Technical and Market Analysis by Vistabrokers - page 21
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
GBP / USD. Reducing Gains Momentum
A next support level for GBP / USD (1.4813 – a minimum since June 2010) has been broken, while the movement of the pair gains momentum, despite a lack of visible weakness of the British pound. It is commonly believed that it is all the fault of the strong dollar, because the US economy is now the most confident among other developed countries and this gives reasons to expect from the Fed some steps of the monetary policy tightening in the near future. Yield is always at the head for investors, so the dollar is now enjoying the highest demand.
Reducing still takes place within a well-shaped channel with a tendency to accelerate, and we should use it for classical work with the trend, but do not forget about the impending Federal Reserve meeting (will complete on Wednesday), which is much expected. This can cause market players to take profits on short positions, which may positively affect the dynamics of the pair. In this case, the 1.4230 mark (minimum since May 2010) remains a long-term target.
USD / JPY. WhatGamesareJapaneseOfficialsPlaying?
A direction of long-term and short-term channels is still upward. Tomorrow we expect the Bank of Japan meeting, which may surprise the market (this has happened more than once), especially after a number of high-ranking officials have repeatedly voiced a new rhetoric in their interviews with the media, as well as in public speeches. According to this rhetoric, the BoJ will no longer expand the asset repurchase program. Moreover, the current exchange rate is acceptable, but a further drop is undesirable due to increased cost of imports and consumer activity reducing.
It is recommended to be out of the market until BoJ meeting results will be published and its head Haruhiko Kuroda will end the following press conference. If the accompanying statement will not contain harsh statements to stabilize the yen, growth within the existing channel may continue. Otherwise, we expect the correction to the lower medium-term channel boundary to the level of 120 yen per dollar.
www.vistabrokers.com
Vista Brokers:DollarContinued toFortifyitsPositions
On Friday, the US currency was strengthening against its major counterparts in Forex, amid expectations associated with the Fed interest rates hike in June. Vista Brokers analysts say that the euro against the dollar has tested the level of a 12-year low below 1.05, closing the last trading week trading at around 1.05. The growth of the US dollar has also influenced stock and commodity markets.
Over the past week, the dollar index has risen by more than 2%, due to expectations that the US Federal Reserve will tighten its monetary policy in a few months. Due to the greenback's strengthening, stocks and resources are reducing in price. MSCI All-Country World equity index has fallen on Friday by 0.8%, the index of developing countries - by 1%. European stock markets have gotten a support from the ECB quantitative easing program launching, so that the FTS Eurofirst 300 index was down only by 0.1%. Yields of bonds in the euro zone has dropped to record lows, due to the asset repurchase program.
It is also worth noting that the US stock indexes went down due to low oil prices, which, in turn, puts pressure on energy stocks. Thus, S & P 500, decreases the third consecutive week. Currently it is about 3% below the record level having set in March. Meanwhile, the yield of American treasuries is growing - on Friday it has increased to 2.0998% from 2.096% on Thursday.
www.vistabrokers.com
Vista Brokers:EuroFell below $1.0500
On Monday, the single currency has dropped again after a weak attempt to grow on Friday evening. Vista Brokers analysts point out that the euro has experienced a short period of growth above $ 1.0600, but sentiment on the currency remains bearish, and today during the Asian session, the euro fell to $ 1.0457 (a minimum since January 2003).
Last week, the euro fell by 3.2%, which is the largest weekly drop since September 2011. The single currency is pressured by the ECB quantitative easing program, which implies the purchase of assets for an overall amount of 1.1 trillion euros to stimulate the economy in the euro zone.
Also, the difference between monetary policies of the ECB and the Fed is growing, because the US controller has closed its QE program and is now preparing for a gradual interest rates hike. Investors expect that this process will begin in June, as the latest statistics give quite clearly signals of the US economic recovery. Because of this, the dollar index was growing last week. On Monday, the DXY is at 12-year high of 100,420.
Note that the pressure on the euro still has the situation in Greece with its economic problems and possible exit from the euro zone. Yes, in late February, Athens has negotiated with creditors (ECB, EU and IMF) to extend financial bailout program for 4 months, but the reform plan has not been approved yet - all Greek offers of debt restructuring are rejected.
Analysts believe that both Athens and Brussels are ready to compromise - the only question is how long negotiations will take. As a result, it is likely that Greece's debt burden will decrease, and by reducing payments on loans, the Greeks will be able to spend more on the economy development and preventing a humanitarian catastrophe, which now hangs over the country. It is clear that Athens will not refuse from reforms, but a radical party Syriza will try to reduce them to a minimum and to slow down the implementation of reforms, because otherwise it will lose its popularity among Greek people.
www.vistabrokers.com
Market Pulse 16.03
Monday is not full of important information. Statistics, which can have a moderate impact on the market, will be released in the US and Switzerland. In Europe Mario Draghi will speak, and it, perhaps, will be the most interesting event of the day.
9:15 ** Producer & Import Prices - February (Switzerland)
9:15 ** Retail Sales - January (Switzerland)
Moderate impact on the market (CHF). Predictions for these two indicators are rather optimistic. It is expected that after a January's decline, the producer &importprices index in Switzerland will increase by 0.4%.
12:30 ** Empire State Manufacturing Index - March (USA)
Moderate impact on the market (USD). The indicator is based on a survey of New York FRB district manufacturers. It is now at a high level, and in March, analysts expect the growth, which could support the dollar.
13:15 ** CapacityUtilization - February (USA)
13:15 ** Industrial Production - February (USA)
Moderate impact on the market (USD). Capacity utilization allows us to estimate how much free capacity the economy has. The indicator is very close to the level of 80%, which is considered dangerous for the development of the inflationary pressure. With regard to the volume of industrial production, experts expect a small growth of the rate.
14:00 ** NAHB Housing Market Index - March (USA)
Moderate impact on the market (USD). It is the indicator of developers' confidence, measuring by NAHB, based on a survey of 900 developers in respect of current and future sales of private homes.
18:45 *** ECB President Mario Draghi Speaks - March (euro zone)
Strong impact on the market (EUR). Draghi comments can significantly affect the single currency as market participants are looking for signals for further action of the European Central Bank in the speech.
www.vistabrokers.com
GBP / USD.It is Better to Stayout of theMarket
GBP / USD has returned above a significant support level of 1.4813 (2013 minimum) which has been overcome on Friday. Prices are climbing to an upper border of a descending channel, and sellers may likely use this situation soon. However, it will unlikely happen until tomorrow's Bank of England meeting minutes publication, from which the market will receive the information regarding the power balance in the Bank's direction. Namely, it will be clear how many members actually voted for keeping interest rates unchanged. Also some details of the meeting may be very interesting.
It is recommended to fix results of open positions and wait for the publication of above mentioned minutes. We should also note that tomorrow results of the Fed meeting will be announced, and it will clearly affect the dynamics of the pair. So, given risks of increased volatility amid the low liquidity, there is every reason to stay out of the market tomorrow.
EUR / USD.It isTime toRest
Having reached a lowest level of more than 12 years (1.0460) on Friday, the euro is gradually restoring against the US dollar. At the moment, the pair is at 1.06, and there is few reasons for this decrease in bears' activity. Among them is achieving of a long-term downtrend channel, history of which dates back to a record high of the pair in July 2008. It is likely that some market players will prefer to fix their current results on open positions here, at least until tomorrow's FOMC decision announcement. As expected, details of the FOMC meeting can be interesting, because no one believes that the regulator is ready for concrete steps in the form of rates hike right now, but the Fed should start to prepare the market for its further decisions. It is likely, that today ZEW indexes and the February consumer price index in the euro zone will have some influence on the market.
We will analyze an accompanying statement, that will be published after the FOMCratedecision tomorrow and consider a particular scenario for future EUR / USD dynamics. Meanwhile, it is recommended to close short positions.
www.vistabrokers.com
Vista Brokers: RBAMeeting Minutes Publication PutPressure on Aussie
On Tuesday, the Australian dollar has dropped after the RBA monetary policy meetingminutespublication. Currency is trading at 0.7631, compared with 0.7645 shortly before the release.
Vista Brokers analysts note that the minutes made clear that the central bank is likely to continue to cut interest rates this year, but cautiously. While the RBA takes a pause, wishing to see fresh statistics after rate cuts in February. But the way to further easing of monetary policy is open, and the Reserve Bank believes these measures are appropriate for achieving the sustainable growth.
Recall that the RBA has cut its key interest rate to a record low of 2.25% in February. Then, in March, the rate value was retained, although investors have expected further cuts. Analysts remain confident that in 2015 the Reserve Bank of Australia will continue to stimulate the economy, as GDP growth slows and unemployment increases.
www.vistabrokers.com
Market Pulse 17.03
Today the Bank of Japan, which never tells the time of its publications in advance, publishes a decision on interest rates, data on the annualrise inmonetarybase and comment on monetary policy. The Japanese controller will also hold a traditional press conference. The Reserve Bank of Australia has already published its monetary policy meting minutes.
10:00 *** ZEW Economic Sentiment - March (Germany)
10:00 ** ZEW Survey (Current Situation) - March (Germany)
Strong impact on the market (EUR). The economic sentiment indicator shows the difference between the number of optimists and pessimists among financial experts. This indicator is closely monitored by markets, and can have a significant impact. Forecasts are optimistic regards this index as well as regards the index of the current situation.
10:00 ** ZEW Economic Sentiment - March (euro zone)
10:00 ** Final Consumer Price Index - March (euro zone)
10:00 ** Final Consumer Price Index - Core - March (euro zone)
Moderate impact on the market (EUR). It is expected that the slowdown in inflation in February was 0.3%, while the core consumer price index has risen slightly. Forecasts for the ZEWeconomicsentiment index are also optimistic.
12:30 *** Manufacturing Sales - January (Canada)
Strong impact on the market (CAD). Volumes of manufacturing sales may be an early indicator of acceleration or deceleration of economic activity. Growth is favorable for the currency, but in January, analysts expect a fairly strong slowdown, so that the effect of the indicator may be negative.
12:30 *** Building Permits - February (USA)
12:30 ** Housing Starts - February (USA)
Strong impact on the market (USD). The US real estate market has not pleased investors yet, as the labor market has, and expectations on the number of issued permits, and laid foundations are not too optimistic. However, the data can still surprise us.
www.vistabrokers.com
Vista Brokers: EUR/USDis Waiting foraGuide forDirectionalMovement
On Monday, EUR / USD was fluctuating in a fairly narrow range, trading above the 1.0500 mark. Vista Brokers analysts say that at the moment the pair is waiting for a guide to continue directional movement. It may get such a guide today from data on ZEW indexes in Germany and the euro zone, as well as the February inflation report in the currency union. However, much more likely that a new starting point will be a FOMC meeting on Wednesday, which is called the event number 1, not only for this week, but for the whole March.
On the one hand, investors feel a disturbance before the meeting, because their hopes for a rate hike in June may not materialize. Amid such sentiments dollar, which in the past couple of weeks has strengthened with confidence against its competitors, is now losing its ground. The weakness of the dollar has led to the fact that on Monday major currencies rose versus greenback. Stock and commodity markets were also able to recover.
However, on the other hand, the growth of the euro against the dollar is still limited, even with the disturbance about the upcoming FOMC meeting and positive outlook for ZEW indexes. An important role is played by the ECB's quantitative easing program, which has started last week. The European Central Bank said that in the first week of the program it was purchased assets in the amount of 9.751 billion euros of public sector bonds and 3.754 billion euros of asset-backed securities.
www.vistabrokers.com
Vista Brokers:MarketsFade prior toFedMeeting
Today at 18.00 GMT in the US following data will be published: FOMCeconomicprojections, FOMCratedecision and FOMCstatement, and at 18.30 will begin a traditional press conference with the Federal Reserve head Janet Yellen. Vista Brokers analysts note that markets are waiting for these data, since they will likely affect the dynamics of many financial instruments: currency pairs, securities, commodities.
Investors expect that the Fed today will specify a lead time for interest rates hike for the first time in nearly nine years. Since 2008, the US central bank is keeping interest rate unchanged at 0.25%, and it did not increas the rate since 2006. Most analysts predict that the rate will be raised in the middle of the year, possibly in June. Recall that positive data on the US labor market, which has recently been showing clear signs of recovery, is adding confidence.
If the Fed shows a clear direction today, it would give a significant support to the dollar against major competitors. Monetary policy of the US central bank, in this case, would be contrary to most countries. Within a few months of this year 24 central banks lowered their rates, while the Fed is taking a course on monetary policy tightening. Especially large-scale stimulus measures are used by the European Central Bank and the Bank of Japan.
www.vistabrokers.com
Market Pulse 18.03
On Wednesday, there will be a lot of interesting publications, including the results of the Fed meeting, which is the event of primary importance. These results will be known only in the evening, and prior to the publication market participants will unlikely act actively. However, we should note other interesting publications of the day. Quite a lot of important statistics will be released today in the UK.
9:30 *** Claimant Count Change - February (UK)
9:30 ** Claimant Count Rate - February (UK)
9:30 ** UnemploymentRate - February (UK)
9:30 ** Average Earnings Index - February (UK)
9:30 ** Employment Change - February (UK)
Strong impact on the market (GPB). Data on the British labor market can be quite interesting. It is expected that the claimant count rate has declined in February, and the unemployment rate has fallen to 5.6%. Such positive data can give a significant support to the pound.
9:30 *** MPC Meeting Minutes - March (UK)
9:30 *** MPC Official Bank Rate Votes - March (UK)
09.30 *** MPC Asset Purchase Facility Votes - March (UK)
Strong impact on the market (GPB). Simultaneously with a portion of labor market data will be released MPC meeting minutes, which can also be a determining factor for the future dynamics of the pound. It will be interesting to see an MPC voting pattern, as well as to know any details of the last meeting.
10:00 **TradeBalance - January (euro zone)
10:00 ** ECB President Mario DraghiSpeaks- March (euro zone)
Moderate impact on the market (EUR). Prior to the Fed meeting, these data are unlikely to affect the dynamics of the euro. Note that Draghi's speech on Monday was quite optimistic. He has noted a stable economic recovery, a necessity of reforms and an importance of the euro zone unity.
12:30 *** Annual Budget Release - 2015 (UK)
Strong impact on the market (GPB). The UK Treasury publishes a budget plan for a next fiscal year, which begins in April. Investors will anatomize this release, analyzing plans of the Treasury for a year. This publication usually has an effect on the market, but not at once, because it takes time for market participants to conduct in-depth analysis.
18:00 *** FOMC Economic Projections - March (USA)
18:00 *** FOMC Rate Decision - March (USA)
18:00 *** FOMC Statement - March (USA)
18:00 *** FOMC Press Conference - March (USA)
Strong impact on the market (USD). These data may have a long-term impact on all financial markets. Investors do not expect the Fed to take any actions right now, but they wait for clearer guidelines about, when rates will be raised. If the market will not receive these guidelines, there is the risk of a significant dollar reduction.
www.vistabrokers.com