Eur/usd - page 217
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The technical framework of the EURUSD remains negative, but largely short-term direction will depend on the direction the pair take after today's meeting of the ECB and its decision on the quantitative easing program (QE).
A wider context, the price structure suggests a downward long-term trend.
R3 - 1.18174
R2 - 1.17485
R1 - 1.16786
Daily Std. Pivot - 1.16097
S1 - 1.15398
S2 - 1.14709
S3 - 1.14010
and we still have Greece elections on Sunday we will see more drop on the euro
France's Economy Remains Weak: Flash PMI
Manufacturing activity in France remained weak in December but booked a better result compared to the previous month, a preliminary survey by Markit Economics showed on Friday.
The flash manufacturing PMI in France came in at 49.5 in the first month of the year, up from the final 47.5 seen in December. Markets had expected a 48.0 reading.
The indicator is a key gauge of overall economic health because businesses have to respond quickly to changing market conditions. The French manufacturing sector has now been in contraction territory, below the 50-mark, since May last year.
Services PMI
Meanwhile, business activity in France's services sector returned to contraction in January, a closely watched preliminary survey showed.
The flash services PMI declined to 49.5 in the first month of the year, down from the 50.6 seen in December. Analysts had expected a 50.8 result.
The services PMI is based on a survey of selected companies and provides an advance indicator for the private sector in the economy by tracking changes in variables such as output, new orders, stock levels, employment and prices.
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EURUSD fell like an asteroid during yesterday session making fresh lows at 1.1315 and close near the low of the day creating an impulsive candle. The pair is in a well-established bearish phase and has fell 6.15% since the start of the year. Stochastic in showing an oversold market but even with the pair well into oversold territory, we should not fight the strong downward trend.
Next target is 1.1270
Euro Drops to 11-Year Low as Greek Vote Adds to Slide on ECB QE
The euro fell to the lowest in more than 11 years versus the dollar on concern an anti-austerity party will take power in Greek elections, exacerbating the currency’s drop after the European Central Bank widened its stimulus program.
The shared currency headed for a sixth weekly decline before the vote on Sunday that may oust Greece’s Prime Minister Antonis Samaras. Denmark’s krone was about 0.2 percent from its euro-linked exchange-rate target as the central bank in Copenhagen signaled it’s ready to step up currency-market interventions. Australia’s dollar declined to the lowest since 2009.
“The Greek election provides another reason to sell euro in case the ECB decision was not enough,” said Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney. “A period of consolidation in the mid-$1.13 is reasonable today, but there is no reason to believe a low is in place.”
The euro fell 1.2 percent to $1.1234 at 10 a.m. London time after touching $1.1230, the weakest since September 2003. It fell 2.1 percent on Thursday after the ECB said it would buy $60 billion euros a month of debt to stimulate euro-region inflation. The shared currency is set for a 2.9 percent weekly loss against the greenback, having dropped 9.9 percent since Dec. 12.
The euro declined 1.2 percent to 133.04 yen. The dollar was little changed at 118.44 yen.
Greek voters go to the polls on Jan. 25 in a general election that will decide whether Europe’s most-indebted country sticks to an austerity program that ensures its financial lifeline from creditors such as Germany. Alexis Tsipras, who leads the opposition Syriza group, has vowed to abandon the budget constraints that underpin the support while keeping Greece in the currency union.
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EUR/USD went down yesterday after the ECB has presented a QE stronger and lasting than expected.
The short and long-term trend is downward and the momentum shows it clearly.
The RSI in oversold, touched the 30 line resistance and moved downwards, the daily MACD continued to fall into negative territory.
R3 - 1.19036
R2 - 1.17762
R1 - 1.15705
Daily Std. Pivot - 1.14431
S1 - 1.12374
S2 - 1.11100
S3 - 1.09043
http://bewayopa.wordpress.com/
It's amazing what is happening to the Euro and let's see if there will be another fall when the price opens on Monday.
EUR/USD forecast for the week of January 26, 2015
The EUR/USD pair tried to rally at first during the course of the week, but with the European Central Bank expanding its quantitative easing program, we broke down below the 1.15 level and then crashed all the way down to the 1.11 region. We believe that the market is now heading to the 1.10 handle, and rally should be sold. It’s probably going to have to be done off of the daily charts or even lower time frames though, as longer-term charts don’t offer a lot of room between here and 1.10 at the moment.
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EU Preview: Grexit?! Europe Holding Its Breath Again
After holding its breath last week before the European Central Bank approved a large bond-purchasing program, the next drama for the European Union is the election in Greece.
On Sunday, the country could elect the anti-bailout Syriza party with its 40-year old leader Alexis Tsipras, currently ahead in the polls. If Syriza gets the chance to form a government, it could be looking to restructure Greece's debt burden and raise fears among the European and international establishment of the Greek crisis' return.
The European Commission has said that it is prepared for various scenarios for Greece after national elections on Sunday, but the EU executive body believes that the country's exit from the euro zone is not probable, EU Economic and Financial Affairs Commissioner Pierre Moscovici said last week.
"Euro zone integrity is not threatened, we don't fear what will happen in the Greek elections on Sunday. We are prepared for all kinds of scenarios in Greece," Moscovici told an audience during a seminar in Belgium.
Opinion polls before Greek elections
The latest polls show Syriza widening its lead over Prime Minister Antonis Samaras's centre-right New Democracy party, though Syriza will likely not gather enough support for an outright majority in the 300-seat legislature.
A poll published on Friday by Metron Analysis puts Syriza's lead over New Democracy up to 5.3% from 4.6%. In that case, Syriza would take 36% of the vote, putting it on the verge of an outright victory.
Another survey, by Rass, had Syriza 4.8% ahead of Samaras's New Democracy, while a poll by GPO for Mega TV showed Syriza with an even bigger 6% lead, up from a 4% lead in their previous survey.
A poll by Marc for Alpha TV showed Syriza was ahead with a 6.2% lead, significantly better than the 3.2% lead in a previous poll.
At one his latest and biggest campaign rallies, Tsipras urged Greeks to secure an outright victory for Syriza on Sunday so the country could end four years of austerity under the terms of the EU and IMF bailout program.
"On Monday, national humiliation will be over. We will finish with orders from abroad," Tsipras, told his supporters. "We are asking for a first chance for Syriza. It might be the last chance for Greece."
According to Greek electoral law, parties must receive a minimum 3% of the vote to enter the 300-seat parliament. The winning party gets 50 extra seats in the 300-seat parliament to maintain the stability of the elected government.
Polls open at 07:00 and close at 19:00 local time. Exit polls will be released immediately after voting ends and the first official projection of the result is expected by 22:00.
Macroeconomic data
A closely watched survey, the Ifo Business Climate Index, to be released on Monday, is expected to edge further up to 106.5 in January from the 105.5 booked in December.
The Current Assessment sub-index is also seen edging higher to 110.7, after posting a figure of 110.0 a month ago. The Ifo Expectations Index - indicating firms' projections for the next six months - is projected to rise to 102.5, from 101.1 in December.
Labor and preliminary inflation data from Germany will be released on Thursday, with unemployment rate in the country expected to remain at 6.5.% in January, the same as reported a month ago.
Consumer prices in Germany are seen declining in January, with negative 0.8% inflation growth on monthly basis, compared to 0.0% in the previous month, with a negative 0.1% result expected year-on-year.
Also on Thursday, Spain will publish results of its retail activities in December. The country's retail businesses saw a 0.5% monthly growth in November, and a 1.9% expansion when measured annually.
Confidence in Italian manufacturing in January, with a figure due on Thursday, is seen as edging higher to 98.5 from 97.5 recorded in December.
Spain's statistical office will release preliminary figures for fourth-quarter GDP on Friday. The quarterly result is expected to show 0.6% growth and better than 0.5% expansion in the third quarter, quarter-on-quarter, while 1.9% GDP growth is seen on annual basis, compared with the previous quarter's 1.6% year-on-year growth.
Unemployment in the euro zone is expected to remain at the same 11.5% level in December like in the previous month.
The single currency zone will also report its preliminary inflation data for January on Friday, with prices expected to fall a further 0.5%, year-on-year, from a 0.2% fall reported in December.
Other events of the week
ECB Executive Board member Yves Mersch and Bundesbank board member Carl-Ludwig Thiele are scheduled to speak at the "New Face of Euro" exhibition in Osnabrueck, Germany, on Sunday.
Eurogroup (euro area finance ministers) will meet on Monday to discuss the results of Greece’s elections and the country’s bailout program.
ECOFIN (euro zone's economy and finance ministers) members will speak on Tuesday about the economic situation in Ukraine, as well as debate European Commission President Jean-Claude Juncker’s proposal for a €315 billion investment program.
The 19th Global Securities Finance Summit 2015 will begin on Wednesday in Luxembourg. The Organization for Economic Co-operation and Development's (OECD) Chief Economist and Head of the Economics Department Catherine Mann and European Central Bank (ECB) executive board member Peter Praet (scheduled for Thursday) are among the speakers.
Also on Wednesday, ECB Governing Council member and Bank of Spain Governor Luis Maria Linde is scheduled to speak at an event hosted by Fundacion de Estudios Financieros in Madrid.
On Thursday, Italy’s presidential electoral college will hold the first round of voting in electing a successor to President Giorgio Napolitano, who resigned as head of state earlier this month. A two-thirds majority of members of parliament and regional delegates is required in the first three rounds. The voting is expected to continue on Friday or longer.
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Greek Election Likely to Have Muted Effect on Markets
As Greece goes to the polls Sunday, investors are bracing for a volatile reaction in markets. But some analysts say the wider impact is likely to be contained.
The results of the vote are all-important for the future of Greece, but their broader effects will be cushioned both by Greece’s isolation from the euro-zone financial system and by the massive program of bond-buying launched by the European Central Bank on Thursday, said Lucy O’Carroll, an economist at Aberdeen Asset Management.
“The contagion is not completely gone,” she said. “But it is reduced.”
Analysts at AXA Investment Management said markets could be volatile in the aftermath. “The uncertainty caused by negotiations between Greece and international lenders is likely to take its toll on risk assets, in the euro area at least."
But they added that even if the radical leftist Syriza party wins on Sunday, Greece’s elections are likely to have either a “marginal” effect or “no material impact on the rest of the euro area.”
Carlo Messina, chief executive of Italy’s Intesa Sanpaolo SpA, said in an interview that he isn’t worried about any market fallout from the vote. He said the ECB’s plans for quantitative easing will provide breathing room for markets and introduces the possibility of a modest debt restructuring that would avoid a Greek exit from the eurozone. “I don’t think this will be a major point,” he said of Sunday’s elections.
Markets in Europe are still digesting the full impact of the ECB’s announcement of quantitative easing, which itself came just days after the Swiss National Bank shocked markets by removing the Swiss franc’s cap against the euro, sending the single currency plunging in the days since.
In the 2½ years since Greece’s government last collapsed, Europe’s banks have slashed their exposure to the country’s banks and sovereign debt and the region’s other struggling economies have made significant steps toward stability.
Greece’s borrowing costs have decoupled decisively from those of Portugal, Ireland and Spain, which recently reached record lows even before the ECB announced it would start monthly purchases of €50 billion ($56 billion) in sovereign bonds.
By contrast, markets are still demanding a yield of 10% to lend to Greece for 2½ years, whereas its 10-year bonds are paying yields of around 8%. Markets often charge more to lend short-term when investors are worried about the prospect of a default.
Markets shouldn’t write off the possibility of some contagion from Greece, said Peter Westaway, chief economist at Vanguard Asset Management in Europe. “Greece is still a little bit ringfenced now... there’s almost a complacent view that Greece is completely off the radar,” he said. “A damaging exit from the euro is not out of the question,” he added.
Mark Burgess, chief investment officer of Threadneedle Investments, warned, “If Syriza does not cooperate, Germany may feel that it can ask Greece to leave the eurozone.”
A spokeswoman for Syriza denied that any victory by the party would be taken badly by markets. “Our victory will mark the beginning of a different era, for the whole of Europe, in which economic growth and development will take the place of austerity measures,” she said.
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