EURUSD Technical Analysis 2014, 07.12 - 14.12: Ranging or Bearish?
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newdigital, 2014.12.07 12:23
EUR/USD trading forecast for Monday (based on binarytribune article)
Friday’s trade saw EUR/USD within the range of 1.2271-1.2393. The daily low has also been the lowest level since August 16th 2012. The pair closed at 1.2379, gaining 0.01% on a daily basis, while losing 0.58% for the whole week.
FundamentalsEuro zone German industrial output
Germany’s seasonally adjusted index of industrial production probably fell 0.2% in October compared to a month ago, according to market expectations, following a 1.4% expansion in September. Annualized industrial output contracted 0.1% in September, after another 1.9% decline in August. The index reflects the change in overall inflation-adjusted value of output in sectors such as manufacturing, mining and utilities. In case industrial output shrank more than anticipated, this would mount selling pressure on the euro. Destatis is to publish the official data at 7:00 GMT on Monday.
Sentix Investor SentimentConfidence among investors in the Euro zone probably continued to worsen during the current month, with the corresponding index coming in at a reading of -13.5. In November it stood at -11.87. If so, this would be the fourth consecutive month, during which the gauge occupied negative territory. The index is based on results from the SENTIX survey, one of the most prominent surveys, reflecting investors’ opinion in Germany. It encompasses 2 800 respondents, with 510 of them being institutional investors. Respondents present their expectations regarding ten different markets for a period of one and six months. Readings above zero indicate that respondents were predominantly optimistic, while readings below zero show pessimism. Lower-than-expected readings would have a bearish effect on the common currency. The official index value is due out at 9:30 GMT.
ECB Draghi remarksAt the press conference on Thursday European Central Bank President Mario Draghi noted that bank policy makers would wait until early next year in order to determine whether Euro area economy is in need of additional monetary stimulus.
ECB Governing Council expects to take into consideration a proposal
to widen the bank’s asset purchases, meaning the inclusion of sovereign
debt, at the upcoming policy meeting on January 22nd, Bloomberg
reported.
”We’re looking for the euro to go down to $1.07 by the end of 2015,”
Marvin Barth, head of European foreign-exchange strategy at Barclays Plc
in London, said on Friday in an interview with Bloomberg Television.
”You’ve reached a tipping point in people’s expectations to where the
euro is likely to go. The ECB is providing a significant amount of
accommodation in conjunction with negative deposit rates.”
Pivot Points
The central pivot point for the pair is at 1.2348. In case EUR/USD manages to breach the first resistance level at 1.2424, it will probably continue up to test 1.2470. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2546.
If EUR/USD manages to breach the first key support at 1.2302, it will probably continue to slide and test 1.2226. With this second key support broken, the movement to the downside will probably continue to 1.2180.
The mid-Pivot levels for Monday are as follows: M1 – 1.2203, M2 – 1.2264, M3 – 1.2325, M4 – 1.2386, M5 – 1.2447, M6 – 1.2508.
In weekly terms, the central pivot point is at 1.2385. The three key resistance levels are as follows: R1 – 1.2500, R2 – 1.2620, R3 – 1.2735. The three key support levels are: S1 – 1.2265, S2 – 1.2150, S3 – 1.2030.
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newdigital, 2014.12.08 05:38
EUR/USD Technical Analysis: Wedge Pattern Hints at Bounce (based on dailyfx article)
- EUR/USD Technical Strategy: Short at 1.2710
- Support: 1.2279, 1.2213, 1.1974
- Resistance:1.2455, 1.2529, 1.2683
The Euro may be preparing to rebound against the US Dollar as prices carve out a bullish Falling Wedge chart formation. A daily close above the 1.2360-86 area marked by the 14.6% Fibonacci expansion and the November 21 close exposes the wedge top at 1.2440. Alternatively, a reversal below the 1.2213-38 zone (wedge floor, 23.6% level) opens the door for a challenge of the 38.2% Fib at 1.1974.
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EURUSD M5: 20 pips price movement by EUR - France Trade Balance
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newdigital, 2014.12.05 16:29
Forex Weekly Outlook December 8-12Rate decision in New Zealand and in Switzerland, US Retail sales, Unemployment claims, Producer prices and Consumer sentiment are the major events for this week. Here is an outlook on the highlights coming our way.
Last week, Non-Farm Payrolls posted a superb job gain of 321,000 in November. The release also showed a 0.4% rise in wages. The unemployment rate remained unchanged at 5.8%. This was the biggest jobs gain since 2012, far above average of 224,000 a month over the past year. Economists expected an expansion of 231,000 positions. This excellent release demonstrating the ongoing improvement in the job market cannot go unnoticed. The Fed will have to reexamine its zero rates policy in the coming weeks.
- NZ Rate decision: Wednesday, 20:00. New Zealand’s central bank maintained its Cash rate in September at 3.50%, implying they will keep monetary policy on hold until the end of next year, contrasting the U.S. Federal Reserve plans of raising rates. Low inflation and slowing global growth were the reasons behind the decision to keep rates unchanged. Rates are expected to remain unchanged.
- Australian Employment data: Thursday, 0:30. Australia’s job market added 24,100 jobs in October. Full-time positions expanded by 33,400 while part-time roles declined by 9,400. The jobless rate remained unchanged at a 12-year high of 6.2%, suggesting a weaker labor market amid the economy’s transition from mining-driven growth. The participation rate edged up to a seasonally adjusted 64.6% compared to 64.5% in the previous month. These figures indicate a modest improvement and a positive trend. Australia is expected to gain 15,200 jobs in November, while the unemployment rate is predicted to reach 6.3%.
- Switzerland rate decision: Thursday, 8:30. The Swiss National Bank kept its Libor rate at the minimum low of 0.0% to 0.25%, in line with market prediction. SNB policymakers also issued updated forecasts for growth and inflation revealing a moderate pickup in the coming months. The Central Bank expects GDP growth to reach 2% in 2015. Inflation is expected to reach 2% in 2014 and only 0.6% in 2015. Libor rate is expected to stay unchanged this time.
- US retail sales: Thursday, 13:30. U.S. consumers increased their spending in October, reaching $444.5 billion, on a seasonally adjusted basis, rising 0.3% compared to September’s decline of 0.3%. Economists expected a smaller rise of 0.2%. Consumers were more optimistic and made more purchases. October’s core sales, excluding autos, edged up 0.3% from a 0.2% decline in September. Analysts predicted a 0.2% gain in October. Falling gasoline prices helped to increase domestic expenditures leading to stronger holiday sales. Retail sales are expected to gain 0.3% in November while core sales are predicted to rise 0.1 %.
- US Unemployment claims: Thursday, 13:30. The number of initial claims for unemployment benefits fell back below the 300,000 line last week, indicating continued growth in the labor market. He reading was broadly in line with market forecast. The four-week average increased by 4750 to 299,000 still near post-recession low. However, the sharp decline could be attributed to Thanksgiving holiday. The number of new unemployment claims is expected to be 299,000 this time.
- US PPI: Friday, 13:30. The producer price index gained 0.2% in October amid a pickup in inflation. Prices for many products increased despite a decline in wholesale gas costs. Automakers contributed to inflation by introducing 2015 car models. Beef prices jumped 6% and pork prices surged 8.1%. Meanwhile, core PPI excluding the volatile categories of food and energy, increased 0.4%. However, the rise in PPI does not reflect a trend, since the ongoing declines in fuel prices boost sales boosting inflation. The producer price index is predicted to fall 0.1% in November.
- US Prelim UoM Consumer Sentiment: Friday, 14:55. U.S. consumer sentiment edged up in November to a more than seven-year high of 89.4 points, compared to 86.4 posted in September. Economists predicted a reading of 87.3. The ongoing growth in the employment market and the sharp drop in gasoline prices, boosted sentiment. Current economic conditions increased to 103.0 from 98.3 beating forecast of 98.8. Consumer expectations increased to 80.6 from 79.6, exceeding the 80.2 forecast. However, expectations for income gains remained low despite rising and came in below inflation forecasts. One-year inflation expectation declined to 2.6% from 2.9%, while its five-year inflation outlook was also at 2.6%. U.S. consumer sentiment is expected to improve further to 89.6 this time.
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Something Interesting in Financial Video December 2014
newdigital, 2014.12.09 06:06
EUR/USD slumps, USD/JPY jumps, Crude slides as USD advances post NFPForum on trading, automated trading systems and testing trading strategies
newdigital, 2014.12.10 06:19
Video: Another Fundamental Theme Threatens to Drive Euro Lower (based on dailyfx article)
- There are three venues of major concern for the Euro: ECB stimulus, capital flight and a return to crisis
- To this point, the central bank's vows to leverage monetary policy have strong armed the currency lower
-
Turmoil in Greece however has set in motion the existing pieces of a return to regional financial fears
Can EURUSD
break below 1.2200 before the year closes? The natural liquidity drain
expected of the final weeks of the trading year works against such
significant change. However, a strong fundamental driver can overwhelm
the stand often taken by the remaining market participants and even draw
those on vacation back to their terminals. For the Euro,
there are multiple avenues of concern. The ECB's stimulus efforts have
proven a key driver to this point, but the decision on a full-scale QE
program seems to have been pushed back to 2015. However, two other
lesser-appreciated critical themes are starting to stir. The
implications of capital flight in the event of global risk aversion is
still a difficult threshold to cross. Alternatively, a revived Euro-area
financial fear between rising bond yields, struggling economies and
austerity standoffs looks to be unfolding. In today's Strategy Video, we
take a look at the Euro and what it would take to catalyze the next big
leg for the currency...even before year end.
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newdigital, 2014.12.10 13:41
Deutsche Bank analysis – EUR/USD targets (based on forexlive article)
Near-term, Deutsche Bank thinks that the recent pause in EUR/USD drop could extend into year-end with market positioning very extended, real yield fair value still in the high 1.20s, and ECB expectations running ahead of what was delivered at its December meeting last Thursday.
Going out to next year, DB sees more downside to the currency with the risks being skewed to greater, rather than lesser weakness. DB outlines 3 reasons behind this view:
- First, ECB QE remains our baseline most likely delivered in January. The intended effects are likely to be larger and more protracted than equivalently-sized policies in the US or Japan due to the presence of negative rates.
- Second, we expect Fed rate lift-off to materialize over the course of H2, with the dollar historically showing a strong appreciating trend into the first central bank rate hike.
- Finally, we believe next year will mark the beginning of broader capital flow shifts into the US fuelled by persistent growth and increasing monetary policy divergence.
In line with this view, DB targets EUR/USD in 2015 at 1.22 for Q1, 1.20 for Q2, 1.18 for Q3, and 1.15 for Q4.
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newdigital, 2014.12.11 11:17
Trading News Events: U.S. Advance Retail Sales (based on dailyfx article)
- U.S. Advance Retail Sales to Increase for Ninth-Time in 2014.
- Will Seasonal Factors Spur Better-Than-Expected Retail Sales Report?
Trading the News: U.S. Advance Retail Sales
A pickup in Advance U.S. Retail Sales may generate short-term decline in
EUR/USD as stronger consumption raises the growth and inflation outlook
for the world’s largest economy.
What’s Expected:
Why Is This Event Important:
Indeed, an expansion in household spending is likely to heighten the appeal of the greenback and boost interest rate expectations as a growing number of Fed officials show a greater willingness to normalize monetary policy in mid-2015.
However, sticky inflation along with the slowdown in private sector
credit may drag on household spending, and a dismal development may
foster a more meaningful rebound in EUR/USD as it raises the FOMC’s
scope to zero-interest rate policy (ZIRP) for an extended period of
time.
How To Trade This Event Risk
Bullish USD Trade: U.S. Retail Sales Climbs 0.4% or More
- Need red, five-minute candle following the release to consider a short trade on EUR/USD
- If market reaction favors a long dollar trade, sell EUR/USD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit; set reasonable limit
- Need green, five-minute candle to favor a long EUR/USD trade
- Implement same setup as the bullish dollar trade, just in the opposite direction
EUR/USD Daily Chart
- Despite the string of lower-highs, a bullish break in the Relative Strength Index (RSI) may highlight a larger for EUR/USD.
- Interim Resistance: 1.2600 pivot to 1.2610 (61.8% expansion)
- Interim Support: 1.2280 (100% expansion) to 1.2290 (38.2% expansion)
| Period | Data Released | Estimate | Actual | Pips Change (1 Hour post event ) | Pips Change (End of Day post event) |
|---|---|---|---|---|---|
| OCT 2014 |
11/14/2014 13:30 GMT | 0.2% | 0.3% | -17 | +85 |
U.S. Retail Sales increased 0.3% from the month prior, with 10 of the 13 components showing an expansion in October. Despite stagnant wage growth, the resilience in private sector consumption may put increased pressure on the Fed to normalize monetary policy as it remains one of the leading drivers of growth. The initial reaction to the better-than-expected print was short-lived as EUR/USD climbed above the 1.2500 region during the North American trade to end the day at 1.2521.
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EURUSD M5: 22 pips price movement by USD - Retail Sales news event
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Something Interesting in Financial Video December 2014
newdigital, 2014.12.12 05:39
Forex: Bearish EUR/USD Formation Remains in Focus- AUD Hit by RBA Rhetoric
EUR/USD retains the bearish formation amid growing bets for ECB QE, while the aussie struggles to hold its ground as the RBA toughens the verbal intervention.
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newdigital, 2014.12.12 10:03
Trading News Events: U. of Michigan Confidence (based on dailyfx article)
- U. of Michigan Confidence Survey to Increase for Fifth Consecutive Month.
- Print of 89.5 Would Mark Highest Print Since July 2007.
Trading the News: U. of Michigan Confidence
Another uptick in the U. of Michigan Confidence survey may spur a
further decline in the EUR/USD amid growing speculation for a Fed rate
hike in mid-2015.
What’s Expected:
Why Is This Event Important:
Positive data prints coming out of the U.S economy should continue to
fuel interest rate expectations and heighten the bullish sentiment
surrounding the greenback as a growing number of Fed officials scale
back their dovish tone for monetary policy.
However, we the survey may disappoint as U.S. households face sticky
price pressures paired with the ongoing slack in the real economy, and a
dismal print may spur a larger correction in the greenback as it drags
on expectations for higher borrowing-costs.
How To Trade This Event Risk
Bullish USD Trade: U. of Michigan Survey Climbs to 89.5 or Higher
- Need to see red, five-minute candle following the release to consider a short trade on EURUSD
- If market reaction favors a long dollar trade, sell EURUSD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit; set reasonable limit
- Need green, five-minute candle to favor a long EURUSD trade
- Implement same setup as the bullish dollar trade, just in the opposite direction
EUR/USD Daily Chart
- Failed attempts to close above 1.2450-70 may highlight near-term topping process for EUR/USD especially as the RSI largely retains a bearish momentum.
- Interim Resistance: 1.2600 pivot to 1.2610 (61.8% expansion)
- Interim Support: 1.2280 (100% expansion) to 1.2290 (38.2% expansion)
| Period | Data Released | Estimate | Actual | Pips Change (1 Hour post event ) | Pips Change (End of Day post event) |
|---|---|---|---|---|---|
| NOV P 2014 |
11/14/2014 14:55 GMT | 87.5 | 89.4 | +52 | +100 |
The U. of Michigan Confidence survey unexpectedly surged to 89.4 in November from 86.9 the month prior to mark the fourth consecutive advance. Despite the uptick in sentiment, 12-month inflation expectations weakened further during the same period, with the figure slowing to an annualized 2.6% from 2.9% in October. Nevertheless, the ongoing improvement may highlight a stronger recovery for the U.S. economy as private-sector consumption remains one of the leading drivers of growth. The initial bullish dollar reaction was very short-lived as EUR/USD pushed back above the 1.2450 region following the data print, with the pair ending the day at 1.2521.
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EURUSD M5: 34 pips price movement by USD - UoM Consumer Sentiment news event
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D1 price is on primary bearish market condition with trying to break 1.2279 support level:
W1 price is on primary bearish market condition with breaking 1.2357 support on open W1 bar for now.
MN price is on bearish breakout by breaking 1.2357 support level with Chinkou Span line of Ichimoku indicator crossing the price from above to below.
If D1 price will break 1.2279 support level so the primary bearish will be continuing
If D1 price will break 1.2506 resistance level so the secondary rally may be started within the primary bearish with possible reversal to bullish condition
If not so we may see the ranging within bearish market condition.
UPCOMING EVENTS (high/medium impacted news events which may be affected on EURUSD price movement for this coming week)
2014-12-08 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - German Industrial Production]
2014-12-09 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - German Trade Balance]
2014-12-09 07:45 GMT (or 09:45 MQ MT5 time) | [EUR - French Trade Balance]
2014-12-10 01:30 GMT (or 03:30 MQ MT5 time) | [CNY - CPI]
2014-12-10 19:00 GMT (or 21:00 MQ MT5 time) | [USD - Federal Budget Balance]
2014-12-11 10:15 GMT (or 12:15 MQ MT5 time) | [EUR - Targeted LTRO]
2014-12-12 05:30 GMT (or 07:30 MQ MT5 time) | [CNY - Industrial Production]
2014-12-12 13:30 GMT (or 15:30 MQ MT5 time) | [USD - PPI]
2014-12-12 14:55 GMT (or 16:55 MQ MT5 time) | [USD - UoM Consumer Sentiment]
Please note : some US (and CNY) high/medium impacted news events (incl speeches) are also affected on EURUSD price movement
SUMMARY : bearish
TREND : ranging