Forecast for Q1'16 - levels for EUR/USD - page 6

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Sergey Golubev, 2016.01.30 09:20

Forex Weekly Outlook February 1-5 (based on the article)

US ISM Manufacturing PMI, rate decision in Australia and the UK, Employment data from New Zealand, Canada and the US, including the all-important NFP release, Mark Carney speaks in London and Trade balance in Canada and the US. These are the main highlights for this week. Here is an outlook on these important events.

  1. US ISM Manufacturing PMI: Monday, 15:00. The manufacturing PMI continued its contraction in December after a disappointing reading of 48.6 in the previous month. This was the lowest reading since July 2009 with declines across the board. The New Orders Index increased 0.3 points reaching 49.2. The Production Index registered 49.8% from 49.2% in November. The Employment Index declined 3.2 to 48.1. The manufacturing PMI  is expected to remain at 48.6 this time.
  2. Australian rate decision: Tuesday, 3:30. The Reserve Bank of Australia maintained the official cash rate at 2.0% on its December meeting. Governor Glenn Stevens noted a certain improvement in economic conditions, but the outlook for may require further monetary easing. Stevens said he is willing to cut rates if economic data worsens.
  3. NZ Employment data: Tuesday, 21:44. New Zealand employment market unexpectedly contracted for the first time in three years in the third quarter, mainly due to a decline in part-time workers. Employment fell 0.4% after rising 0.3% in the previous quarter. Economists expected employment to grow 0.4% in the third quarter. Furthermore, the unemployment rate increased to 6% from 5.9 in the second quarter. Economists expect New Zealand’s labor market to expand by 0.8%  while the unemp[loyment is predicted to rise to 6.1%.
  4. US ADP Non-Farm Employment Change: Wednesday, 13:15. US private sector employment expanded by 257,000 jobs in December according to the ADP report. The reading pointed to underlying strength in the economy and followed a 211,000 gain in the previous month. Labor market strength suggests the economy’s condition remains solid, and may prompt the Federal Reserve to raise interest rates again in March. US private sector is expected to gain 191,000 in January.
  5. US ISM Non-Manufacturing PMI: Wednesday, 15:00. US service sector expanded less than expected in December with the slowest growth pace in almost two years. The index declined to 55.3 from 55.9 in November, missing market forecast for a reading of 56.0. The New Orders Index posted 58.2, rising 0.7 points; the Employment Index increased 0.7 points to 55.7, while the Prices Index declined 0.6 points from November. However the majority of respondents’ comments remain positive about business conditions and the overall economy. US service sector activity is expected to decline to 55.2.
  6. UK Rate decision: Thursday, 12:00. The Bank of England maintained interest rates in January amid volatility in global markets and a continuous fall in oil prices slowing inflation even further. Only Ian McCafferty voted for a rise to 0.75%. MPC members believed “the outlook remained unchanged from the previous economic forecasts in November. But the minutes also noted the volatility on financial markets, and in share prices in particular. Furthermore, the MPC highlighted a 40% fall in the oil price which would badly affect inflation growth.
  7. Mark Carney speaks: Thursday, 12:00.  BOE Governor Mark Carney will speak about the Inflation Report, in London. Carney said at a speech in London that the Bank of England should not begin raising interest rates in the coming months, stating the weak condition of the global economy and the slowed growth in the UK. He also said that the  MPC will watch for signs of renewed downturn in inflationary pressures before offering another round of monetary easing.
  8. US Unemployment Claims: Thursday, 13:30.   The number of new US claims for unemployment benefits declined last week from a six-month high of 294,000 to 278,000, reaffirming the strength of the US labor market. Economists forecasted a drop to 282,000 in the latest week. The four-week moving average is now 23,750 above its post-recession low of 259.250 from last October. The number of new claims is expected to be 286,000 this week.
  9. Canadian Employment data: Friday, 13:30. The Canadian labor market expanded unexpectedly in December adding 22,800 jobs, amid a large gain in part-time work. The number of full-time employment actually declined in December by 6,400 while the economy added 29,200 part-time jobs. Meanwhile, the unemployment rate remained unchanged at 7.1%. The overall picture is less appealing; indicating hiring in the private sector is weak. The 2015 employment growth rate was slightly stronger than in 2014 and 2013, when the overall number of jobs expanded by just 0.7% in each of those years.
  10. US Non-Farm Employment Change and Unemployment rate: Friday, 13:30. U.S. payrolls surged in December by 292,000 following 252,000 in the previous month. Hiring got a boost from unseasonably warm weather and the unemployment rate remained unchanged at a 7-1/2-year low of 5%. The firm employment data indicates the economy sustains growth while the recent weakness could be attributed to the manufacturing and export-oriented sectors. U.S. payrolls for October and November were revised up to show 50,000 more jobs created than previously reported, adding to the report’s upbeat tone. US private sector is expected to expand by 192,000 in January, while the unemployment rate is estimated to remain at 5%.
  11. US Trade Balance: Friday, 13:30. US trade deficit contracted in November to a nine-month low of $42.4 billion as a sharp decline in imports outweighed a decline in exports. However, the overall picture shows both exports and imports are now falling due to the dollar’s strength and the weakness in global economy. Exports fell 0.9% to US$182.2 billion, more than a four-year low. US trade deficit is predicted to inch up to $42.8 billion in December.

 

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Sergey Golubev, 2016.02.01 16:07

EUR/USD Intra-Day Fundamentals: ISM Manufacturing PMI and 16 pips price movement

2016-02-01 15:00 GMT | [USD - ISM Manufacturing PMI]

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - ISM Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

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"The January PMI® registered 48.2 percent, an increase of 0.2 percentage point from the seasonally adjusted December reading of 48 percent. The New Orders Index registered 51.5 percent, an increase of 2.7 percentage points from the seasonally adjusted reading of 48.8 percent in December. The Production Index registered 50.2 percent, 0.3 percentage point higher than the seasonally adjusted December reading of 49.9 percent. The Employment Index registered 45.9 percent, 2.1 percentage points below the seasonally adjusted December reading of 48 percent. Inventories of raw materials registered 43.5 percent, the same reading as in December. The Prices Index registered 33.5 percent, the same reading as in December, indicating lower raw materials prices for the 15th consecutive month. Comments from the panel indicate a mix ranging from strong to soft orders, as eight of our 18 industries report an increase in orders, and seven industries report a decrease in orders."


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EURUSD M5: 16 pips price movement by ISM Manufacturing PMI news event :



 
Sergey Golubev:

EURUSD Intra-Day Technical Analysis - secondary correction to the possible bearish reversal

H4 price was on the breakout by crossing Ichimoku cloud to above with the bullish reversal: the price broke key resistance level and stopped by 1.0967 resistance for the secondary correction to be started with 1.0864 target. The price is moved withing the following key reversal s/r levels for now:

If H4 price will break 1.0869 support level on close H4 bar so the reversal of the price movement from the primary bullish to the primary bearish condition may eb started with the secondary ranging: the price will be located inside Ichimoku cloud.

If H4 price will break 1.0788 support level on close H4 bar so the price will be fully reversed to the bearish market condition.
If H4 price will break 1.0967 resistance level so the bullish trend will be continuing.
If not so the price will be ranging within the levels.

H4 price broke 1.0869 resistance level to above with +49 pips in profit for now :


 

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Sergey Golubev, 2016.02.03 14:25

Trading News Events: US ISM Non-Manufacturing (based on the article)

A slowdown in the ISM Non-Manufacturing survey may produce headwinds for the greenback and spur a near-term rally in EUR/USD as fears of a slowing recovery dampens bets for a Fed rate-hike in the first-half of 2016.

Why Is This Event Important:

Even though the Federal Open Market Committee (FOMC) appears to be on course to implement higher borrowing-costs, mixed data prints coming out of the U.S. may encourage the central bank to endorse a wait-and-see approach at the March 16 interest rate decision as the ongoing slack on the real economy undermines the Fed’s scope to achieve its 2% inflation target over the policy horizon.

Nevertheless, improved confidence accompanied by the pickup in the housing market may generate pickup in private-sector activity, and a stronger-than-expected ISM print may boost the appeal of the greenback as it reinforces Fed expectations for a consumption-driven recovery in 2016.

How To Trade This Event Risk
Bearish USD Trade: ISM Non-Manufacturing Slips to 55.2 or Lower
  • Need green, five-minute candle following the ISM print to consider a long EUR/USD trade.
  • If market reaction favors a bearish dollar trade, buy EUR/USD with two separate position.
  • Set stop at the near-by swing low/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.
Bullish USD Trade: U.S. Service-Based Activity Unexpectedly Picks Up
  • Need red, five-minute candle to favor a short EUR/USD trade.
  • Implement same setup as the bearish dollar trade, just in the opposite direction.
Potential Price Targets For The Release
EURUSD Daily


  • The diverging paths for monetary policy casts a long-term bearish outlook for EUR/USD, but the pair may attempt to break out of the triangle/wedge formation carried over from the previous month should the ISM report push market participants to push out bets for the next Fed rate-hike.
  • Interim Resistance: 1.1052 (November high) to 1.1090 (50% retracement)
  • Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

 

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Sergey Golubev, 2016.02.03 14:48

EUR/USD Intra-Day Fundamentals: ADP Non-Farm Employment Change and 45 pips price movement

2016-02-01 01:45 GMT | [USD - ADP Non-Farm Employment Change]

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - ADP Non-Farm Employment Change] = Estimated change in the number of employed people during the previous month, excluding the farming industry and government.

==========

EURUSD M5: 45 pips price movement by ADP Non-Farm Employment Change news event :



 
Sergey Golubev:

If H4 price will break 1.0869 support level on close H4 bar so the reversal of the price movement from the primary bullish to the primary bearish condition may eb started with the secondary ranging: the price will be located inside Ichimoku cloud.
If H4 price will break 1.0788 support level on close H4 bar so the price will be fully reversed to the bearish market condition.
If H4 price will break 1.0967 resistance level so the bullish trend will be continuing.
If not so the price will be ranging within the levels.

This is +222 pips in profit for now:


 

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Sergey Golubev, 2016.02.04 09:28

EUR/USD Intra-Day Fundamentals: ECB President Draghi Speaks and 57 pips price movement

2016-02-04 08:00 GMT | [EUR - ECB President Draghi Speaks]

[EUR - ECB President Draghi Speaks] = ECB President Mario Draghi speaks at the Deutsche Bundesbank's Marjolin Lecture, in Frankfurt.

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"So even in the face of common global shocks, central banks have the ability to deliver their mandates. But in the euro area, that requires a different monetary policy response than for others. That is because we also face a second set of challenges that are largely specific to us. They result from our institutional structure: conducting monetary policy in a segmented banking and capital market, and without a single area-wide fiscal authority as a counterpart. There are two types of challenges in particular that emerge from this."

"There are forces in the global economy today that are conspiring to hold inflation down. Those forces might cause inflation to return more slowly to our objective. But there is no reason why they should lead to a permanently lower inflation rate."

"What matters is that central banks act within their mandates to fulfill their mandates. In the euro area, that might create different challenges than it does in other jurisdictions. But those challenges can be mitigated. They do not justify inaction."

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EURUSD M5: 57 pips price movement by ECB President Draghi Speaks news event :



 
The global bullsh breakout is going on (on the weekly open bar for now): the price broke Senkou Span line (which is the virtual border between the primary bearish and the primary bullish trend on the chart) on open week bar to be inside Ichimoku cloud for the ranging bullish market condition. So, let's see the price movement on Friday during the NFP, and it may be good to check the price about the following: where this weekly bar will be closed and new bar is open next week just to understand - is it the price just testing the global reversal bullish resistance, or is it already bullish condition which will be the global one upto the end of this year for example ...

 

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Sergey Golubev, 2016.02.05 09:25

Technical Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD (based on the article)

EUR/USD: Bullish. Major resistance at 1.1238, waiting for breakout or correction.


GBP/USD: Neutral: Closing above 1.4667 would indicate the bullish phase to be started.


AUD/USD: Bullish: Target a move to 0.7242 to continuing with bullish trend.


NZD/USD: Bullish: Target a move to 0.6746 for bullish to be continuing.



 

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Sergey Golubev, 2016.02.05 10:55

Trading News Events: Non-Farm Employment Change (based on the article)

What’s Expected:



Why Is This Event Important:

Even though the Federal Open Market Committee (FOMC) appears to be on course to implement higher borrowing-costs over the coming months, the disinflationary environment across the major industrialized economies may keep the Fed on the sidelines for most of the year as central bank officials look for greater evidence of achieving the 2% target for price growth.

However, the persistent slack in private-sector consumption paired with the rise in planned job-cuts may drag on employment, and a soft labor report along with a marked slowdown in wage growth may spark a further depreciation in the dollar as market participants push out bets for the next Fed rate-hike.

How To Trade This Event Risk

Bullish USD Trade: NFP Climbs 190K+, Hourly Earnings Highlight Sticky Wage Growth
  • Need red, five-minute candle following the NFP print to consider a short trade on EUR/USD.
  • If market reaction favors a bullish 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.
Bearish USD Trade: U.S Employment Report Fails to Meet Market Forecast
  • 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.
Potential Price Targets For The Release
EURUSD Daily


  • Even though the diverging paths for monetary policy casts a long-term bearish outlook for EUR/USD, the pair may test the broad range from the previous year as it appears to be breaking out of the downward trend carried over from the end of 2014; will keep a close eye on the Relative Strength Index (RSI) as it approaches overbought territory, with a break above 70 highlighting the risk for a further advance in the exchange rate.
  • Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
  • Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)
December 2015 U.S. Non-Farm Payrolls
EURUSD M5: 57 pips price movement by USD - U.S. Non-Farm Employment Change news event:

EURUSD M5: 133 pips range price movement by Non-Farm Employment Change news event:


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