Technical and Market Analysis by Vistabrokers - page 10
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Market Pulse 05.02
On Thursday, the economic calendar is not too saturated, but many publications are quite important and can affect the dynamics of currency pairs. In the UK, the central bank will announce the decision on interest rates, in Canada and the US data on trade balance will be published. And, of course, the market will wait for data on the number of applications for unemployment benefits in the United States.
7:00 ** Factory Orders - December (Germany)
Moderate impact on the market (EUR). Factory orders is often a leading indicator of the industrial production dynamics for several months. Positive data are favorable for the euro, and in December, analysts expect the rate growth.
12:00 *** Bank of England Interest Rate Decision - February (UK)
12:00 *** Bank of England Interest Rate Decision - February (UK)
12:00 *** MPC Rate Statement - February (UK)
Strong impact on the market (GPB). The market does not expect any surprises from the Bank of England, though, judging by recent events, investors' expectations are not always met with reality. For example, nobody has expected the rate reducing by 0.25 percentage points from the Reserve Bank of Australia or strict franc/euro peg refusal from the Bank of Switzerland.
13:30 *** Trade Balance - December (Canada)
13:30 *** Trade Balance - December (US)
Strong impact on the market (CAD, USD). Trade balance is the difference between export and import . Positive value is favorable for the national currency, reflecting the inflow of money into the country.
13:30 *** Unemployment Claims - January (USA)
13:30 ** Continuing Claims - January (USA)
13:30 ** Prelim Nonfarm Productivity - Q4 (USA)
13:30 ** Prelim Unit Labor Costs - Q4 (USA)
Strong impact on the market (USD). Data on the US labor market often have a significant impact on the market. Analysts expect that during the reporting week, the number of initial claims for benefits was increasing, and if the data is better than forecasts, it can support the dollar.
www.vistabrokers.com
Vista Brokers: Greeceis in Market Focus Again
As Vista Brokers analysts have predicted, the euro is very sensitive to any news on Greece. Earlier this week, the single currency was supported when the Greek government has put forward a constructive proposal for a partial exchange of debt for growth-linked bonds. The authorities in Athens have also hold some meetings with representatives of international lenders to discuss the proposal, and investors have gotten a hope for a positive solution of the situation in Greece.
But on Wednesday night, the European Central Bank announced that from now Greek bonds will not be accepted as collateral for loans from the central bank. Amid this news EUR/USD dropped from 1.1483 to 1.1391. On Thursday morning, the pair rebounded slightly, and then continued to decline.
The ECB's decision was a surprise for the market because after the meeting with the ECB president Mario Draghi Greek Finance Minister Janis Varufakis said that the central bank would "whatever it takes" support each member country, including Greece. But it seems that the meeting of Varufakis and Draghi was not as efficient as it seemed to the Minister of Finance.
Experts believe that in this way the ECB wants to put pressure on the Greek government and force it to agree with the terms of the old loan program, which include austerity for the country. The decision of the central bank increases the uncertainty in the "Greek problem", because now for a safe way out, Athens will need to overcome this obstacle too.
The ECB decision had an impact on the stock markets. Both in Europe and in Asia the major stock indexes opened on Thursday with a reduction. Britain's FTSE lost 0.6%, German DAX - 0.9%, the French CAC - 1.1%. In Japan, the Nikkei, which on Wednesday scored 2%, now went down by 0.8%. The index of Asia-Pacific region excluding Japan MSCI fell by 0.1% after rising by 1% a day earlier.
www.vistabrokers.com
GBP / USD. Cable isTestingTrendLine
The Bank of England decided not to go on a leash of "alarmists" and to keep rates at the usual level (0.5%). As it was expected, in the case of keeping the monetary policy unchanged (in a context of easing policy by some other central banks in order to achieve inflation growth) GBP/USD has gotten a good chance to continue the correction growth. This is what we saw yesterday - "cable" in the moment has added a figure closing the day very confident. However, the way up is thorny, because for its continuation the pair needs to overcome serious obstacles in terms of technology and not only. On the one hand, the reversal graphic figure "Inverted Head and Shoulders" that we have mentioned in the previous review was formed, however, the minimum growth target is not reached yet. It does not pay to persist in such situation, because the tested line of over a six-month downtrend is a very strong deterrent and very important for the market.
What we should expect now? The answer is - wait for data on the US labor market, because in fact they will determine the future dynamics of the dollar with respect to any and all competitors. To break through the trend line values should be weak and far from forecasts, which call into question the further Fed tightening. In this case, the first target of the growth will be 61.8% of the descent of December 2014 - January 2015, where is also a target to work with our «Head-n-Shoulders» - 1.5465. Rebound from the trend on positive data can once again lead quotes to 1.50.
USD/CAD.At theCrossroads
A correlation of the pair quotes with the dynamics of oil prices is one of the determining factors. We note that Canada is one of the leading oil exporters in the world and the impact of changes in hydrocarbon prices for the country's economy can not be overestimated. Thus, the decrease under the correction of large-scale growth in January has almost reached the 38.2% Fibonacci correction, which can be a deterrent to further price declining, and where a new impulse wave to new multi-year highs can begin to form. There is a high probability that a lot can be solved today, while the ministries of Canada and the United States will simultaneously publish data on the labor market in January: the unemployment rate and the number of new jobs.
Above mentioned statistics (13.30 GMT) will be a signal for many market players to enter the market. We do not recommend to enter directly at the time of publication due to possible problems with excessive volatility, but to place pending orders for the breakdown at the nearest minimum - 1.2350 and maximum - 1.2591. Setting targets in case of the activation of orders will depend on the future price, and considering the possible scale of the movement it does not pay to hurry.
www.vistabrokers.com
Vista Brokers: Winter Economic ForecastStimulatedEurotoIncrease
Thursday morning began with the reduction of the euro on news that the ECB no longer accept Greek government bonds as collateral that significantly limit the ability of credit for the Greek financial system. Information overwhelmed market participants who only had cheered up after the news of Athens negotiations with international creditors.
However, as Vista Brokers analysts say, the euro decline did not last long - the currency returned to growth versus the US dollar after the European Commission has improved its forecast for economic growth in the eurozone. Now the EC considers that in 2015 the GDP of the monetary union will increase by 1.3% against the previous forecast of 1.1%, and in 2016 - by 1.9%. The forecast for unemployment rate has also been reduced from 11.3% to 11.2%.
However, there was a negative aspect: the experts expect the inflation to reduce by 0.1% in 2015, and if the forecast is justified, for the euro area this will be the first deflation in its history.
However, after the announcement of the European Commission updated forecasts, the euro rose to $ 1.1425 from $ 1.1344 at the close of US trading session on Wednesday. In addition, the euro rose by more than 1% in the pair with the Swiss franc. Analysts report that the Swiss National Bank buys back the single currency to weaken the franc.
Among important statistics of the day we can note results of the Bank of England meeting. Asit was expected the British central bank has left interest rates unchanged at -0.5%. Amid this news pound strengthened to a maximum of three weeks against the dollar.
www.vistabrokers.com
Market Pulse 06.02
On Friday, New Zealand is celebrating Treaty of Waitangi, Australia has already published the RBA Monetary Policy Statement for Q1 2015. The day will be rather active and full with important statistics, especially in Canada and in the United States.
7:00 ** Industrial Production - December (Germany)
Moderate impact on the market (EUR). Analysts predict a slight increase in German industrial production in December. Rate increase or exceeding the forecast is favorable for the currency.
9:30 ** Visible Trade Balance - December (UK)
9:30 ** Trade Balance Non EU - December (UK)
Moderate impact on the market (GPB). Trade balance is the difference between exports and imports. High values are favorable for the currency, because they reflect a smaller money outflow from the country (as a rule, Britain suffers from a deficit).
13:30 *** Building Permits - December (Canada)
13:30 *** Unemployment Rate - January (Canada)
13:30 *** Employment Change - January (Canada)
13:30 ** Full Time Employment Change - January (Canada)
13:30 ** Part Time Employment Change - January (Canada)
Strong impact on the market (CAD). Analysts expect the oppositely directed data. Growth in building permits and the number of employees can have a positive impact on the Canadian dollar. However, the unemployment rate is expected to rise by 0.1%.
13:30 *** Unemployment Rate - January (USA)
13:30 *** Non-Farm Employment Change- January (USA)
13:30 ** Change in Private Payrolls - January (USA)
13:30 ** Change in Manufacturing Payrolls - January (USA)
13:30 ** Average Hourly Earnings - January (USA)
13:30 ** Participation Rate - January (USA)
13:30 ** Two-Month Payroll Net Revision - January (USA)
13:30 ** Establishment Employment Survey Annual Revisions - January (USA)
Strong impact on the market (USD). A large portion of data on the labor market may increase the volatility of the market. In general, analysts expect not too positive data.
17:45 ** FOMC Member Dennis Lockhart Speaks - February (USA)
Moderate impact on the market (USD). Dennis Lockhart is the head of the Federal Reserve Bank of Atlanta and a voting member of the FOMC, that why his opinion affects the monetary policy committee, so Lockhart comments can cause volatility in the markets.
www.vistabrokers.com
Vista Brokers: Possible Fed Rates Increase is Long-term Support Factor for Dollar
On Thursday, yet another central bank has decided to decrease interest rates - Bank of Denmark has lowered the deposit rate from -0.50% to -0.75%. It is noteworthy that for the Kingdom it is the fourth decline in the past three weeks. Thus the regulator is trying to deal with the strengthening of the Danish krone against the euro.
So far, the Fed remains the only regulator of largest world's economies, tuned to the increase in rates, and it will provide support to the US dollar in the long run.
Vista Brokers analysts point out that this has started for the index of the US currency with increase by 5% in January, which is the largest monthly increase since May 2012. Investors have expected that some central banks announce new measures of monetary policy easing, while the Federal Reserve keeps course of its tightening.
Such is indeed the case. In mid-January, the SNB released franc to the "free floating". In late January, the ECB made a statement about the launch of an ambitious quantitative easing program. And then one by one the world's banks began to cut rates. The biggest surprise for the market was the rate cut by the Reserve Bank of Australia to a record low 2.25%. Immediately thereafter, the Australian dollar plummeted to a new low of 5.5 years, and the stock market rose to a peak of May 2008.
The Canadian dollar also fell to five-year low against the US dollar after the Bank of Canada has cut its main rate to 0.75%. Analysts believe that in this way the bank, which never cut interest rates since 2010, is protecting from lower oil prices. This resource takes a large share of exports in Canada and Australia.
Thus, the difference between the monetary policy of the Fed and other banks diverges more and more, contributing to the strengthening of the dollar. But does the Fed really ready to raise interest rates? At this point there are different opinions. For example, billionaire Warren Buffett said that for the Fed it would be "very difficult" to raise rates this year because of too strong dollar.
And experts of Congress Budget Office (CBO) believe that the United States may "save" more than $ 2.3 trillion, if interest rates will be holden at current levels until 2025. They point out that the preservation of US interest rates at a low level in the coming years may restrain the growth of the budget deficit and debt load.
Meanwhile, the market expects that the Fed will raise rates as early as mid-2015.
www.vistabrokers.com
Vista Brokers: MarketsWait for USLaborMarketData
During the US trading session on Friday a large portion of data on the US labor market will be published. Among it is closely monitored by the market non-farm payrolls. Vista Brokers analysts note that in anticipation of the important statistics, market participants are not very active. Euro this morning is declining against the dollar after having surged 1.2% the previous day. The growth is observed in the Asian stock markets.
Analysts expect that the number of people employed in the non-agricultural sector of the US has rose in January by 234,000 after the December growth by 252,000. Perhaps this will be the 12th consecutive month, when non-farm payrolls grows by more than 200,000 per month, and the US economy has not seen such situation since 1994. There are also more bold predictions. For example, chief forex analyst at Standard Chartered Callum Henderson believes that the indicator will rise by 260,000 in January. The growth rate and the excess of the forecast will strengthen investors' expectations about the Fed raising interest rates later this year.
www.vistabrokers.com
GOLD.Is NextMove forBulls?!..
We did not trade actively in gold with good reason, first of all, to set the record straight on the future dynamics of the yellow metal. On the one hand, the correction looked a little unfinished due to the fact that the trend line has not been achieved, while on the other – the data on the US labor market had to affect on the dynamics of prices. Here we had some surprises. Non-farm payrolls grew in January much higher than it has been predicted and December values were revised from 352 thousand up to 329. As a result, quotes lost about $ 30 from the Friday's opening price and found a support at the above-mentioned trend line of growth in November 2014 - January 2015. Moreover, here is passing a 50% correction of the last upward wave in January.
At this stage, despite a very strong technical support, it is recommended to wait for signs of growth (eg, from indicators - as the price intersection of moving average) before opening long positions. If an acknowledgment is received, the stop loss should be placed under a Friday minimum (1228.00), and the first target will be a maximum of the last 6 months - 1308 dollars per troy ounce.
USD/JPY. DollarHit Ceiling
Statistics published by the US Department of Labor on Friday, apparently caused the most positive emotions of market players as for the US economy health. As a result, USD/JPY quotes in a few minutes have overcome a series of restrain levels and continued to grow almost to the end of the week trading. Perhaps the only limiting factor was the achievement of the upper boundary of a graphic consolidation figure "triangle", which was formed during the two-month correction to the last wave of growth. Thus, the only thing the price should do is to pass this line of resistance, and then the maximum number of participants will join to the movement.
Previously, we have called 120.69 a possible growth target, where the extension level 161.8% of the growth in the middle of January passes. This target remains relevant (its value is the same as another local resistance level at around 120.81), but it is not a right time for the next wave of purchases. For this is definitely worth to wait for a break of Friday's extreme values (119.20).
www.vistabrokers.com
Market Pulse 09.02
On Monday, the economic calendar is almost empty. Today the ECB President Mario Draghi speeks, as well as the Bank of England Governor Mark Carney. In Turkey opens the G20 meetings.
6:00 ** Eco Watchers Survey: Current - January (Japan)
6:00 ** Eco Watchers Survey: Outlook - January (Japan)
Moderate impact on the market (JPY). For both indices, analysts expect a small growth, although these indices rarely have an impact on the yen. They are based on a survey of workers engaged in services.
6:40 *** BOE Governor Mark Carney Speaks - February (UK)
Strong impact on the market (GPB). Carney comments about the economic situation, the real estate market, inflation etc can significantly affect the pound.
7:00 **TradeBalance - December (Germany)
Moderate impact on the market (EUR). Trade balance is the difference between exports and imports for the period. Positive values are favorable for the currency, because they reflect the flow of money into the country.
** ECB President Mario Draghi Speaks
** G20 Meetings - Day 1
www.vistabrokers.com
Vista Brokers: Strong Labor Market Data Strengthened Expectations for Fed Rate Hike
On Friday, the dollar has gotten a support after strong employment data in the United States. Immediately after the non-farm payrolls publication US currency rose against the Japanese one from 117.22 to 118.38 yen. The EUR/USD at the end of the day has lost about 1%, dropping to $ 1.1365. Vista Brokers analysts note that jobs data, as well as a number of other, less important indicators were published more than expected and this strengthen market expectations about the Fed rate hike.
Thus, the number of people employed in the US non-agricultural sector in January has risen by 257,000, versus the expected 236 000. Data for December were revised with an increase from 252 000 to 329 000. In the private and business sectors of the economy the number of jobs also increased more than analysts have expected. Average hourly earnings rose by 0.5% month on month and 2.2% year on year, against forecasts of 0.3% and 1.9%, respectively. The participation rate has also increased.
The only negative of a large portion of statistics was an unexpected increase in the unemployment rate from 5.6% to 5.7%. Analysts had expected the unemployment rate in January will remain the same.
Experts point out that the positive labor market data is a serious ground to believe that the Fed will begin to raise interest rates in the middle of this year. Over the past three months, the US economy has created over a million jobs, and such a high result, the country has not seen since 1997. In addition, January marked the 11th straight month of job gains above 200,000, the longest streak since 1994.
www.vistabrokers.com