EURUSD Technical Analysis 2015, 25.01 - 01.02: Bearish Breakdown
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newdigital, 2015.01.24 13:51
Forex Weekly Outlook January 26-30 (based on forexcrunch article)
Greek Parliamentary Election; German Ifo Business Climate; UK GDP
data; US Durable Goods Orders; US CB Consumer Confidence; US housing
data; Rate decision in the US and in New Zealand; US Unemployment
Claims; GDP data in Canada and the US. These are the most important
economic releases for this week. Follow along as we explore these Forex
market movers.
Last week’s central event was Draghi’s announcement of an extensive
bond-buying program which will insert hundreds of billions in new money
into the sluggish euro zone economy. The European Central Bank said it
would buy sovereign debt from March till September 2016. Germany opposed
this move, saying it will aid countries in debt to loosen economic
reforms. The ECB plans to add more than 1 trillion euros by September
2016, to boost the Euro-area economy and fight deflation. However, since
only 20% of purchases would be the responsibility of the ECB, critics
warn that in case a euro zone government defaults, it would fall on
national central banks, getting weak countries deeper in debt. Draghi
said the QE could create the basis for growth, but the main
responsibility lays on governments to implement structural reforms to
sustain growth. Will this move help revive the Eurozone economy?
- Eurozone Greek Parliamentary Election: Sunday. The national elections this week will determine whether Prime Minister Antonis Samaras will maintain his position or be defeated by Alexis Tsipras from Syriza party. Samaras said he can reach an agreement with Greece’s creditors by the end of February, while Tsipras said he can get an agreement by this summer keeping Greece within the euro area. Greece will not receive the next bailout money of 7.2 billion euros unless a review of the country’s progress in meeting the terms of its bailout is completed by Feb. 28.
- Eurozone German Ifo Business Climate: Monday, 9:00. German business confidence increased 0.8 points in December, reaching 105.5, broadly within market expectations. Falling oil prices and the weaker euro boosted German economy. Economic data showed improvements in the manufacturing and wholesaling sectors despite downturn trend in sales to Russia and sluggish reforms in France and Italy. Business sentiment is expected to reach 106.7 this time.
- UK GDP data: Tuesday, 9:30. U.K. economic growth weakened in the third quarter, amid sluggish economic activity in the euro-area. Gross domestic product increased 0.7% in the three months through September, following 0.9% rise in the second quarter. The reading was in line with market forecast. On an annualized basis, the U.K. economy expanded 2.8% in the third quarter. Worrying signs of renewed stagnation in the euro zone may have a negative effect on UK’s. UK growth is predicted to be 0.6% in the fourth quarter of 2014.
- US Durable Goods Orders: Tuesday, 13:30. Durables orders plunged 0.7% in November after gaining 0.3% in October, while analysts expected a 3.0% jump. Likewise, core orders dropped 0.4% in November after contracting 1.0% in the prior month. Analysts predicted a 1.2% rise. Transportation declined 1.2% a 3.3% jump in October. The rise in autos and nondefense aircraft was overshadowed by a sharp drop in defense aircraft orders. Both Durable orders and Core orders are expected to gain 0.6%.
- US CB Consumer Confidence: Tuesday, 15:00. American consumers were more positive in December amid strong economic data releases. Consumer sentiment climbed to 92.6 in December from a revised 91 in the previous month. 17.1% of responders noted a rise in job availability from 16.2% in November. 19.6% claimed business conditions were worse compared to 21.8 in November. The rise in confidence goes hand in hand with GDP growth and the constant improvement in the job market. A further increase to 95.7 is expected now.
- US New Home Sales: Tuesday, 15:00. Sales of new U.S. homes contracted 1.6% in November to a seasonally adjusted annual rate of 438,000 units, indicating the housing sector still hasn’t benefited from the recent improvements in the job market. The reading was worse than the 461,000 rate forecasted by analysts and lower than October’s downwardly revised rate of 445,000. New-home sales remain far below the annual rate of 700,000 seen during the 1990s, as many Americans lack solid credit records to enable obtaining mortgages. Sales of new U.S. homes is expected to reach 452,000 in December.
- US rate decision: Wednesday, 19:00. The Federal Reserve policy makers have repeatedly announced their intentions to raise rates. However the sharp plunge in consumer prices during December may detain such a move. Federal Reserve chair Janet Yellen, claimed that the sharp drop in oil prices was positive for the US economy boosting household spending, but other Fed policy makers prefer to see stronger inflation before voting to raise rates. The Fed’s focus is on core inflation to help assess underlying price pressures in the economy. Fed official said recently that mid-year would be an appropriate time to consider a rate rise. No change in rates is expected.
- NZ rate decision: Wednesday, 20:00. The Reserve Bank of New Zealand has maintained its Official Cash Rate at 3.5% in December in line with market forecast. The central bank estimates output will grow above capacity and inflation will reach the 2% target by the end of the forecast period, which will advance a 40 basis points rate hike by early 2017. Reserve Bank of New Zealand Governor Graeme Wheeler repeated his warnings about the overrated New Zealand dollar but noted that global financial market volatility had taken some pressure off the currency.
- US Unemployment Claims: Thursday, 13:30. The number of Americans filing initial claims for unemployment benefits was higher than expected last week, indicating the holiday volatility sill continues. Jobless claims declined by 10,000 to 307,000, while expected to reach 301,000. Layoffs of holiday staffing make it difficult to assess the true state of the weekly jobs data. However, except for these temporary layoffs the US job market remains resilient at the beginning of 2015. The number of jobless claims is expected to reach 301,000 this week.
- Canadian GDP: Friday, 13:30. Canada’s economy expanded more than expected in October rising 0.3% following a 0.4% gain in the previous month. Analysts expected a small increase of 0.1%. However weak oil prices are forecasted to weaken growth in 2015 by contracting exports and investment. The BOC projects a yearly growth of 2.2% in 2015 from 2.5% growth in 2014. However exports to the US are expected to increase as the US economy strengthens. Canadian growth is expected to contract 0.1%.
- US GDP data: Friday, 13:30. The U.S. economy expanded 3.5% in the third quarter, indicating the US economy continues to improve and has no need for further QE. The GDP release was stronger than the 3.1% growth rate expected by analysts. Business investment and consumer spending dropped slightly from the second quarter, however, trade deficit contracted. Growth in four of the past five quarters reached 3.5% or above suggesting self- sustaining growth. Us economic growth in the fourth quarter is expected to be 3.1%.
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newdigital, 2015.01.26 13:33
EUR/USD – Elliot Wave analysis suggests first target reached says Goldman Sachs (based on forexlive article)
- It’s in some way the first major target for EURUSD, particularly from an Elliott Wave perspective, as it could theoretically complete/ satisfy the multi-year ABC correction that began back in ’08. It’s certainly possible to extend this C-leg, but sensibly speaking, it’s really important now more than ever to watch for signs of momentum loss
- In terms of what’s next below 1.12, naturally 1.10 is going to be psychologically significant. Besides that, there’s really nothing which stands out as being particularly strong until ~1.0286-1.0103. While that might sound extreme, it’s clearly an important pivot from a pure techs perspective as it includes an ABC from the ‘08 high and also 76.4% retrace from ’01 (while still fitting with the LT wave count). All in all, it’s clear this trend could eventually extend much further
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newdigital, 2015.01.24 17:54
NASDAQ forecast for the week of January 26, 2015, Technical Analysis
The NASDAQ as you can see broke higher during the course of the week, but did not manage to break above the 4800 level yet. This is an area that needs to be cleared in order for us to serve buying from a longer-term perspective, but we do anticipate that will happen. If we can get above 4800, we don’t see any reason whatsoever why the market will then head to the 5000 level. Pullbacks should continue to be buying opportunities as we believe that the 4600 level below is massively supportive.
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newdigital, 2015.01.27 05:48
EUR/USD Rallies to 1.1250 Following Greek Vote (based on marketpulse article)
The euro rebounded on Monday as investors took advantage of steep losses sustained during two days of dramatic selling, with the final push down to a fresh 11-year low coming after elections in Greece put an anti-austerity government in power.
Following the outcome of Sunday’s vote, the euro hit its lowest against the U.S. dollar since September 2003 at $1.1098 in Asian trading, according to the EBS trading platform EUR=EBS. Greece elected, as expected, left-wing leader Alexis Tsipras of the anti-bailout Syriza party.
Tsipras’s party won 149 seats in the 300-seat Greek parliament, setting Athens on a collision course with international lenders and potentially threatening its place in the euro.
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newdigital, 2015.01.27 10:40
Another Big Week Points to Major Currency Moves - How Might we Trade? (based on dailyfx article)
- US Dollar at elevated risk of volatility ahead of critical US Federal Reserve decision
- Forex volatility prices continue to trade near multi-year highs amid central bank activity
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newdigital, 2015.01.28 06:03
Good Artists Copy, Great Artists Steal: A 3-Month Outlook On EURUSD (based on seekingalpha article)
- The European Central Bank has finally announced Quantitative Easing.
- This will lead to a further increase in monetary supply from the ECB.
- This will cause the euro to decline to parity versus the U.S. dollar over the next 3 months.
During a multi-part PBS television program "Triumph of the Nerds: The Rise of Accidental Empires", which premiered in 1996, Steve Jobs mentioned the saying which he attributed to Pablo Picasso:
"Ultimately it comes down to taste. It comes down to trying to expose yourself to the best things that humans have done and then try to bring those things in to what you're doing. I mean Picasso had a saying he said good artists copy great artists steal. And we have always been shameless about stealing great ideas."
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newdigital, 2015.01.28 10:44
AUDIO - Currency Perspectives with Reggie Ringgold
The Euro showed a little strength, while the dollar took a breather! Reggie Ringgold
joins Power Trading Radio to offer his thoughts on the trend for both
of these currencies and much more. The duo take a look at how the recent
Greek elections may impact the Euro going forward and possibly global
currencies.
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newdigital, 2015.01.28 17:16
US Dollar May Fall as FOMC Fails to Fuel Interest Rate Hike Bets (based on dailyfx article)
- US Dollar May Fall as Status-Quo FOMC Fails to Fuel Rate Hike Outlook
- Aussie Dollar Gains as CPI Data Undermines RBA Interest Rate Cut Bets
A quiet economic calendar in European trading hours is likely to see traders looking ahead to the US session for direction cues, with the spotlight pointing firmly to the outcome of the FOMC monetary policy meeting. Janet Yellen and company introduced a much-discussed change to the language of the policy statement at December’s sit-down, swapping out a pledge to hold rates low for a “considerable time” after the end of QE3 and replacing it with another promising to be “patient” before tightening. It seems unlikely that the cautiously slow-moving US central bank will opt to tinker with policy again so soon after making an adjustment, meaning today’s announcement will probably stick closely to the status quo.
The substance of the FOMC outcome and its interpretation by the financial markets need not align however. The markets seem primed for a hawkish result, if only because the US Dollar is hovering near six-year highs while speculative net-long positioning in the benchmark unit is at the highest since at least 1993. An outcome that sees the Fed in wait-and-see mode and fails to meaningfully advance the case for tightening may have a hard time sustaining such levels. In fact, it may serve to remind investors that the central bank has signaled no rate hikes will occur through April.Forum on trading, automated trading systems and testing trading strategies
newdigital, 2015.01.28 20:30
2015-01-28 19:00 GMT (or 21:00 MQ MT5 time) | [USD - Federal Funds Rate]- past data is 0.25%
- forecast data is 0.25%
- actual data is 0.25% according to the latest press release
if actual > forecast (or actual data) = good for currency (for USD in our case)
[USD - Federal Funds Rate] = Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
==========
"To support continued progress toward maximum employment and price
stability, the Committee today reaffirmed its view that a highly
accommodative stance of monetary policy will remain appropriate for a
considerable time after the asset purchase program ends and the economic
recovery strengthens. The Committee also reaffirmed its expectation
that the current exceptionally low target range for the federal funds
rate of 0 to 1/4 percent will be appropriate at least as long as the
unemployment rate remains above 6-1/2 percent, inflation between one and
two years ahead is projected to be no more than a half percentage point
above the Committee's 2 percent longer-run goal, and longer-term
inflation expectations continue to be well anchored. In determining how
long to maintain a highly accommodative stance of monetary policy, the
Committee will also consider other information, including additional
measures of labor market conditions, indicators of inflation pressures
and inflation expectations, and readings on financial developments. The
Committee continues to anticipate, based on its assessment of these
factors, that it likely will be appropriate to maintain the current
target range for the federal funds rate well past the time that the
unemployment rate declines below 6-1/2 percent, especially if projected
inflation continues to run below the Committee's 2 percent longer-run
goal. When the Committee decides to begin to remove policy
accommodation, it will take a balanced approach consistent with its
longer-run goals of maximum employment and inflation of 2 percent."
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EURUSD M5: 42 pips price movement by USD - Federal Funds Rate news event
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newdigital, 2015.01.29 06:11
EURUSD takes a look below the 100 hour MA. USDJPY also moving lower. Stocks falling (based on forexlive article)
The EURUSD has dipped below the 100 hour MA as traders debate more hawkish or more dovish. The RBNZ statement which was decidedly more bearish, may have also attracted some sympathy selling in the EURUSD in the process, but that is just an observation, not a statement of fact.
The 100 hour MA held support in early NY trading. The current level comes in at 112.90. The low extended to 112.81. IF the price is to go lower, traders will want to see further momentum soon. If not expect consolidation into the early Asian trading as traders reassess.
Meanwhile, the USDJPY is moving lower as well, as stocks move to lows for the day and flows lead into the JPY. The pair is moving toward the 117.17 support floor. The pair has been finding dip buyers against the 117.17-32 area over the last 7 or so trading days with quick reactionary buys. Those looking for the dip to buy, this is your area to lean against judging from the recent history. However, be careful on a break. There should be some stops below the low.
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D1 price is on primary bearish with secondary breakdown:
W1 price is on primary bullish with the secondary correction started in the middle of December last year.
MN price is on bullish trend which was stopped by 121.84 resistance level.
If D1 price will break 1.1315 support level on close bar so the bearish breakdown will be continuing for whole the week
If D1 price will break 1.1859 resistance level so we may see the market rally inside the primary bearish
If not so it will be the ranging between 1.1859 and 1.1315 levels
UPCOMING EVENTS (high/medium impacted news events which may be affected on EURUSD price movement for this coming week)
2015-01-26 09:00 GMT (or 11:00 MQ MT5 time) | [EUR - German Ifo Business Climate]
2015-01-27 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Durable Goods Orders]
2015-01-27 15:00 GMT (or 17:00 MQ MT5 time) | [USD - New Home Sales]
2015-01-27 15:00 GMT (or 17:00 MQ MT5 time) | [USD - CB Consumer Confidence]
2015-01-28 19:00 GMT (or 21:00 MQ MT5 time) | [USD - Federal Funds Rate]
2015-01-29 08:55 GMT (or 10:55 MQ MT5 time) | [EUR - German Unemployment Change]
2015-01-29 13:30 GMT (or 15:30 MQ MT5 time) | [USD - Unemployment Claims]
2015-01-30 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - German Retail Sales]
2015-01-30 08:00 GMT (or 10:00 MQ MT5 time) | [EUR - Spanish GDP]
2015-01-30 08:00 GMT (or 10:00 MQ MT5 time) | [EUR - Spanish CPI ]
2015-01-30 10:00 GMT (or 12:00 MQ MT5 time) | [EUR - CPI Flash Estimate]
2015-01-30 13:30 GMT (or 15:30 MQ MT5 time) | [USD - GDP]
Please note : some US (and CNY) high/medium impacted news events (incl speeches) are also affected on EURUSD price movement
SUMMARY : bearish
TREND : breakdown