Eur/usd - page 220
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I think we will see a narrow range until the end of the week
EUR/USD: Euro Prints Fresh Intraday Lows Amid Greek Tragedy
The euro dropped to intraday lows on Friday and was trading below the $1.1300 after comments from Greek Finance Minister Varoufakis said that Greece will not cooperate with troika representatives.
The euro printed new lows below the $1.13 handle as the situation in Greece is deteriorating rapidly again making it look like the Greek tragedy will continue.
During the US trading session, EUR/USD was trading at $1.1290, down 0.22% on the day. The pair was dragged lower also by disappointing US GDP figures, which prompted the risk-off trading and favored the greenback.
The latest report from the Bureau of Economic Analysis showed that the US economy grew only 2.6%, missing the forecast of 3.0% and registered only a half of the 5.0% growth in the previous quarter.
Moreover, the annualized GDP price index fell to 0.0%, well below the expectations of a 0.9% print and also down from the latest reading of 1.4%.
In spite of the slight revival in the euro's performance this week, analysts say the currency is set to decline further and reach parity versus the US dollar, with the threat of deflation looming on the horizon and massive money printing already approved by the European Central bank policymakers.
"We have revised our forecast trajectory lower for EURUSD and now expect the pair to reach parity by Q1 2016," BNP Paribas wrote in a note on Friday.
Technical analysis
The scenario from the beginning of the week is still valid and working. A possible short-term correction has begun, as an exhaustion gap occurred on Monday.
Prices are poised to spike above $1.14 and eventually above $1.15, before forming a short-term peak of a correction channel, which in an ideal world will be a resistance of a bearish flag correction.
On intraday charts, there is a very clear picture of mild resistance around the 200-period moving average of $1.1400. A possible break above this level will bring a short squeeze and prices move to $1.15 very quickly, due to large short sell interest on the currency cross.
One trading idea is based on this projection and shorting the spikes toward the mid $1.15's and selling into any dips for 50-75 pips scalps should work as long as the downtrend holds.
source
EUR/USD forecast for the week of February 2, 2015
The EUR/USD pair broke higher during the course of the week, but fell at the 1.14 level to turn things back around and form a little bit of a shooting star. That being the case, we feel that the market is going to continue lower, trying to reach the 1.10 level. Ultimately, we believe that rallies continue to offer selling opportunities, and a break below the 1.10 level probably opened the door way to the 1.00 level in the longer run. We have absolutely no interest in buying this pair although we recognize it has been oversold.
source
I wish you all a great weekend.
EU Preview: BoE Rate Decision, PMIs to Dominate Week Ahead
It is more than certain that BoE will keep the interest rate unchanged and maintain the benchmark at a record-low 0.5%, after two policy makers Martin Weale and Ian McCafferty last month re-joined other committee members after five months of a split and gave up their vote for an increase.
Weale and McCafferty had been voting from August through December to increase the rate by 25 basis points. Both policymakers still believe that the current low price pressure is only temporary and that this should not become a self-perpetuating factor within the wider economy.
The current unity on the BoE's MPC, which sees little reason to increase interest rates in the UK, stems from both tame inflation pressures on the mid-term horizon, arising from low oil prices and sterling's appreciation.
BoE reasoning
"For these two MPC members (Weale and McCafferty), the “decision this month was finely balanced”. They still believe that the sharp fall in inflation is driven by temporary factors and also noted that wage growth has been firming. However, they acknowledged “the risk that low inflation might persist for longer than the temporary factors implied and concluded that this risk would be increased by an increase in Bank Rate at the current juncture,” Howard Archer, Chief UK & European Economist with IHS Global Insight, wrote in a note to clients.
The minutes also revealed a downward revision to the near term inflation, saying it should reach rock bottom at the 2015 start, while some upside risks remained for the medium term inflation.
All the members raised concerns that “it was possible that the risks to CPI inflation in the medium term might have, if anything, shifted to the upside, but all the members were also alert to the downside risk of current low inflation becoming entrenched.”
"Bank of England Governor Mark Carney has recently said that the sharp fall in oil prices should not determine the medium-term path of UK monetary policy given continued robust economic growth and rising wages so it is “appropriate” to look through very low inflation – or even possible mild deflation – in the near term," Archer continued in his note.
"He stated that consumer price inflation was likely to return to its 2.0% target rate within two years which is “consistent with some modest, limited, gradual increases in interest rates over the course of the next three years.”
January PMIs
A set of final manufacturing PMIs for the UK, Germany, France, Italy, Spain and the euro zone will be released on Monday, indicating the direction of economies in the euro zone.
Services sector PMIs for the same set of countries will be published on Wednesday.
The euro zone flash manufacturing PMI in January came at 51.0 and the same result is expected in the final print. The services sector reported 52.3 last time, with the same number expected as a final result.
January's flash PMI for Germany's manufacturing sector activity recorded 51.0, a preliminary survey from Markit Economics revealed, with the indicator expected to hold in the final result. The PMI for the euro area's number one economy's services sector showed 52.7 points in the first month of the year, with the same figure expected in the final result.
Manufacturing PMI for January for the UK is expected to tick up to 52.8 from an earlier reported 52.5, while the services PMI is also seen as gaining to 56.5 from the 55.8 booked in the previous cycle.
Apart from manufacturing and services data, the UK will report on its construction sector on Tuesday, with the figure expected to stay well in expansion at 56.9, albeit less than the previous 57.6 result.
According to the preliminary PMI reading, France's factories remained in contraction territory at 49.5, while the services sector is also seen in contraction territory, with the flash figure at 49.5.
January's manufacturing PMI for Italy is also due on Monday, while the services sector result will be reported on Wednesday.
Manufacturing PMI for Spain was at 53.8 in December, while services PMI came at 54.3 a month ago. Both indicators are expected to sit firmly in expansion territory.
Macroeconomic Data
Spain will report its January labor data on Monday. The number of registered unemployed in Spain declined in December, with 64,400 workers excluded from the official jobless count.
On Tuesday, Italy will publish its fresh January inflation data. In December, consumer prices in the country stagnated both on a monthly as well as an annual basis.
EU December retail figures will be published on Wednesday. Retail activity is seen as declining 0.2% month-on-month in the reported period, after 0.6% growth in November, while growing 1.5% annually.
Also on Friday, Spain will release its industrial production data for the tenth month of the year. Spanish industries saw their production growing 3.6% on a monthly basis in September and 1.0% annually.
EU October retail figures will be published on the same day. Retail activity is seen as growing 0.5% month-on-month in the reported period, after 1.3% contraction in September, while growing 0.6% annually.
Germany will report the state of its December factory orders on Thursday, with 0.8% monthly growth expected in the final month of the year, and 0.1% annually. The country reported 2.4% negative growth in orders in November, month-on-month, while it saw a 0.4% contraction on an annual basis.
A day later, on Friday, Germany will report the results of industrial production in December, with 0.4% growth seen month-on-month, compared to 0.1% decline registered in November, while 0.6% decline year-on-year, after -0.5% seen a month ago.
Spain will also publish its December industrial production figures on Friday. In November, Spanish factories saw negative 0.1% growth, while stagnation when measured annually.
Other events of the week
On Monday, European central bankers are scheduled to meet in Budapest for a conference hosted by Hungarian central bank chief Gyorgy Matolcsy. ECB Governing Council member and Austrian central bank Chief Ewald Nowotny will deliver a speech on monetary policy at Budapest’s Central European University.
New Greek Finance Minister Yanis Varoufakis will travel to the UK and France to meet his counterparts there, followed by his visit to Italy on Tuesday.
Lawmakers in Greece's Parliament will gather for a vote of confidence after the January 25 general elections, in which the leftist Syriza party led by new Prime Minister Alexis Tsipras won.
Also on Thursday, the European Central Bank (ECB) will release its economic bulletin, which is now published every six weeks.
ECB Chief Economist Peter Praet gives the keynote speech on the same day at the 8th joint event on Sovereign Risk and Macroeconomics, organized by the Peterson Institute for International Economics and Moody’s Investors Service in Frankfurt.
NATO defense ministers will meet in Brussels to address the escalating situation in Ukraine.
The Munich Security Conference, a three-day annual meeting of security and foreign-policy leaders begins on Friday. German Chancellor Angela Merkel, US Secretary of State John Kerry, Ukrainian President Petro Poroshenko, Russian Foreign Minister Sergei Lavrov and Iraqi Prime Minister Haider al-Abadi are expected to attend.
source
EUR/USD weekly outlook: February 2 - 6
The euro dipped against the dollar and yen on Friday, after data showed that deflation in the single currency bloc deepened in January and amid growing concerns over Greece's future in the euro zone.
Eurostat said that the annual rate of euro zone inflation fell by 0.6% in January, after a 0.2% slip in December. Economists had expected an annual decline of 0.5%.
Meanwhile, Greece’s new government said it will not cooperate with the International Monetary Fund and the European Union and will not seek an extension to its bailout program, underlining fears over a clash with its international creditors.
EUR/USD fell 0.27% to close at 1.1287. For the week, the pair rose 0.71%, the first weekly gain in seven weeks.
The euro ended the month down 6.71% against the dollar after European Central Bank unveiled a €1.2 trillion quantitative easing program last week.
Elsewhere, EUR/GBP dipped 0.21% to settle at 0.7496 on Friday, paring the week’s gains to 0.19%, while EUR/JPY slumped 0.93% to close at 132.66.
Meanwhile, the dollar remained in demand as investors reacted to data showing the U.S. economy grew less than expected in the fourth quarter.
The Commerce Department said in a report that the economy expanded 2.6% in the final three months of 2014, below expectations for a 3.0% gain and slowing sharply from growth of 5.0% in the three months to September.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the week at 95.00, down 0.01% for the day and 0.33% lower on the week.
The dollar had strengthened broadly on Thursday after the Federal Reserve indicated that interest rates could start to rise around mid-year.
Following its policy meeting on Wednesday, the Fed said it would keep rates on hold at least until June and reiterated its pledge to be patient on raising interest rates, while acknowledging the solid economic recovery and strong growth in the labor market.
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EUR is dead...
EUR/USD: Euro Stuck at $1.1300, PMIs Eyed
he euro-dollar pair remained close to its 12-year lows as February trading kicked off, stalling around the $1.1300 mark, while the low stands at $1.11, reached last week.
During the early European trading on Monday, the pair was seen trading at $1.1310, only marginally higher on the day.
Investors are now waiting for the Purchasing Managers' Indices (PMIs), due later in the session. The manufacturing index for the entire euro zone is expected to print 51, still only slightly above the 50 mark separating contraction and expansion. Falling below this mark would indicate recession levels of manufacturing activity.
The German index is also predicted to stay at 51.
Furthermore, traders are still digesting the outcome of the last Greek elections and the possible impact of the new Greek government on the financial markets. While the uncertainty remains, the euro bounced from its lows and the currency entered into some consolidation. However, further weakness is still possible.
"New Greek finance minister Varoufakis is already setting out on a charm offensive with a tour of European capitals this week, visiting London today, in an attempt to drum up support for Greece’s position in an attempt to exert pressure on Germany to be more accommodative with respect to a change of policy direction. Germany remains, for its part firmly opposed to any form of debt reduction, as do the Finns, and it is these two stances that are becoming increasingly difficult to reconcile given that Greece’s debt is to all intents and purposes unsustainable," analysts at CMC Markets wrote in a note on Monday.
Technical analysis
The scenario from the beginning of the last week is still valid and working. A possible short-term correction has begun, as an exhaustion gap occurred on Monday.
Prices are poised to spike above $1.14 and eventually above $1.15, before forming a short-term peak of a correction channel, which in an ideal world will be the resistance of a bearish flag correction.
On the intraday charts, there is a very clear picture of mild resistance around the 200-hour moving average of $1.1400. A possible break above this level will bring a short squeeze and prices move to $1.15 very quickly, due to large short sell interest on the currency cross.
One trading idea is based on this projection and shorting the spikes toward the mid $1.15's and selling into any dips for 50-75 pips scalps should work as long as the downtrend holds.
source
EURUSD is consolidating in a tight range; it looks like the market is taking a pause to bread as the pair waits for the Friday’s nonfarm payrolls.
the market is almost not moving and there are no opportunities on the pair at the moment.