Technical and Market Analysis by Vistabrokers - page 11
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Vista Brokers: DollarCorrectsafter Friday'sRally
On Friday, the strong data on US labor market caused the dollar's rally against its major competitors. Of course, the growth could not last forever, so on Monday, the EUR/USD is slowly recovering. The market's focus shifted back to Greece, which confirmed its rejection of an international bailout program.
Vista Brokers analysts note that the dollar index today fell against a basket of currencies by 0.2% to 94,535. The euro has lost about 1.5% on Friday and today rose by 0.2% to $ 1.1338. The USD/JPY after the abor market data publication has refreshed its one-month high at around 119.23 and on Monday the pair lost 0.3% and dropped to 118.75 yen. To one-month-high at 1.965% on Friday has jumped the yield on 10-year US "treasuries", which today fell to 1.922%.
Recall that Friday's data showed a rebound in U.S. wages and nonfarm payrolls increasing by 257,000 in January, outstripping forecasts. This reinforced investors' hopes that the Fed will raise rates as early as June of this year.
Having taken a lead from this information in full, the market returned to the painful "Greek question." On Sunday, Greek Prime Minister Alexis Tsipras said that Athens will not ask for extension of the financial aid program, which expires on February 28, despite the pressure from international lenders.
He also reiterated his plans to rebuild the Greek economy, which run counter to the austerity program recommended by the ECB, the EU and the IMF. Tsipras promises to raise the minimum wage, to suspend the privatization, to create new jobs.
At this stage, the new Greek government talks with creditors do not inspire confidence in the successful resolution of the situation. The market was hoping that not having achieved concessions from lenders, Athens will soft its rhetoric and offer a compromise solution, but Tsipras shows a willingness to stay the course.
On Wednesday, Greek Finance Minister Janis Varufakis will speak at an emergency meeting of eurozone finance ministers and will submit proposal for the restructuring of Greek debt. So far, all the proposals of Greece international lenders reject, however today the market is set positive - many believe that as a result of the negotiations Greece will be able to reach a compromise with its lenders.
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Vista Brokers:Aussie Continues toLoseGround
On Monday, the Australian dollar declines against the US one after Friday's strong data on the US labor market, as well as the latest statistics from China. Vista Brokers analysts note that on Sunday in China was published the weak data on the trade balance, import and export. Particularly, in January the volume of import decreased by 19.9%. Exports also fell by 3.3% against the expected growth of 5.8%. Data weighed on commodity currencies and the Asian stock market.
According to analysts, the outlook for the Australian dollar in the long term is now being reconsidered. So, the National Australia Bank lowered its forecast for Aussie at the end of 2015 to $ 0.7400 from $ 0.7800. However, experts consider a scenario in which the currency will fall below $ 0.7000.
NAB also expects at least one more rate cut by the Reserve Bank of Australia this year. RBA Governor Glenn Stevens, speaking on the presentation of the Bank of China in Sydney, preferred to avoid the issue of monetary policy, without giving the market new reasons for excitement.
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GBP / USD. Onthe Frontline
Those market players who are closely monitoring the situation in the GBP/USD, surely have strategic thinking, because in this pair the defense of the dollar is the weakest. Suffice it to recall not only the current resistance trend line testing of the last seven months, but also quite specific positions of the Bank of England in monetary policy. The BOE apparently is not going to implement stimulation measures (as some other central banks did), but on the contrary is the next after the Fed on the list of rate hikes. At the same time, we can not say that technically everything is clearly, because the current correctional increase is difficult to correlate with the direction of the trend, especially since this growth is still within the long-term downtrend. But today some important data in the UK are expected, and this rise to any technical fix progress.
So, at 9.30 GMT we expect data on industrial production in the UK in December, and at 15.00 GMT – the quarterly data on GDP (unofficial) from NIESR. It is likely that if these data will be positive, quotations may again move closely to the trend line. In turn, the breakthrough of 1.5350 will mean a possible offensive full upward correction of the total descent during the period July 2014 - January 2015.
USD/JPY. Technical vs Fundamental Analysis
Current price consolidation near the resistance line, forming a side of either symmetric, or descending triangle (this is, in fact, does not matter) gives a reason to expect some developments in the USD/JPY. Moreover, the same rise in prices, which we have mentioned in the previous review, is already corrected enough to deduct this figure as a trend continuation pattern "flag". Going beyond its boundaries will be one more argument in favor of continuing an upward trend in the pair. From a fundamental point of view, the dollar is still supported by the good statistics on the US labor market and expectations of imminent interest rate increase by the Fed, which will be consistent in its actions and will not sway by insufficient rate of inflation. A nature of inflation reduce is the fall in energy prices and a matter of time.
Whatever reasons are given, the main obstacle to further growth is still the upper limit of the "triangle", and only its sustained break with overcoming level (119.20 - Friday's high) would rely on the consistent achievement of the objectives of growth. Recall, the first of them (120.69) corresponds to 161.8% Fibonacci extension of January pulse. Here goes another level of resistance (120.81) - a local extremum of December 23.
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Market Pulse 10.02
On Tuesday G20 meetings continues in Turkey. Australia has already published the NABbusinessconfidencedata, and China - the consumer price index. Britain and France today will report on changes in the volume of industrial production in December.
7:45 ** Industrial Production - December (France)
Moderate impact on the market (EUR). Often, the production is a small contribution to GDP, but it allows to predict the dynamics of interest rates. In France, analysts expect a small growth of the rate.
9:30 *** Industrial Production - December (UK)
9:30 ** Manufacturing Production - December (UK)
Strong impact on the market (GPB). Growth or exceeded forecasts support the pound. In December, analysts expect a slight growth of both indices.
13:20 ** FOMC Member Jeffrey Lacker Speaks - February (USA)
Moderate impact on the market (USD). Lacker is a voting member of the FOMC, that is, its opinion affects the monetary policy of the Committee, so his comments may cause volatility in the markets.
15:00 ** NIESR GDP Estimate - January (UK)
Moderate impact on the market (GPB). The indicator is based on preliminary data, but it is often close to the official level of GDP, so the market pays attention to it.
15:00 ** JOLTs Job Openings - December (US)
Moderate impact on the market (USD). Publication rarely has an impact on the market, but the growth of this indicator reflects an improvement in the labor market situation, showing a high demand for workers.
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Vista Brokers:This WeekKey FactorsforEUR/USDare Greeceand Eurozone GDP
New trading week the single currency began with a slight increase after Friday lost of about 1.5% against the dollar amid positive data on the US labor market. On Monday growth did not last long, and in the middle of the day EUR/USD dropped to the lower limit of its trading range - 1.1310 amid a negativity from Greece.
Vista Brokers analysts say that in Greece markets are falling and the banking sector is on the brink of disaster. The S&P has downgraded the sovereign credit rating of Greece to B- from B with a negative outlook. Of course, it sows pessimism among investors, causing them to return to the subject of a Greek exit from the eurozone.
According to experts, the "Greek question" will play a big role this week - on Wednesday will be Eurogroup meetings, and on Thursday – the EU Economic Summit, and these events can play a big role in the negotiations. Recall that Athens sought to develop a comprehensive solution to their economic problems, offering international lenders options for restructuring the debt. However, those yet reject all proposals, insisting on extending the program of financial assistance in a tight economy.
An important factor for the euro this week will also be data on Eurozone GDP for the 4th quarter, which will be released on Friday. It is expected that the GDP has risen by 0.2%. Before the publication of data analysts Barclays Bank advise to sell the euro/dollar.
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Vista Brokers: OilDrops AmidIEAForecasts
On Tuesday, oil prices fall amid predictions of increasing production in the United States and the report of the International Energy Agency. Brent futures for March delivery fell to $ 58.58 per barrel, and WTI futures - to $ 52.97 per barrel.
Vista Brokers analysts point out that the International Energy Agency (IEA) forecast has put a pressure on oil prices. According to it the growth in world oil demand in the next 5 years will be only 1.2% per year. It has reminded investors about the problem of weak demand amid oversupply, which in recent months was having a strong pressure on the oil market. IEA expects prices to return above $ 70 a barrel, but it will happen no earlier than in 2020.
However, the International Energy Agency attitude to the situation in the market is quite optimistic. In their view, the market has reached its bottom, and now oil may begin to rise, though very restrained pace. The growth rate of oil supply in the world until 2020 will amount to 860 thousand barrels per day, whereas in 2014 the increase was 1.8 million.
Recall that since the middle of last week, oil prices grew fast after it became known that the number of people working on the rigs in the United States greatly reduced - to the minimum amount since December 2011. Earlier this week it became known that OPEC raised its forecasts for global demand in 2015 to 92.32 million barrels per day (20 barrels compared with the previous forecast). So on Monday the oil market has also increased.
It is also worth noting that Citigroup analysts do not endorse the IEA views that oil prices have reached the bottom, and expect reduction of up to 20 dollars per barrel. Recent price increasing they call a false breakout trend. Experts have lowered their forecasts for 2015 for WTI from $ 55 to $ 46 per barrel and for Brent - from $ 63 to $ 54 per barrel.
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AUD / USD. ReductionTargetsare Worked out. Whatis Next?
We have fixed a rebound from achieved virtually at all significant time intervals corresponding resistance lines of current downward price channels. So channel lines were tested in the long-term, medium-term and short-term timeframes, which led to profit-taking by some market players due to the achievement of target levels. Note that the last powerful reduction wave occurred when the results of the Reserve Bank of Australia meeting have been published, and it became known that RBA had surprisingly decided to reduce the interest rate by 25 basis points to 2.25%. Some experts do not rule out a further decrease in the coming months, but it seems that the market has already taken this factor into account. Moreover, one can not deny the fact that sooner or later, energy prices, will finally grow up, thereby supporting inflation. The sooner it happens, the less chance of further easing by the RBA will remain.
Thus, it is time to cut short positions, and probably to hold hand, responding to coming market data. Among important data we can name tomorrow's publications of unemployment rate and employment change in 00.30 GMT. As expected, the unemployment rate in January has rose to 6.2%, while the number of jobs fell by 4.7 thousand. It is recommended to wait for the market reaction to the statistics, before setting any targets. With all of this, from a technical point of view quotes are now tending to achieve resistance lines, ie, to growth.
EUR / USD.It isGreeceagain
During the last trading weeks EUR/USD quotes did not undergo significant changes. So, after reaching minimum values for more than eleven years (1.1096), the bearish pressure eased somewhat, and now we have so called range trades. While we can not say for sure that the correction is complete, because even in such cases the minimum target level correction (38.2%) of the last large-scale declines in December and January, has not been reached. A tension is feed by the fact that so far the new Greek government can not find common ground with the euro zone leaders. First of all, we are talking about the current program of financial aid for the country. Greece in the person of Prime Minister Tsipras apparently refuses to fulfill its terms, at the same time wanting to get the other loan.
Today, finance ministers of the euro zone will meet on this occasion, which is very important not only from the point of view of the further pair dynamics, but in general, in the context of the fate of Greece as a member of the euro zone and the probability of default in the country. Good news certainly will support the single currency, which may lead quotes to 1.1650, where is the above-mentioned correction 38.2%.
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Market Pulse 11.02
On Wednesday, the economic calendar is almost empty, and the only event that can seriously affect the markets is Eurogroup meetings, where some ways to solve the situation in Greece may be identified. In Japan today, the markets do not work, as the country celebrates National Foundation Day. In the United States during the day will be published a number of data on oil reserves, which can affect the commodity markets.
15:30 ** Crude Oil Inventories - February (USA)
Moderate impact on the market (USD). Changes in the level of crude oil reserves in barrels. This indicator is the benchmark of demand level, as well as a good driver for the oil market.
18:01 ** 10-y Bond Auction - February (USA)
Moderate impact on the market (USD). US Treasury allocates its debt obligations. 10-year bonds are the reference in terms of reflecting the demand and market sentiment. Decline in yield is positive for the currency.
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Vista Brokers: EUR/USDContinuestoSwing
On Tuesday some new facts on Greece negotiations with international creditors became known. Athens offers to save 70% of the current loan program conditions, as well as to attract short-term funding in the amount of 10 billion euros to avoid a credit crunch and buy some time for negotiations.
Vista Brokers analysts note that amid this news, European stock markets has recovered. US dollar and US "treasuries" yield got stronger, thanks to the growing investor confidence that the Fed will raise interest rates this year. Major US stock indexes on Tuesday also showed growth.
As for the EUR/USD, it has continued to "swing". First fell to $ 1.1275 pressurized with concerned investors, and then went back above $ 1.13 after reports of a new stage of negotiations.
Analysts say that today's meeting of the Eurogroup is extremely important event for the market, because some decisions on Greece can be identified, and some comments may be given.
"Greek problem" should be resolved in a short time because on February 28 the program of financial aid ends, and on 1 March Athens will be left without help of lenders. The situation in the money market of the country is critical - the yield of Greek bonds on Monday jumped to 21.74%, the highest since July 2014. If yields remain at such a high level the country will not be available to incur debts.
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Vista Brokers:Aussie IgnoredStrongStatistics
On Wednesday morning, the Australian dollar rose against the US dollar to 0.7797, but quickly returned to Tuesday's closing level - 0.7770. Vista Brokers analysts point out that the positive statistics published by night, could not give Aussie an impetus to growth, as globally the currency is pressured by lower prices for oil and copper.
In particular, it became known that the consumer sentiment index from Wespac and Melbourne Institute rose in February from 93.2 to 100.7, the first time since February 2014 exceeded the level of 100. The volume of mortgage lending in December also rose more than expected and much better than November values. On a monthly basis loans increased by 2.7%, and year over year - by 4.5%. However, analysts believe that the volume of loans has increased, mainly due to speculative investment in real estate.
This week, the Australian dollar may have a good "shake". Tomorrow Australia will publish a number of important data on employment and on inflation expectations. Also within the "currency week" the RBAassistantgovernor Guy Debelle will speak (Wednesday, 22.00 GMT), and the RBA Governor Glenn Stevens will speak in front of a parliamentary committee on regular hearings on monetary policy (Thursday, 22.30 GMT).
Tomorrow's stats unlikely to be on the side of the Aussie - analysts expect that in January the unemployment rate in Australia rose from 6.1% to 6.2%, while the number of employees decreased due to cuts in production. According to forecasts of the RBA, unemployment in the country will rise gradually to 6.5% and will remain close to this level of the entire 2016, and only in 2017 will fall to previous levels.
It is likely that RBA Governor Glenn Stevens in his speech will give gloomy forecasts for the Australian economy, supporting market expectations of further interest rate cuts.
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