pips range price movement by German Ifo Business Climate news event



 

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Sergey Golubev, 2016.12.22 15:14

Intra-Day Fundamentals - EUR/USD and GBP/USD: U.S. Gross Domestic Product

2016-12-22 13:30 GMT | [USD - GDP]

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

[USD - GDP] = Annualized change in the inflation-adjusted value of all goods and services produced by the economy.

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From official report:

"Real gross domestic product increased at an annual rate of 3.5 percent in the third quarter of 2016, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.4 percent."


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EUR/USD M5: 22 pips range price movement by U.S. Gross Domestic Product news events


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GBP/USD M5: 30 pips range price movement by U.S. Gross Domestic Product news events



 

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Sergey Golubev, 2016.12.23 06:42

Credit Suisse forecast for EUR/USD in 2017: core target remains in 1.01 (based on the aricle)


  • "EUR/USD bounced back as of late as it consolidated recent losses. However, we expect the 1.0506/31 “breakdown point” to cap to keep the trend directly lower. Removal of the 1.0352 recent low can see further downside to test 1.0342/36 next."
  • "We maintains a short EUR/USD position."
  • "However, although we would expect an initial hold to be seen here, we continue to look for a break in due course for a move to 1.01."


 

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Sergey Golubev, 2016.12.24 05:09

Weekly EUR/USD Outlook: 2016, December 25 - January 01 (based on the article) 

 

EUR/USD dipped to new lows but rebounded ahead of the Christmas holiday. The week between Christmas and New Year’s is quite light. Here is an outlook for the highlights of this week.

  1. Monetary data: Thursday, 9:00. The European Central Bank monitors the money in circulation and growth in loans. While these have both recovered, October’s numbers were something of a setback. M3 Money Supply decelerated to 4.4% while private loan growth remained stuck at 1.8%. M3 is projected to remain unchanged but loans carry expectations for a tick up to 1.9%.
  2. Spanish Flash CPI: Friday, 8:00. Just before New Year’s celebrations, Spain releases preliminary data for inflation. This stood at an annual rate of 0.7% back in November and an acceleration to 0.9% is on the cards. The rise in consumer prices is attributed to the diminishing effect of falling oil prices.

 

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Sergey Golubev, 2016.12.24 05:30

What can we expect in 2017? Interview with FXStreet (based on the article)

What emerging trends or issues should traders prepare for in 2017?

"The easy answer is growing impact from politics: Trump’s first year in office, as well as elections in France and later Germany, will keep us busy. This makes central bankers somewhat less important than they used to be. They will no longer be “the only game in town” but will not disappear in the shadows either. In Europe, some fiscal stimulus could replace austerity on an election year and in line with other countries. Britain could also join in. This could be the year when we talk about “inflation lifting its ugly head” more often than worries about deflation which have dominated beforehand. Inflation could come from China rather than from the US."

 

Which will be the best and worst performing currencies in 2017 and why? 

"The US dollar could reverse its gains as the dust settles in after Trump’s inauguration. Like with many politicians, promises are meant to be broken and a Republican Congress is where the buck could stop. The pound could extend its falls as Brexit reality bites in, something that has not happened so far. The winners could be the euro, that may fall early in the year but recover on fiscal stimulus and more mainstream election results. Another winner could be the Australian dollar, which could enjoy Chinese efforts to maintain its growth."

 

Which under-the-radar currency pair do you expect to make a big move in 2017? 

"USD/CAD could make a big move to the upside due to two reasons. The first is oil prices unable to rise and this could weigh on the loonie. Another reason is a lack of US demand due to less stimulus. Both factors could trigger a rate cut. The BOC has already told us that the lower end for rates is -0.50%, a full percentage point under the current level. The Canadian dollar has scope for falls, something that may eventually help the Canadian economy, but not in 2017."

 

What will you be focused on next year? 

"I will be focused on politics and their impact on markets. Central bankers are still important but have somewhat less influence, and they are less exciting than the impact of politics on currencies. This is not limited to the elections but also to policy, which could certainly be on the move."


 

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Sergey Golubev, 2016.12.24 12:10

Euro Q1 2017 Forecast - EUR/USD Enters 2017 Positioned for More Downside (based on the article)


Fundamental Analysis 

  • "On the US Dollar’s side, the decision in December 2016 to signal three rates in 2017 – as opposed to the market-priced two ahead of the policy statement – has sent US Treasury yields higher. As a gauge of long-term growth and inflation expectations, the US Treasury yield curve steepening is a reflection of the market's belief that tighter monetary policy is coming in the near-term." 
  • "On the Euro side, the European Central Bank’s decision in December 2016 to alter its QE program proved significant. In our Q4’16 forecast, we said “The ECB will very likely be forced to remove the -0.40% barrier (allowing more German bunds to be purchased), or to remove the capital key restriction (allowing more peripheral sovereign debt to be purchased).” By going the former route as opposed to the latter, the ECB has primed the Euro to be in a disadvantageous position if interest rates elsewhere continue to rise." 
  • "By the end of Q1’17, traders should start to pay more attention to European politics. On March 15, 2017, the Dutch elections will be held, the first of four significant elections in 2017. After the dramatic ‘No’ result on the December 4 constitutional referendum, Italy will likely head to the polls again by mid-2017. Luckily, for the Euro, the lack of reform that cost Matteo Renzi his job as prime minister may keep the Italian political system broken enough to prevent the Five Star Movement from ever achieving enough power to pull Italy out of the European Union. In April and May 2017, French presidential elections will be held, and the country will face its own populist threat in Marine Le Pen. Later in 2017 (date TBD), German elections will be held amid an environment in which Angela Merkel’s popularity Is quickly sliding (at five-year lows in December 2016) thanks to her immigration policy and an expanded terrorism threat in Europe. Needless to say, for those who thought 2016 was a year of surprises and shocks, 2017 is sure not to disappoint." 

Technical Analysis

  • "We were looking for signs of a turn higher in Q4’16, but that didn’t happen. Instead, EUR/USD broke lower in a significant way. In our Q4’16 EUR/USD forecast, we wrote about the extremely coiled environment persisting in the pair, noting, “according to the measure, EUR/USD is the most coiled in history. It’s been 81 weeks since the last 52-week high or low. The previous record was 77-weeks, which ended with the breakout in May 2002.” Furthermore, “if the March 2015 lows break, then the call for a bottom is wrong and focus would shift to 0.9450-0.9550 (historical inflection point and measured objective).” This zone is in play in Q1’17 and is reinforced by the 61.8% retracement of the 1985-2008 rally at 0.9608."
  • "Strength through the median line from the bearish channel, which was resistance throughout 2016, would trigger a major bearish trap and shift focus to the downtrend line in the mid-1.2000s later in the year (fitting with the idea of the US Dollar rising then falling over the course of 20170." 

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