*Daily Forex market overviews by MasterForex.com* - page 39
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Overview of the main economical events of the current day - 22/04/2013
GBP rapidly declines on a surprising Fitch decision
Friday surprisingly turned out to be a much more interesting day than one could expect based on the planed data releases as Fitch Ratings decided to cut UK’s rating from AAA to AA+ due to revised debt forecasts and increased possibility of future recession. While it is no news that UK economy is in a tough shape, Fitch’s move still came quite unexpected, putting serious pressure on GBP and EUR as well, which lost its recent gains after the decision was made public.
USD continues to rise vs JPY fueled by the comment of the Japanese Prime Minister, who promised that no G20 meeting participants will be against the new monetary policy.
Today we’ve got GDP data for 1Q13 from both UK and USA and that’s a really important piece of statistics as both economies are currently under close market attention. These numbers are going to show if these economies are falling into recession or not, forming long-term trends for the currencies.
By MasterForex Company
Overview of the main economical events of the current day - 23/04/2013
Major currencies rise vs USD on different trends
EUR showed some gains vs USD on the news of the re-election of the current President of Italy, which not only decreases political risks in the region, but also makes market sure that the current course of action is to remain unchanged. USD was also under pressure following somewhat weak secondary housing sales data that shows a decline last month. Given that this indicator is usually quite an accurate tool for measuring state of economy, no surprise that US currency was down.
GBP was also rising as investors were looking for defensive options. Seems like the market got over the shock of quite unexpected (in terms of timing, not the fact itself) rating cut by Fitch. This makes sense as, once again, the decision itself was of little surprise, especially given the fact that it follows the same move of Moody’s. All in all, it looks like market understands that from a fundamental point of view nothing’s changed regarding UK, so the currency is rebounding after recent losses.
It was definitely not a finest hour for USD, as even JPY was rising vs the American currency. And while JPY was not able to hold above 100, it still showed some impressive gains after G20 gave a green-light to Japanese monetary measures.
By MasterForex Company
Overview of the main economical events of the current day - 24/04/2013
EUR reaches 2-week low vs USD on poor data reports, drags GBP downwards
EUR erased its recent gains vs USD after ECB published a report with somewhat weak data, increasing market concerns that a rate cut is possible. EU service sector PMI was slightly up reaching 46.6 compared to 46.4 in March, however the number is still below a threshold level of 50, which separates growth from recession. Moreover, this decline is in line with the decline in Germany, which is the strongest economy in the Union, adding to the concerns.
GBP was declining vs USD as well, partly fueled by disappointing UK CBI industrial trends and budget deficit numbers, however it didn’t have a major impact on the currency and GBP was trading pretty much in line with EUR as European problems are perceived by the market as a more important driver.
Today, UK lending data and some other British statistics are up for release, while from Eurozone watch out for German IFO. We do not expect major market reaction to UK data as the planned releases are quite volatile and have little correlation with retail sales, but IFO might actually have quite a strong effect on trading, especially if the number comes strongly above expectations contradicting recent disappointing PMI data.
By MasterForex Company
Overview of the main economical events of the current day - 25/04/2013
EURUSD little changed as markets wait for new information
Despite showing some volatility on Wednesday after the release of German IFO, EURUSD trades more or less flat even after somewhat disappointing data, which suggests that short-term the market sees the current levels as fair. New information regarding the US economy is to be released this Friday and, perhaps, it will be finally enough to move the currency – or, perhaps, we will see some movement next week after FOMC and ECB meetings.
Intra-day, GBP was rising vs EUR and showed strong gains after weak German IFO data. However, just like with EURUSD, there was no follow-through GBP buying – and, no sell-offs either following a weaknesss in UK CBI Distributive trades survey.
Today the UK Q1 GDP figures will get lots of attention. While the market looks for marginal growth (up 0.1% qoq), we would not be very surprised if the numbers come on a negative side, «officially» pushing the economy into recession. Given that, expect to find GBP under some pressure.
Other than that, today is quite a slow day in terms of news with only the US initial jobless claims and the Spanish unemployment rate for release. Most likely the impact will be minor.
By MasterForex Company
Overview of the main economical events of the current day - 26/04/2013
GBP rises on strong statistics
GBP was rising yesterday with a help of 1Q13 GDP data that came surprisingly high at 0.3% compared to expectations of 0.1% qoq growth. Moreover, we had some concerns that the number might actually be a negative one, meaning another recession for UK, however it seems that British economy is actually in a better shape than one could expect based on preliminary indicators. While this positive news do strengthen the position of Bank of England regarding not making any changes to the monetary policy during the meeting in 2 weeks, there are some hints being transmitted to the market that it might actually happen – so keep an eye on further developments in this area.
At the Bank of Japan meeting that ended early this morning BoJ kept the pledge to double the monetary base in 2 years. Focus now turns to the revised macroeconomic forecast that is due today.
EUR was under serious pressure yesterday on rumors that ECB will cut the key interest rate to a record low level during the next week, helping the region's economy. Moreover, some ECB members also hint that this issue might be discussed during the meeting on May 2nd. Given the amount of rumors regarding the rate cut we've seen recently, one might conclude that there is no smoke without a fire, but only time will tell if it's the right conclusion or not.
By MasterForex Company
Overview of the main economical events of the current day - 29/04/2013
USD rebounds, EUR and GBP are still under pressure
EUR continues to decline after an interview with the head of Bundesbank, who admitted that ECB might cut the rates if the economy continues to slow down, which set the union currency in a free fall. At the same time he said that monetary policy is not the key question and rather prefers to concentrate on reforms in Germany and EU, saying that the full recovery might take as long as 10 years.
GBP continues its decline, showing a record loss in 6 weeks vs USD after disappointing statistics from UK, that suggest rising unemployment level on the back of declining wages growth. British currency declined vs most of the major currencies after Bank of England meeting minutes were released, showing that Head of BoE supports the idea of expanding the asset purchase program by another GBP 25bn.
This comes as almost no surprise, given the fact that yesterday IMF cut the growth forecasts for UK and announced that BoE needs to increase its measures. Given the condition of the economy, we’d say that it is a really possible scenario – in that case, expect GBP to fall even further.
By MasterForex Company
Overview of the main economical events of the current day - 30/04/2013
EUR rises on declining political risks
EUR is rising vs most of the major currencies as a result of a 2 month long political crisis in Italy coming to its end. And while the European currency was under some pressure following a release of sentiment data which came a little under consensus, EUR bounced back after a successful bond placement by Italy.
Another factor helping EUR climb was a weakness in USD, which appeared after somewhat disappointing US data that shows an increase in unfinished housing deals coupled with declining rate of growth of personal income. And while the data comes as little surprise as most of it was already published in a 1Q13 GDP report, it looks like market participants took the news as an excuse to justify further EUR growth.
GBP is also rising, reaching a 10 week high vs USD fueled by a set of strong data from UK. According to the reports, housing prices are rising (decreasing risks of yet another recession) – which means that increased economy stimulation measures are off the table – at least for now, allowing GBP to show some gains.
By MasterForex Company
Overview of the main economical events of the current day - 01/05/2013
Markets await US FED decision on rates
The dollar continued to weaken on Tuesday, the fifth day in a row, waiting for the decision of the most powerful central bank in the world on the base interest rate. The results of the two days Federal Reserve’s FOMC meeting will be declared on Wednesday evening. Although nobody is waiting for any significant changes in wording, the last macrostatistics data don’t allow favor an early exit from the program of quantitative easing. All this puts pressure on the dollar.
Even the Conference Board data which happened to be much better than the forecast didn’t help the dollar. In April the confidence among consumers rose significantly – up to 68.1level comparing to the March index 61.9 revised upwards. The April’s figure turned out the highest since November, 2012.
At the same time in April time purchasing manager index /PMI/ in Chicago fell to the lowest level since September, 2009 – up to 49.0 level in comparison with 52.4 level in March. Besides, markets are still under influence of weak figures of the US GDP of the first quarter declared last week. According to these figures the main economics index increased only by 2.5% (with expectations of growth in 3.1%).
Euro continued to grow on Tuesday despite expectations of the key interest rate fall on Thursday at ECB meeting. And although the rate fall is considered as a negative factor for currency – in this case markets interpret this possible event as a positive thing for euro zone economics, stock markets and euro currency.
Pound also continued its growth on Tuesday after the Bank of England report which showed that in March British banks issued loans for buying houses more than it was expected. The number of approved mortgage credits in March was 53.5K against 51.9K in February. All this indicates the economic recovery.
Canadian dollar also is close to parity against the US dollar – after the GDP data issued on Tuesday. Canada’s GDP increased by 0.3% in February against expectations of 0.2% - favored by increased activity in the mining and oil exploration sectors. Year-on-year the rate rose to 1.7%, also exceeding the forecast of 1.3%
Downward short-term correction in the pair USD / JPY is also continuing to develop. The dollar fell on Tuesday against the Japanese yen to its lowest level since April 16. Commerzbank recommends short-term short position in this pair, with goals at 95.80.
May 1 in most countries of the euro zone and China is a bank holiday, so a quiet European session is expected. But the North American session is unlikely to be calm. At first, preliminary data will be released on the labor market from ADP, as well as the ISM Manufacturing PMI. At 18:00 UTC the results will be announced on the two-day meeting of the FOMC.
By MasterForex Company
AUD/USD DAILY as of Thursday, 02 May, 2013
AUD/USD closes with a Daily big black candle yesterday. This is a bearish candle as prices closed significantly lower than they opened. If the candle appears when prices are "high," it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trend line, or price resistance level), the long black candle adds credibility to the resistance. If the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
For the past 10 Daily, there are 5 white candles and 4 black candles with a net of 1 white candles.
For the past 50 Daily candlestick bars, there are 27 white candles and 22 black candles with a net of 5 white candles.
Daily Separating lines has formed. If the lines occur during an uptrend and the first line is black and the second is white (which is not the case with Australian Dollar / US Dollar) then this suggests that the uptrend should continue.
If the separating lines occur during a downtrend(which appears to be the case with Australian Dollar / US Dollar) and the first line is white and the second is black (which is the case with Australian Dollar / US Dollar) then this suggests that the downtrend should continue.
A SAR Buy signal was generated yesterday. If you are short, this might be a good place to exit.
The close is currently
BELOW its 200 daily moving average
BELOW its 50 daily moving average
BELOW its 20 daily moving average
The current market condition for Australian Dollar / US Dollar is Very Bearish
The present wave patterns are:
fast amplitude (8%): bullish wave 1
moderate amplitude (13%): bullish wave 3
Australian Dollar / US Dollar is long term Bearish as the 144 days moving average of 1.04 is decreasing. The Relative Strength Index is at 42.78 in the neutral territory. The Relative Momentum Index is at 41.17 in the neutral territory. An important indicator for Elliott waves, the Elliott oscillator is at -0.00, in negative territory; this is a bearish sign. An equally important indicator, the STORSI is at 79.65. This value is in the overbought territory.
Intra-Daily Trading Strategy for today : SELL AUD/USD
Sell Target: 1.0238
Sell Stop: 1.0427
Enter SELL on OPEN and exit SELL at Target price or at Stop price. Do not reverse.
Overview of the main economical events of the current day - 02/05/2013
Federal Reserve failed to make the situation clear. ECB is next to talk
EURUSD raised above 1.32 on Tuesday after APD published private sector employment data that appeared to be worse than planned. US employment rate increased by 119 thousand last month, while planned value is 150-150 thousand. Private business employed less personnel in April than the economists have expected due to dismissals on plants. Moreover, March data was reconsidered to be downside.
US industrial production activity in April slowed down as well, though exceeding experts’ expectations. According to the report issued on Wednesday, Production industry procurement management index from ISM dropped to 50.7 in April from 51.3 in March.
This assured the market players that in 2013 the Fed won’t cut monthly bond purchasing, which put pressure on the greenback.
Fed Reserve’s two day meeting ended on Wednesday resulted, at large, as it was expected. Despite weak US data issued within the last few weeks, the Fed didn't mark down the expected economy growth rate, and noted that the inflation rate is slightly lower than the planned value.
The Federal Reserve confirmed its plans to continue retirement of bonds in an amount equal to $85 bln monthly. The only thing that is new is the following statement: “The committee is ready to increase or decrease the assets acquisition rate in order to maintain proper market development and inflation changes”.
Market participants have different ideas on how to react to such a foggy statement. Some think this is in favor of the greenback, the others, vice versa, speak out against the American currency. The same way, the markets didn’t show any clear dynamics after the decision was declared. This increases importance of US employment report to be issued on Friday, for the Fed Reserve plans to adjust the monetary policy depending on economic situation.
The Pound kept increasing on Wednesday, recorded 11-weeks high against dollar after The British industry sector procurement management index turned out to be exceeding expectations. In April the index grown to 49.8 contrary to reconsidered March value 48.6, which is the same as planned.
Australian dollar lost quite a lot on Wednesday after Chinese production industry activity index was issued. Last month it dropped to 50.6 contrary to 50.9 in March. China is the main Australia’s partner.
Today the markets will follow the ECB’s key rate decision. It will determine following direction for Euro. However, it’s quite obvious that after the week of weakness for dollar we can expect some kind of retracement after the Fed Reserve meeting takes place. Technically, Euro reached critical levels around 1.32. Another thing is that stock and commodity markets also shown bad dynamics on Wednesday, which may contribute to the dollar's rate increase in short-run.
By MasterForex Company