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Market Analysis And News by Hotforex.com


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Date : 19th May 2015.


TODAY’S CURRENCY MOVERS.


EUR3.png


EURUSD, Daily


The dollar has retained the perkier tone that established yesterday. EURUSD has been moving lower yesterday and this morning. The move has correlated with a fresh spike in Grexit concerns, though the ECB has stressed that it will not cut ELA to Greek banks should Greece miss an IMF repayment, while Draghi and others at the ECB have been stressing that the QE program will be fully implemented.


At the time of writing EURUSD is trading below the 23.6% Fibonacci level and at support created by a pivot candle. I pointed to this level in yesterday as a potential support and suggested we look for the correct price action to find long opportunities. At the time of writing price has not reflected buying interest but 4h Stochastics is deeply oversold and the level that turned price higher the last on May 11th is near. EURUSD is now at key levels. If price turns higher above 1.1131 and today’s bar closes above the rising trendline the daily technical picture maintains its upward momentum. If this doesn’t materialise then the next support level is at 1.1035. Nearest daily resistance level is at 1.1324


2015-05-19_1127.png


Currency Pairs, Grouped Performance (% Change)


This morning’s theme has been EUR weakness against all the currencies. The biggers movers have been EURNZD, EURJPY, EURCAD and EURUSD. The weakest of the lot, EURNZD, is falling lower from a 50 week SMA after creating a shooting star candle yesterday. EURJPY has moved to a pivot support while EURCAD is currently trading at 50 Fibonacci level (measured from May 5th low to the latest high) and EURUSD is also trading at a pivotal support. Therefore a bounce higher in EUR pairs could be in order today.


Main Macro Events Today


RBA Meeting’s Minutes: Reserve Bank of Australia said May’s lack of policy guidance will not limit action that they deem appropriate at future meetings. The minutes to the May meeting, where they delivered an as-expected 25 bp cut to 2.0%, reference the February cut as another time where they did not offer guidance on the future policy path. On the Australian dollar, they not surprisingly said further deprecation is likely and necessary, a view that also found its way in to the quarterly Statement on Monetary Policy.


RBNZ Inflation Expectations rose slightly in the second quarter remaining below the mid-point of the RBNZ target band. The survey showed business managers expected annual inflation to average 1.32 per cent over the coming year and two-year inflation expectations edged up to 1.85 per cent.


UK Consumer Price Index and Core CPI: The headline CPI is expected to remain unchanged at 0.0% y/y in April. That would make it two consecutive months at zero after dipping from 0.3% y/y in February. The on-going impact of lower oil prices and the pound’s assent to seven-year highs against the euro maintains a benign outlook for price pressures. The core CPI is likely to remain at 1.0% y/y, unchanged from the prior month. PPI figures will also be released, where we expect -1.7% y/y figure in output prices.


Eurozone Consumer Price index and Core CPI: At the end of April the ECB report highlighted the decline in inflation expectations has been halted and the numbers confirm that deflation risks have diminished, and that headline rates will continue to rise gradually amid stabilising growth and a weaker EUR and as negative base effects from lower energy prices fall out of the equation. No change is expected in either of the indices. CPI is expected come in at 0.0% and Core CPI at 0.6%.


German ZEW Economic Sentiment: Eurozone GDP data showed a broadening of growth at the start of the year, but recent confidence indicators have been mixed and this week’s round of May ZEW, PMI and Ifo readings are likely to level off as concerns about the strength of the U.S. recovery, along with the slowing in Chinese growth, are weighing especially on investor sentiment. The headline ZEW reading is expected to contract to median 48.8 from 53.3.


US Building Permits are expected at 1,055k in April from 1,042k in March. March of last year was the first time since June 2008 that starts broke above the 1,000k unit pace level before they set a new high in November.


US Housing Starts are expected to climb 8.0% to a 1,000k unit pace in April following the 2.0% rebound to 926k in March. This compares to a recent high of 1,098k in July and a low of 521k in April ’09.


BOC Governor Poloz Speaks on the topic “The Way Home: Reading the Economic Signs,” with a press conference to follow. The four-month high for the Canadian dollar will not be lost on the Bank, but accompanied by strength in crude oil. And data has not yet contradicted the Bank’s constructive outlook beyond Q1. It has been suggested that the Bank is seriously looking at raising its inflation target.


Japan GDP: GDP growth was revised lower to a 1.5% pace (q/q) in the second preliminary Q4 report. No change is expected now and the GDP growth should come in at 1.5%.



EC1.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 20th May 2015.


TODAY’S CURRENCY MOVERS.


EURUSD-D6.png


EURUSD, Daily


EURUSD has remained under pressure since trading sideways at support for yesterday afternoon. ECB pledges of accelerated or expanded QE this week have contributed to the correction we’ve seen this week from Friday’s three-month high at 1.1466. There also remains a lack of substantive progress between the Greek government and creditors in bailout negotiations, despite all too familiar optimistic sound-bites from various officials. The ECB considers widening of eligible Greek assets, but also raising the haircut on Greek collateral according to Greek newspaper Kathimerinini. This would maintain the lifeline for Greek banks, as the net effect should be broadly neutral. Time for a deal is running out, but if Tsipras hopes he can circumvent the Eurogroup and strike a deal at the margins of the upcoming summit in Riga, he is likely be mistaken. Creditors continue to insist on the agreed conditions, even though it is clear that they want to keep Greece in the Eurozone, as the impact of the first member exiting the Eurozone is uncertain.


After trading a bit too long sideways at support yesterday the lack of upside momentum turned into a downside move this morning. EURUSD has fallen below the supporting rising trendline and to a 38.2% Fibonacci level that also coincides with a daily pivot low from May 5th. Today’s low at the time of writing has been 1.1060, only 8 pips above the March 26th high and now the latest complete 4h candle is a hammer. Therefore it seems that market is placing some significance to the March 26th high as support. At the same time Stochastics are edging close to oversold levels. This suggests that the down move is getting overdone. However, at the same time the move below 1.1131 pivotal support created a resistance level that is relatively close to the current price. This combination of support and resistance levels could lead to price stalling at current levels before the direction is resolved. Nearest support and resistance levels are at 1.1052 and 1.1131. Additionally there is intraday resistance at 1.1158. If these are cleared the next significant daily resistance level is at 1.1324.


2015-05-20_1225.png


Currency Pairs, Grouped Performance (% Change)


This morning we’ve seen some USD and GBP strength coupled with EUR and AUD weakness but the moves have been relatively small. DXY has run into a resistance at levels that turned it lower in the beginning of May AUDUSD has been the weakest dollar pair while GBP has been able to resist the USD strength and is practically unchanged.


Main Macro Events Today


Japan Preliminary GDP accelerated to a 2.4% growth pace in Q1 (q/q, saar), much better than expected following a downwardly revised 1.1% pace in Q4 (was +1.5%). Consumption grew at a 1.5% pace in Q1 (q/q, saar) contrary to an expected slowing following the 1.5% rate in Q4.


Australian Westpac Consumer Sentiment survey improved to 6.4 per cent in May following an interest rate cut and budget. Improvement from previous number (-3.2%) tells of a significant brightening in the outlook consumers have on their near term financial future. A surprise tax break for small businesses contributed to the positive sentiment.


Norway Gross Domestic Product growth was weak. According to seasonally-adjusted figures, gross domestic product for Mainland Norway rose by 0.5 per cent in the 1st quarter of 2015, while the growth in the second half of 2014 has been revised downwards to a growth of 0.4 per cent. For the first time since the 2nd quarter of 2010, there was no growth in employment.


Bank of England Minutes to the may MPC meeting showed a unanimous vote to keep policy unchanged. The minutes showed that while there was some uncertainty about the different estimates of spare capacity within the economy, the best collective view was that it amounts to around 0.5% of GDP and that it is “likely to be fully absorbed within a year”. So while the quarterly inflation report last week and the unanimous vote on unchanged rate indicate that rates won’t go up soon the diminishing slack in the economy signals that inflation will likely go up in the medium term and in line with that “all members agreed that it was more likely than not that bank rate would rise over the three-year forecast period”.


BoE MPC Vote Hike: BoE minutes to the April MPC meeting showed unanimous votes to maintain the repo rate at 0.5% and the QE total was also unanimously maintained at GBP 375 billion. No change this time either as the MPC voted 9-0 to keep interest rates at 0.5 percent for now.


FOMC Minutes.


2015-05-20_1224.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 20th May 2015. (Second Analysis)


TWITTER STOCK TRADING AT SUPPORT.


TWTR-W.png


TWTR, Weekly


On April 28th Twitter quarterly results were leaked before they were officially due out. As the figures were worse than expected, the stock collapsed during the last hour of regular trading session in NYSE. Company had earlier provided guidance that the first quarter revenue would be $456.8 million which was also the figure analysts had put forward. However, twitter reported Q1 revenue of $436 million and thus missed the expectations and its own guidance. This and the lacklustre growth in the user base were the reasons for an 18% drop in share price on April 28th. At the time of writing TWTR is trading near $37, almost 30% lower than this year’s highest print.


The stock is therefore trading at a steep discount compared to the highest prices paid this year and even to the 200 day SMA at $44.74. This discount is excessive in the light of the projected revenue decline for this year. Twitter is expected to generate revenue of $2.17 to 2.27 billion instead of the market expectation of $2.37 billion. We are therefore talking about at most a 8.43% revenue decline while the stock is trading over 16% below the long term (200 days) average price and 30% below the highest prices paid for the year. Also, the company is expected to have a higher revenue growth in 2015 than Facebook and LinkedIn as revenues are expected to grow by 60% this year. Therefore it is likely that the stock is on institutional value buy list at the current levels and this should provide an opportunity for us as well.


Technically TWTR is now trading relatively close to December 2014 lows with weekly Stochastics firmly in the oversold territory. The December low of 34.62 is in the middle of the lower Bollinger bands (1.5 stdv at 36.29 and 2 stdv at 33.50). This suggests that the stock is trading right above support and the downside is therefore limited while the line of least resistance is to the upside. Nearest support and resistance levels are at 36.07 (January low) and 45.13 (March 9th low).


TWTR-D.png


TWTR, Daily


Stochastics Oscillator has been moving slightly higher as price moves sideways between 36.90 support and 38.20 resistance. The next support at 36.52 was defined as price created a hammer candle on May 6th. The next significant resistance level after 38.20 is the 50% Fibonacci level that coincides with the March 9th low at 45.13 (see the weekly chart).



TWTR-240.png


TWTR, 240 min


Bollinger bands have been narrowing which is typical before a breakout happens. At the time of writing Oscillators (Stochastics, RSI and MFI) are pointing higher but as the upper Bollinger bands acted as a resistance for a rally attempt yesterday and today the stock might move slightly lower before it’s ready to break above the resistance and advance.


Conclusion


Technically TWTR stock is trading at deep discount to long term averages and close to levels that have been able to turn price higher in the past. Twitter is also expected to see healthy revenue growth that even exceeds expected growth for Facebook and LinkedIn. This combined with the technical picture makes TWTR an interesting stock for professional value investors. At the moment TWTR does not represent a trading opportunity but rather is a stock that has good medium to long term potential. When price has dropped massively market participants usually wait until the dust settles before they start buying. Also, when institutions buy a stock they try to accumulate positions without driving the price higher. That’s likely the reason for the stock has been moving sideways over the last week and it could take a little while before this process is over and the stock is ready to move higher. However, when it does there will be opportunities for small investors and traders alike. I look for series of higher lows to indicate that the institutional accumulation process is nearing completion. Alternatively a fast move close to the 34.62 support would be a reason to look for lower time frame buy signals (as per my Live Analysis Webinars). My Target 1 is at $43.90 (50 week SMA) and Target 2 at $49.80. Should the stock start creating a series of lower highs and keep breaking supports the technical picture would deteriorate and this analysis would need to be revaluated.




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 21st May 2015.


TODAY’S CURRENCY MOVERS.


EURUSD-D7.png


EURUSD, Daily


The FOMC minutes took wind out of the dollar’s sails yesterday, though in confirming that most members were not thinking of hiking in June the minutes were near expectations. Minutes to April 28, 29 policy meeting indicated a June rate hike was unlikely and probably won’t have sufficient data to confirm that conditions for raising rates are in place. Participants had a wide range of views on timing of rate lift-off due to uncertainties over strength of the US economy after Q1 weakness. Data dependency was again stressed with rate decisions to be made on meeting-to-meeting basis.


I wrote yesterday that the combination of support and resistance levels (nearby) could lead to price stalling at current levels before direction resolved. This is exactly what happened yesterday and over the Asian session. EURUSD has been moving sideways between low of 1.1060 and high of 1.1160. As nothing much has happened overnight yesterday’s analysis and support and resistance levels are still valid (nearest support and resistance levels 1.1052 and 1.1131). Price moving sideways confirmed the indication that the down move was overdone but there are still headwinds to EURUSD moving higher: the move below 1.1131 pivotal support created a resistance level that is relatively close to the current price. This same resistance coincides with a support level in the US Dollar Index. As the latest complete 4h candle closed above 1.1146 the probabilities of EURUSD moving higher have now increased but the region of intraday resistance at 1.1158 has still proven to be a challenge. The next significant daily resistance level is at 1.1324.


2015-05-21_1215.png


Currency Pairs, Grouped Performance (% Change)


GBP has been the strongest currency today and the GBPUSD the performing pair. The shooting star candle in DXY from yesterday and the GBPUSD at support higher from a support yesterday support the bullish sentiment for GBP against the USD. US Dollar has been weak across the board and the DXY moving below the low of yesterday’s shooting star candle low promises more strength to EURUSD, GBPUSD, AUDUSD and NZDUSD (and more weakness to USDCAD, USDCHF and USDJPY). Both AUDUSD and NZDUSD are trading above a pivotal support and latter at weekly Bollinger Bands. USDCAD is trading at upper daily Bollinger Bands while USDJPY is reacting lower from March resistance. USDJPY has some previous resistances that it has broken and could therefore find support at levels nearby.


Main Macro Events Today


Australian Consumer Inflation Expectation accelerated to a 2.4% growth pace in Q1 (q/q, saar), much better than expected following a downwardly revised 1.1% pace in Q4 (was +1.5%). Consumption grew at a 1.5% pace in Q1 (q/q, saar) contrary to an expected slowing following the 1.5% rate in Q4.


Australian Westpac Consumer Sentiment rose slightly to 3.6% from the earlier 3.4%. This increase is in line with the confidence boost measured yesterday by the Westpac Consumer Sentiment index as increased economic activity usually also leads to higher prices.


Chinese Manufacturing PMI survey showed continuing weakness in China. This brings into focus the widespread expectations that the Chinese authorities would act on any signs of a serious downturn limited the market reaction. The number was a thirteen month low.


German Manufacturing PMI fell back more than anticipated, with the manufacturing PMI dropping to 51.4 from 52.1 and the services reading to 52.9 from 54.0. Reading remains firmly above the 50 mark, but the weaker than expected numbers tie in with a marked drop in the ZEW and signal a slowdown in growth momentum.


Eurozone Manufacturing PMI figures were mixed, with the manufacturing reading unexpectedly rising to 52.3 from 52.0, interestingly on the back of a rise in the French reading, while the German number fell back. The Eurozone services PMI meanwhile disappointed and dropped to 53.3 from 54.1, leaving the composite at 53.4, down from 53.9 in the previous month.


UK Retail Sales surprised positively and came in at 4.7% instead of expected 3.8%. Retail sales were expected to ease again after this year’s high in February was followed a lower reading in March.


Philadelphia Fed Manufacturing Survey should improve to 8.0 in May after 7.5 in April.


US Unemployment Claims: it is expected that initial jobless claims rose to 271k last week from 264k the preceding week when the claims figure hit the lowest level in nearly 15 years.


2015-05-21_1156.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 21st May 2015.(Second Analysis)


SILVER CLOSE COMPLETION OF A BOTTOMING PROCESS.


Silver-W.png


Silver, Weekly


Silver has now broken out of the bear channel. The breakout was preceded by a consolidation that started in December 2014 and lead to market creating higher lows at the weekly Bollinger bands. Currently Silver is trading relatively close to the upper Bollinger bands and has reacted lower from them and 50 week SMA. The 38.2% Fibonacci level that coincides roughly with weekly closing high from March has supported price this week. Support levels: 16.97, 16.36 and 15.55. Resistance levels: 17.77 and 18.50.


Silver-D.png


Silver, Daily


The move lower from the 17.77 resistance was a strong one. This one day move eroded more than three day’s gains. This suggests that there could be more downside volatility in store. The area from 16.37 to 16.60 looks interesting as a support level and a 50% Fibonacci level coincide with a sideways consolidation and an apex of a triangle formation. This area also coincides with the descending trendline that is now likely to provide support after resisting price moves higher earlier. Support levels: 16.88, 16.60 to 16.37 and 15.85. Resistance levels: 17.48 and 17.77.


Silver-240.png


Silver, 240 min


Lately the price of Silver has been finding support at 50 period SMA and the region of 17.00 dollars but the higher time frame picture hints the downside is not yet over and the best buy levels should therefore be at lower levels. The 16.60 level used to resist moves higher and Silver should therefore attract buyers if price moves to the level. At the time of writing Stochastics indicator is rolling over and suggests the downside momentum is resuming.


Conclusion The long term picture is positive with Silver now trading above the descending trend channel. This market has consolidated, created higher weekly lows and now broken above the down trendline. Such action indicates that the bottoming formation is near its completion. Short term price is still relatively close to the upper end of the range and weekly Bollinger bands. This suggests that the best low risk buy opportunities are lower. I look for buy signals in the region of 16.37 to 16.60 where several technical factors come together. My targets for short term trades from the above mention region are 17.00 (T1), 17.48 (T2) and 18.00 (T3).


Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 22nd May 2015.


TODAY’S CURRENCY MOVERS.


EUR4.png


EURUSD, Daily


Yesterday’s weaker than expected existing home sales in US and a dip in the Philadelphia Fed Manufacturing index supported forecasts for only tepid pick up in Q2 growth after a very weak Q1. The May Philadelphia Fed Survey disappointed. The figure came in at 6.7 instead of 8.0 expected by the analyst consensus. This increased expectations that the Federal Reserve will maintain its current dovish stance.


EURUSD has been trading in the low-to-mid 1.11s, above Wednesday’s 1.1060 low. There was a lack of substantive progress at the latest summit in Riga between the Greek government and creditors in bailout negotiations. The on-going Grexit uncertainty might have been the reason the euro’s upside has been curtailed, while the May German IFO today should affirm the slowing in growth momentum that was seen in the ZEW and PMI surveys. ECB’s Draghi and BoE’s Carney are set to speak at an ECB conference on central banking in Portugal and today’s European data calendar is unlikely to give markets any reason to cheer. Another speaker worthy of mention is the Fed Chair Janet Yellen speaking later on today.


The resistance area created by the May 11th pivotal low has been holding EURUSD back but yesterday’s daily low was higher than the previous day’s low. This with the fact that price has moved higher from today’s open suggests modest bullishness on EURUSD. Daily bar lows also seem to honour a trendline drawn from April low. Stochastics are oversold and the lower Bollinger bands are catching up with the price. US Dollar index is looking weak as it’s trading below the shooting star candle lows from day before yesterday. Nearest support and resistance levels: 1.1052 and 1.1324.


2015-05-22_1035.png


Currency Pairs, Grouped Performance (% Change)


Modest EUR strength and USD and GBP weakness is dominating the Currency Movers charts today. AUD, NZD and JPY performance has been mixed. EURJPY, EURAUD, EURCAD and EURNZD are reacting higher from intraday supports and should EUR make a move today, these pairs are likely to follow.


Main Macro Events Today


German Gross Domestic Product (Q1) growth slowed to 0.3% q/q as expected, a significant decrease from the fourth quarter last year which was 0.7%. Still, taken the two quarters together, the underlying trend is robust. The very strong labour market, the rising wage growth and the boost to real disposable income from lower oil prices reinforced Q1.


US Consumer Price Index (YoY) is expected to remain unchanged, while the core index, which excludes food and energy products, is expected to rise to 1.7%, 0.1% lower compared to previous year’s result.


Chinese Manufacturing PMI (YoY) is expected to expand to 1.0% in April, 0.2% lower compared to the previous month. It is seen rising 0.1% on a monthly comparable basis in April after the expansion of 0.7% m/m in March and 0.9% m/m in February.


2015-05-22_1031.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 25th May 2015.


USDJPY TRADING NEAR MARCH HIGH.


USDJPY-Weekly.png


USDJPY Weekly


USDJPY has been moving side ways since the beginning of December 2014. The deepest correction has the retracement to 38.2% Fibonacci level in mid-December and was followed by another in January that attracted buyers just above the previous low. Since then price has challenged the previous high once and after failing to penetrate the resistance it created a higher low. Now the pair has yet again moved to the upper weekly Bollinger Bands. At the same time we have the US Dollar Index at a level that resisted moves higher in March this year.


USD has been relatively strong against the JPY throughout period it has been correcting against the other currencies and as the weekly lows have been higher with the latest CPI number from States surprising to the upside it could well be that the upper end of this range will eventually give in. At the end of the day it is more likely that the US Fed will hike the rates before the Japanese central bank which could even come up with yet another round of stimulus.


USDJPY-daily.png


USDJPY Daily


Last week’s rally lifted USDJPY to the upper end of the range that has limited the pair’s movements since the end of the last year. Stochastics is overbought and price is reacting lower after moving above the upper daily Bollinger Band and also very close to the March high. If today’s daily candle closes to current levels or lower price has created a bearish shooting star candle. Stochastics is about to move below its three day moving average and could give a bearish signal should the weakness continue. Nearest support and resistance levels are 120.84 to 120.50 and 122.02.


USDJPY-240min.png


USDJPY 240 min


The pair fell lower after hitting a historical resistance at 121.68 and has since found support at a minor support level that coincides with a high from Wednesday last week. This lack of upside momentum and a correction lower has eased the overbought condition in this timeframe and brought the oscillators lower. The nearest more significant support area (120.83 – 120.61) is currently near the lower Bollinger Bands and 38.2% Fibonacci level while the next major resistance is at 122.02.


Conclusion


Price is trading close to a longer term resistance and we could see market creating an exhaustion candle (shooting star). Today’s price action however might not be that important as many significant markets have been on holiday. Whenever a market is trading close to a resistance one should be looking for shorting opportunities. This market is trading near its resistance levels and therefore I would only initiate long positions after a correction to a significant support. Due to divergent inflation expectations and relatively strong US economy the dollar yen pair should eventually move higher but as usual a low risk entry would be preferable.Taking advantage of corrections to significant support levels such as the range created by Friday’s low at 120.61 and 1.5 stdv Bollinger Bands at 120.83 would be a preferable strategy to buying close to a resistance. Look for confirming price action at the key levels. If aforementioned support level fails to attract buyers assumptions in this analysis need to be re-evaluated.


Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 26th May 2015.


TODAY’S CURRENCY MOVERS.


EURUSD-daily.png


EURUSD, Daily


Yesterday the Fed Vice Chairman Fisher commented to the Reuters that he sees rates gradually rising to reach 3.25-4.00% by 2018. He said that the start of the tightening cycle would be determined by data, not a date. And that it is misleading to give so much importance to the Fed’s first rate hike. As the VC Fisher pointed out the rate hikes depend on the data, which gives the Fed a lot of leeway in determining the future interest rates policy.


Last Friday’s CPI surprise from US lifted the dollar index higher and sent the EURUSD lower. My view has been that with Fed being dovish EURUSD having a major correction without an external event would be unlikely. Now such an event has occurred and the market psychology has once again changed to favour the dollar. But this could change. As we have seen the mood swings in this market are constant and can change very quickly. The real test of this newly found readiness to bid for the USD comes when EURUSD hits the vicinity of March and April lows.


After the better than expected CPI figure on Friday pushed EURUSD through the support levels the pair has been drifting lower and crossed below the 50 day MA and lower Bollinger Bands. EURUSD has declined for six days without a decent rally higher and Stochastics is deeply oversold. That should mean that this downtrend is getting closer to a point where it is vulnerable to corrective rallies. Should there be a rally to the previous support area (1.1084 to 1.1131) it would make sense to look for shorting signals in that range. The 1.1131 resistance is a weekly low from two weeks ago and 1.1084 is a 38.2% Fibonacci level. The next support level is a 61.8% Fibonacci retracement at 1.0845 coinciding with daily highs from April. This could be a reasonable target for intraday short trades.


2015-05-26_1006.png


Currency Pairs, Grouped Performance (% Change)


USD strength with EUR and JPY Weakness are the clear themes this morning. GBPUSD has created a lower high in daily and is now breaking below a support at 1.5447. Next major support area: 1.5046 to 1.5193. USDJPY pushed higher through the resistances and is now trading above the March high of 1.2202. GBPJPY is trading close to a resistance created by December 2014 high but has found support from a daily sideways range and reacted higher.


Main Macro Events Today


US Durable Goods Orders (Apr) is expected down to -0.5% with shipments growing by 0.5% and inventories by 0.2%, an indication that more and more inventory is held out of the market.


US New Home Sales (MoM) (Apr) is seen rising by 2.9% to 495K compared to previous month’s results which was at 481K. Although the result is higher from March’s results, it is lower by 8.83% in relation to February’s result.


US Consumer Confidence (May) is expected to fall to 93.0 from 95.2 in April, a decrease of 2.36%. Other confidence indicators have declined in May, and Consumer Confidence is more likely to follow them.


2015-05-26_0953.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 26th May 2015. (Second Analysis)


GOLD AT 50 DAY SMA.


Gold-W.png


Gold, Weekly


As USD has rallied higher over the last few days the price of Gold (in dollar terms) has moved lower. The high of the last week was above a resistance level at 1224.50 at a 50 week moving average. Now price is approaching a 50% Fibonacci retracement level at 1187. The 61.8% Fibonacci retracement at 1176.40 is relatively close to a weekly pivot low from April and coincides with daily Bollinger bands thus highlighting a level that has in the past turned price higher. However, before price can get that far there are support levels for bears to deal with. These support levels are visible at daily and 4h charts. In terms of higher time analysis Gold is in a sideways range with an upside bias as it has been able to make higher lows and (on a closing basis) a higher high. However, it seems to me that the resistance at 1224.50 to 1232 or so will need some work and real commitment from the bulls before it can be penetrated.


Gold-D.png


Gold Daily,


Price has broken below a support (now resistance) at 1200.80 and has fallen to (and slightly under) the 50 day SMA. This level is the closing high (highest close) of sideways move from the beginning of May. Stochastics are getting oversold and price is trading at a level that used to be a resistance. Nearest support and resistance levels are 1193.3 and 1200.80. The next important S&R levels after these are at 1177.90 and 1214.60.


Gold-240.png


Gold, 240 min


Trendline analysis in four chart reveals how Gold is trading at descending channel bottom that coincides with a range created by a 4h bar high (also a daily high) from May 12th and daily low from May 13th. Stochastics is overbought and the four hour bar could be creating a small pin bar indicating that price could reverse and move higher from here. Also, this price action takes place outside the lower Bollinger Bands adding to the oversold indication. Fibonacci levels coincide with potential resistance levels at 1202, 1207.8 and 1212.50. The region of 1207.80 coincides with the descending price channel and could act as a limit to potential upside moves.


Conclusion


Gold is in a sideways range with an upside bias as it has been able to make higher weekly lows and (on a closing basis) a higher high. However, it seems to me that the resistance at 1224.50 to 1232 or so will need some work and real commitment from the bulls before it can be penetrated. For short term traders Gold is at levels it could stage a small rally from. After correcting lower earlier today Gold has reached a level that has support in both daily and 4h time frames. With Stochastics oversold in both timeframes and market showing signs of downside momentum waning this level could cause the price of Gold to rally. Should there be appropriate long entry signals to justify buying at these levels, the Fibonacci levels in 4h chart could provide us with targets: T1 at 1202, T2 at 1207 and T3 at 1212. The region of 1207.80 coincides with the descending price channel and could act as an upper limit to potential upside moves. Follow the intraday charts to decide whether price action confirms the idea.


Janne Muta


Chief Market Analyst


HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 27th May 2015.


TODAY’S CURRENCY MOVERS.


EURUSD.png


EURUSD, Daily


Yesterday’s US reports revealed small upside surprises. The durable goods figures for equipment beat estimates modestly despite a 0.5% April headline orders drop, while new home sales rose 6.8% in April to partly reverse a March plunge. The GDP growth outlook remains unchanged at 2.5% in Q2. We saw a May consumer confidence rise to 95.4 that defied declines in all other confidence surveys for the month, and the Richmond Fed index bounced as expected to 1 from -3. Only the Dallas Fed index disappointed, with a drop to a -20.8 six-year low from -16.0 in April. Additionally we had Richmond Fed’s Lacker speaking yesterday. He likes June as a “good time to begin considering raising rates,” suggesting that weak Q1 data is transitory and inflation is firming again after oil rebounds from its slide. Lacker is a known hawk in the FOMC.


EURUSD has recouped the 1.0900 level during Asian trade after leaving a one-month low at 1.0863 yesterday. The pair has fallen some 4% in seven of the last eight trading days after making a three-month peak. I suggested yesterday that the support at 1.0845 could work as a target for intraday trades as 61.8% Fibonacci level coincides with daily highs in April. Market turning higher slightly above this level suggests that others are eyeing the same level. Yesterday’s close was outside the lower 2 stdv Bollinger Band and should today’s close be inside the band probabilities of price rallying higher increase. The next significant resistance area is at 1.1084 to 1.1131.


2015-05-27_12161.png


Currency Pairs, Grouped Performance (% Change)


Apart from movements in CHF the price action in other currencies has been relatively small. Money has been moving into CHF from other major currencies and it is up by 40 to 50 basis points or more against all the other currencies except EUR. CHF has been especially strong against the JPY, up by over 0.75% at the time of writing. Euro’s relative strength against CHF adds to the EUR strength we are seeing against the USD and other majors. There is consistent JPY weakness even though the movements have most of the morning been subdued. An exception to this is CHFJPY. USD performance is a bit mixed after hitting a historical resistance level in DXY. From this point of view it’s interesting that EURUSD is close to a support, USDCAD is trading at resistance and NZDUSD close to a weekly support. Also USDCHF is reacting lower from a combination of historical resistance and upper Bollinger bands together with a 50 day SMA.


Main Macro Events Today


German Gfk Consumer Confidence Survey (Jun) rose to 10.2 from 10.1. Economic confidence is improving, as is the willingness to buy, despite the fact that income expectations eased slightly. This is a confirmation that the German recovery remains on track.


Japan Retail Trade (YoY) is expected to increase by 5.4% in April. Previous result dropped 9.7% y/y in March from a revised -1.7% y/y in February (was -1.8% y/y previously). Large retailers saw a 13.0% y/y plunge after a 1.3% February gain. However, we have to take into account that sales surged in March 2014 ahead of the April tax hike.


2015-05-27_1205.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 27th May 2015. (Second Analysis)


EURAUD UP AFTER A HAMMER CANDLE YESTERDAY.


EURAUD-W.png


EURAUD, Weekly


EURAUD is moving sideways in wide range with support area between weekly lows at 1.3680 and 1.3912 while upper end is limited by the 50 week SMA and 38.2% Fibonacci retracement roughly coinciding. The nearest weekly high at 1.4277 is almost at level with the 38.2% Fib level at 1.4317 while the previous weekly pivotal highs coincide with the 50 week SMA. As 50 week SMA is pointing down this sideways market has some long term downward tendency. The lower weekly highs contribute to this picture but the fact that the weekly lows have been somewhat equal in March and April points to weakness in downside momentum. The latest weekly pivot low (at 1.3912) being so much higher than the previous lows is a positive indication.


EURAUD-D.png


EURAUD, Daily


In the daily picture EURAUD is moving higher from the proximity of a support level created by a sideways move in April this year. Yesterday’s candle was a hammer that is a bullish signal (points to higher prices) and now Stochastics is giving a positive signal by crossing above the signal line. Hammer candle also created a higher low which supports the bullish daily picture. There are no major daily resistance levels nearby while the first daily candle high that could cause the price to stall is at 1.4197. Above this are the upper Bollinger Bands and then the weekly highs. Nearest support levels are at 1.3950 and 1.3912.


EURAUD-240.png


EURAUD, 240 min


In 4h timeframe the recent price move took EURAUD to upper Bollinger Bands and close to a 4h pivot candle low at 1.4117. Not so far from the level is also a 50% Fibonacci level (at 1.4112 measured from the May 22nd high to the recent low of 1.3950). Over the last two four hour candles price has retraced back to a recent pivot and found buyers between 38.2% and 50% Fibonacci levels (measured from yesterday’s low to today’s high). The reaction we have seen from this level is healthy and supports the positive picture in the daily time frame. The pair is close to its recent 4h range highs as also reflected in Stochastics being at overbought threshold. At the time of writing the reaction from support has been strong and has coincided with the upsurge in EURUSD from the region of support I suggested in my Currency Movers Report. If the EURUSD strength continues EURAUD is likely to move higher as well.


Conclusion


The long term picture (weekly) is range bound which gives opportunities for swing traders at the range edges. Now that the daily picture has indications that buyers could be taking price higher (higher low and a hammer candle with Stochastics pointing higher) we look for price action based buy signals when there are retracements to intraday support levels. The daily highs are natural target levels with first one being at 1.4197 and the next at 1.4277. A break into new highs (above 1.4115) and a daily close above yesterday’s high at 1.4092 would be further confirmations of the bullish tendency seen in the daily chart. A failure to move above these levels accompanied with downward intraday trends would negate the positive picture.


Janne Muta


Chief Market Analyst


HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 28th May 2015.


TODAY’S CURRENCY MOVERS.


eur.png


EURUSD, Daily


EU says that further progress is needed in Greece talks. Yet again Greek officials are suggesting a quick deal with creditors, although today, it admittedly sounded more like this was just what Greek wants rather than a done deal. By contrast, creditors remain pessimistic and an EU spokeswoman said there are still issues that need to be resolved, with further progress needed in talks that will continue in coming days. Varoufakis calls for Greek debt restructuring, while saying that the IMF has a very dark history over the past 20-25 years. A Greek government spokesman meanwhile said the country is not planning to bundle its IMF repayments and aims to have a deal by Sunday. She also said that she is working on a common document with creditors. Creditors meanwhile continue to highlight that there are still considerable differences and Varoufakis’ comments on the IMF highlight that his tone hasn’t softened. This obviously is not helping. Neither are the conflicting messages coming out of Greece and it should be clear by now that only when creditor officials announce that a deal is imminent we can actually believe it. Greek officials seem to equate their hope for a quick deal, with actual progress. At the same time ECB’s Nowotny has commented the wider Eurozone economy by saying that there is no “currency war” in a historical range, but he admitted that the ECBs quantitative easing program has helped the Eurozone economy by weakening the EUR. However, he also warned that widespread negative yields can’t be normal.


We have seen some short term bullish momentum since yesterday in EURUSD and need to now have some follow-through (or more consolidation) to avoid further decline. At the time of writing EURUSD is trading inside yesterday’s pin bar range after it fell back from 1.0950 where it was close to the 50% Fibonacci level and Monday’s low. After yesterday’s reaction higher from support level and a close inside the lower Bollinger band the likelihood of price turning higher has increased. However, I would now like to see price creating a higher low and close above yesterday’s high to further support the reversal indication. This would suggest that price could move through the moving average resistance and to next resistance where previous support and 38.2% Fibonacci levels coincide. EURUSD is now approaching the levels that attracted buyers yesterday. Intraday price action at these levels is of high importance as we are looking for indications on markets’ collective opinion of this potential momentum reversal. Should the current support fail, the next significant daily support level is at 1.0660.


2015-05-28_1616.png


Currency Pairs, Grouped Performance (% Change)


Today’s clear trend is the AUD and NZD weakness. When compared to the USD currencies more or less have had the same percentage change (± 40 basis points) except AUD and NZD that have fallen 122 and 155 basis points respectively against the USD. Apart from the slight USD strength today the Euro and CHF have had some strength against the other currencies while GBP and JPY have had a mixed performance. Again, it’s the AUD and NZD weakness that have moved EURAUD and EURNZD more than other EUR pairs.


Main Macro Events Today


UK Gross Domestic Product (QoQ) Preliminary Q1 GDP came in sub-expectations at +0.3% q/q, half the median forecast and down from the 0.6% growth of Q4. Second estimation was expected at 0.4%, but the actual result was equal to previous 0.3%.


US Initial Jobless Claims came in higher than expected. The 7k initial claims rise to 282k in the fourth week of May extends the 11k bounce to 275k (was 274k) in the BLS survey, as claims continue to reverse the tightness in the prior three readings that started with a 262k cycle-low at the end of April. Claims are still tight versus pre-May levels however, and are displaying a cyclical downtrend that became obscured in early-April by a temporary spike around the Easter holiday period.


US Pending Home Sales (MoM) is expected to increase by 0.9% in April compared to previous result 1.1% in March. This is a leading indicator of the housing market in the US and the economy as a whole.


Japan National CPI Ex-Fresh Food (YoY) is expected to increase by 0.2% in April. An increase is expected after Core CPI improved to a 2.2% y/y pace in March from 2.0% y/y pace in February and 2.2% y/y in January. But the trend deceleration should be worrying policymakers.


2015-05-28_1613.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 29th May 2015.


TODAY’S CURRENCY MOVERS.


eur1.png


EURUSD, Daily


According to yesterday’s release US Initial jobless claims rose 7k to 282k (median 271k) for the week-ended May 23 from 275k (was 274k). Continuing claims rose to 2,222 from 2,211k for the week-ended May 16. This is near levels last seen in 2006. This weeks spike and the recent volatility is likely due to seasonal factors surrounding the Easter holiday.


The Preliminary annualized Gross Domestic Product data out today is expected to be revised to -0.9% from 0.2% in the release, following 2.2% growth in Q4. This report will give us more give more insights regarding US economy and its improvement. Greece continues to hang over the Eurozone, with wider market sentiment and hopes for a deal by the end of the month quickly fading. Yesterday’s deal-no deal comments by Greece and its creditors were more extreme than usual. It seems Tsipras was forced to express reassuring and optimistic comments to prevent panic and further deposit outflows ahead of the upcoming pension and wage payments. However, these statements are in conflict with creditor officials, highlighting that Greece is increasingly desperate for a quick deal since the extra time is over.


Yesterday the pair moved up to 1.0965 resistance level where the 50-day SMA coincides with the 50% Fibonacci retracement and closed above previous day’s high. Declining tops and bottoms form a downtrend and as we have now seen the expected upside reaction from 1.0848 support (coinciding with 61.8% Fibonacci retracement level drawn from the March 13th low to the May high) the chances have improved that the recent downward trend has reversed. Today’s price action and upside momentum have been subdued. The 1.1093 support at pivot candle high was enough to reverse an intraday down move today but there has not been a decisive move above yesterday’s high. If there is no strong decline today the weekly candle is will create a bullish pin bar. In this context the 50 day SMA is a minor resistance and we should see price moving higher next week. The intraday price action after the US GDP figures today (12:30 GMT) should give us more indications on for things to come.


2015-05-29_1418.png


Currency Pairs, Grouped Performance (% Change)


Today’s intra-day performance shows clearly the NZD weakness against all major currencies with moves extending up to approximately 70 basis points. AUDNZD has moved higher after a hammer candle indicated further upward momentum but has now hit a resistance at early may range low. NZDUSD has dropped below an important weekly support level. JPY is showing some varying strength against all major currencies, with CHFJPY being an exception and NZDJPY moving strongly, down by 75 basis points and at lower Bollinger Bands at the time of writing. GBP has been weak while USD has had a mixed performance.


Main Macro Events Today


US Gross Domestic Product (Q1) is expected to be revised to -0.9% from 0.2% in the release, following 2.2% growth in Q4, expecting to give more insights regarding US economy and its improvement. Forecast risk: downward, given outsized revisions in source data for trade and inventories. Market risk: downward, as a weaker report could impact the already-fragile Fed rate hike timing.


Canada Gross Domestic Product is expected to increase by 0.2% in April at a moderate pace from the previous result that kept the percentage unchanged. The Q1 GDP report may be anti-climactic as anything between +0.5% to -0.5% will roughly match the BoC’s flat estimate. The key to the policy outlook remains, of course, what happens following the oil shock.


US Chicago purchasing managers’ Index is expected to come in at 53. Chicago PMI rose 6.0 points to 52.3 in April, better than expected, after increasing 0.5 points to 46.3 in March as the index continues to correct from the 13.6 point plunge in February to 45.8 (which was the weakest reading since July 2009). Both employment and new orders increased, and inventories declined. Prices paid also fell. The data are consistent with the Fed’s view that some of the weakness in Q1 was due to temporary factors.


2015-05-29_1352.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 29th May 2015. (Second Analysis)


US Q1 GDP GROWTH REVISED LOWER TO -0.7%.


USDCAD.png


The United States’ Q1 GDP growth was revised lower to -0.7% pace versus a 0.2% pace in the Advance report. It compares to a 2.2% clip from Q4. For the latest report, consumption was nudged lower to 1.8% versus 1.9% previously, and is down from a 4.4% Q4 rate. Fixed investment was bumped up to -1.3% versus -2.5% previously. This was due to a 2.8% drop in nonresidential activity, versus -3.4% previously, as structures fall 20.8% compared to -23.1% (in large part due to shrinking rig counts in the oil industry).


Residential construction was boosted to a 5.0% pace from the prior 1.3%. Government consumption was revised lower to -1.1% from -0.8%. Inventories added $15.0 bln, have of the original $30.3 bln contribution. Net exports subtracted $77.0 bln versus -$50.7 bln. The chain price index was steady at -0.1% previously, and is down from Q4's 0.1% and Q3's 1.4% rate. The core rate posted a 0.8% rate from 0.9% previously, and versus 1.1% in Q4 and 1.4% in Q3.


The US GDP figure was slightly better than expected and almost in line with analyst expectations. It therefore didn’t have a significant immediate impact on USD. The only dollar pair moving more strongly after the announcement is the USDCAD as the Canadian GDP number came out at the same time and was a disappointment. USDCAD is up by 0.66% at the time of writing and approaching yesterday’s shooting star high at 1.2538. Today’s high at the time of writing: 1.2518. Fibonacci levels in the above chart point to potential support levels with 38.2% coinciding with 50 day SMA and 50% with a sideways move from mid-may. The US Dollar Index (DXY) is still trading at intraday support created by lower Bollinger Bands that have supported the index since yesterday.


Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 1st June 2015.


CURRENCY MOVERS OF 1st June 2015.


EUR-Daily-Chart.png


EURUSD, Daily


The Q1 GDP growth figure from last Friday wasn’t quite as weak as the median suggested, falling “only” 0.7%. But, the composition of that report, along with recent data, doesn’t indicate Q2 is likely to bounce sharply. Also, it’s still not clear how much of this sluggishness can be blamed on “transitory” factors. Nevertheless, a Fed rate hike in September is still in the cards, as indicated by the Median forecast. Fedspeak of late, even from the doves, has suggested policymakers want to start the normalization process. But will that be possible as soon as next quarter? The FOMC will need to see stronger data over the next couple of months to make lift-off credible.


According to reports, the Greek Prime Minister Tsipras is in talks with Merkel and Hollande. With the end of May deadline gone Mr Tsipras once again hopes to bypass the negotiations with the Brussels group and puts his hopes on talks with Merkel and Hollande. The three had a reportedly “constructive” telephone conversation yesterday and Merkel and Hollande are set to meet today. Tsipras meanwhile blamed the lack of progress on the “absurd” proposals by certain institutions, which ignore recent democratic decisions in Greece. In an article for France’s Le Monde, he said that the plans for the pension system are not suitable for a civilized country while warning that it would be a bit mistake to think that finding a solution was just a Greek issue and that it is important for the whole of Europe. Not comments that signal a softening of the Greek stance.


EURUSD moved below Friday’s low this morning and is currently trading inside the daily pivot candle from May 27th and inside the Bollinger Bands with Stochastics pointing higher. Last week’s doji candle suggests that buyers are prepared to buy not so far from the current levels. At the time of writing the pair is trading higher intraday support level 1.0904 and lower 4h Bollinger bands. This could lead to a rally but now that the pair has moved below Friday’s low there are resistance levels ahead. Therefore such rallies could be short lived and price is likely to be range bound today between Friday’s high of 1.1006 and last week’s low of 1.0820. The nearest daily time frame support and resistance levels are at 1.0820 and 1.0965. The 50% Fibonacci level and 50 day SMA coincide at the latter level.


2015-06-01_1244.png


Currency Pairs, Grouped Performance (% Change)


Today’s movers in terms of currency pairs are EURUSD, EURJPY, GBPJPY, AUDCHF that have all moved considerably from Friday’s close. EURJPY is correcting lower from a resistance and is at the time of writing trading slightly below Friday’s low. GBPJPY has corrected to a support created by a sideways range from mid-May while AUDCHF is moving higher after the pair closed down over the last four trading days. The main themes today have been weakness in JPY against everything else but the last week’s weakling NZD, EUR weakness across the board while GBP has been weak against everything else but CHF and EUR. USD is currently strong against EUR, GBP and CHF.


Main Macro Events Today


China’s PMI (Q1) figures improved modestly from April, but don’t suggest much pick up. The official manufacturing index edged up to 50.2, from 50.1 in both March and April, after the gauge had dipped below the 50 threshold in January and February. The PBoC has been fairly active in easing policy in recent months to try to help boost growth.


Eurozone May manufacturing PMI wasrevised down to 52.3 from 52.3 reported initially. The country breakdown was mixed, with Italian and Spanish readings coming in much higher than anticipated, and the French reading revised up, although the latter remained in contraction territory. The German PMI was the big disappointment, with a downward revision to 51.1, from 51.4 reported initially, which means the drop from the 52.1 April reading was even more pronounced than expected.


UK Manufacturing PMI came in at 52, slightly under the consensus expectation of 52.5. The PMI report showed that strong domestic demand is being offset by weak export performance, which has largely been a consequence of sterling’s strength against the euro. In April Markit PMI unexpectedly dove to 51.9 from 54.0 in March, itself revised from 54.4. This marked the slowest rate of expansion since November.


US Manufacturing ISM is expected to rise to 52.0 from 51.5 in April and March. Forecast risk: downward, given new order weakness in early month releases. Market risk: downward, as weakening in data could impact rate hike timelines.


2015-06-01_1242.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 2nd June 2015.


CURRENCY MOVERS OF 2nd JUNE 2015.


EUR-D.png


EURUSD, Daily


EURUSD managed to lift back above 1.0900 after skirting to a 1.0891 low on Monday following above-forecast US data. EURJPY is also trading just off three-week highs, and most other euro crosses are holding firm. A step-up in top-level political pressure at key Eurozone leaders to come up with a bailout deal that would be acceptable to the Greek government has given the euro an underpinning. On the dollar side, the rekindled Fed tightening theme got a minor boost yesterday with above-forecast May PMI and construction spending data. The US ISM May rose to 52.8 and lifted the measure above the 51.5 two-year low in April and May, following a slightly higher 52.9 in February and a lofty 57.9 recent-high in October. The ISM rise included component gains in all but shipments, which implies some abatement of headwinds from the oil-price hit to mining and the inventory overhang, the winter port strike and weather factors that have all impacted the various sentiment surveys since November.


EURUSD moved pretty much as expected yesterday. Market rallied higher from an intraday support level but then turned lower from levels fairly close to 4h 1.5 stdv Bollinger Band. The same intraday support in the region of 1.0904 held again yesterday and the pair is at the time of writing reacting lower after challenging a resistance just above yesterday’s high. If EURUSD can’t push above Friday’s high we are likely to see further consolidation and corrections before price is ready to move higher. The nearest daily support levels are at 1.0887 and 1.0820 while resistance levels are at 1.1006 and 1.1062. Should we get corrections closer that low it’d make sense to look for buy signs of stabilization and signals close to yesterday’s low at 1.0887.


2015-06-02_1101.png


Currency Pairs, Grouped Performance (% Change)


While USDJPY moved momentarily above 125 for the first time since 2002 it is the AUD that is roaring ahead strongest at the time of writing. Following the RBA’s decision to hold the rates at 2% AUD has been up strongly against everything else with AUDUSD and GBPAUD leading the pack (AUDUSD up and GBPAUD down). AUDUSD has moved above previous two daily highs and has just hit a resistance at 0.7690, while GBPAUD has rolled over and broken a daily uptrend. EUR has attracted money with the exception of EURAUD that is moving lower from a resistance that caused some weakness in the pair already yesterday. GBP has been weak across the board.


Main Macro Events Today


Reserve Bank of Australia held rates steady at 2.00%, matching widespread expectations. Governor Stevens’ statement says the economy continues to grow, but at a below average rate. Hence, the economy is seen operating with a degree of spare capacity for some time yet, keeping the Bank’s dovish tone intact. The proverbial door remains, not surprisingly, open to further rate cuts following last month’s reduction.


German Unemployment Change in at -6k. Unemployment rate in Germany is already very low. The seasonally adjusted unemployment rate was left unchanged at a very low 6.4% (median same). This is helping to boost domestic demand, but also increases the risk of overshooting inflation going ahead and the ECB may be forced to lift its inflation projections this week.


Eurozone Consumer Price Index (Core) is expected to pick up slightly to 0.7%.In April Eurozone Core inflation remained at 0.6% y/y. Developments confirmed that negative headline inflation rates were mainly due to energy prices and that there always was only ever a very small risk of a deflationary spiral, but the ECB nevertheless credits its QE program with the pick up in inflation expectations.


2015-06-02_1104.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 2nd June 2015. (Second Analysis)


EUROZONE CORE CPI JUMPED TO 0.9%.


EUR-4h.png


Eurozone headline CPI rose to 0.3 % from 0.0% y/y, in line with the median forecast. More interestingly core inflation (excluding food and energy) jumped to 0.9% y/y from 0.6% y/y while analyst consensus expected only a 0.1% rise to 0.7%. This is the first time in six months that the headline rate is in positive territory and the move back above zero should finally silence any deflation concerns. These were exaggerated in the first place, as the decline in headline numbers was mainly due to base effects from lower energy prices. They are now falling out of the equation and together with the weaker EUR are driving up inflation again. The ECB’s very accommodative policy stance is adding to price pressures in countries such as Germany and the quicker than anticipated rebound could see the ECB lifting its inflation projections at this week’s council meeting.


This supported the EURUSD and it moved above the pivotal high from Friday. With today’s high being at 1.1056 EURUSD is now trading close to my target area of 1.1062 to 1.1083. Now that last week’s candle was a reversal candle and price has been makinig higher lows the likelyhood of price collapsing from this resistance is smaller. However, the pair is getting close to overbought levels when measured with 4h Stochastics and together with the resistance levels being near the risk of correction increases. The nearest 4h support level is at 1.0994 while 23.6% Fibonacci level (measured from last week’s low to today’s high) is very close at 1.1000 suggesting the region has some importance. However, the 50% Fibonacci level at 1.0937 is much more interesting in terms of potential entry level for long trades. For more intraday levels see the above 4h chart. The 50 day SMA is at 1.0968 and almost coincides with 50 period SMA in 4h chart and the 38.2% Fibonacci retracement level at 1.0965. If price retraces to these levels, look for price action based confirmation before considering long trades.


Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 3rd June 2015.


CURRENCY MOVERS OF 3rd JUNE 2015.


EUR.png


EURUSD, Daily


The dollar got clobbered in New York session yesterday. The move was led by EURUSD’s fast rise to highs over 1.1190, after opening near 1.1000. Stop loss buying was a key driver of the euro’s rally, with buyers surging in on the break of 1.1010, and again at 1.1100. The move started yesterday as the core CPI figure showed the European inflation jumped to almost 1% and exceeded expectations. I had been looking for EURUSD to turn higher from the support but the strength of the move was surprising. This helped the pair hitting my target level and moving beyond it yesterday.


Yesterday’s US reports revealed a modest underperformance for the factory goods figures for April, but a firm round of vehicle sales figures thus far for May. For the factory report, the equipment and orders data were modestly disappointing. In yesterday’s speech Fed’s Brainard underlined Fed’s approach to be data dependent and was slightly dovish. She said a range of labour market indicators will be watched closely, including wage growth and part-time employment in judging whether the economy is fully healed. This is consistent with her earlier dovish slant and appears to echo the view embraced by Yellen and others that the absolute level of the unemployment rate is not the Fed’s sole consideration in terms of the employment mandate.


Greece will not make IMF repayment if there is no prospect of deal. According to reports on Twitter the parliamentary spokesman of Tsipras’ Syriza coalition said Greece will not make the June IMF payment if there is no prospect of a deal with lenders. Both sides yesterday laid down their own proposals for an agreement, but reports suggest German PM Merkel is not optimistic of a deal before the start of the G7 meeting on Sunday and the first of Greece’s four IMF payments is due on June 5, although the IMF apparently may accept a bundling of repayments and a joint settlement later in the month.


Last Friday (May 29th) I wrote that if there is no strong decline today the weekly candle is will create a bullish pin bar. In this context the 50 day SMA is a minor resistance and we should see price moving higher next week. This move took place after some consolidation and was then powered by stronger than expected inflation numbers from Eurozone. Now EURUSD has moved above the previous week’s high but also to a level that used to act as a support in May. The higher timeframe picture usually dominates the smaller one and with weekly being so bullish I still expect market will work its way higher over the next two weeks and head towards the upper weekly 20 period Bollinger Bands (currently at 1.1440 and 1.1570). On daily and intraday level it is usual that there is some consolidation after such a strong move higher. We’ve seen this since the pair made the high of 1.1194 yesterday evening. If the pair attracts buyers above 1.1120 (trading now at 1.1131) it is likely that the recent highs will be challenged today. The nearest resistance levels are at 1.1208 and 1.1324 while the nearest daily support level is at 1.1006.


2015-06-03_1141.png


Currency Pairs, Grouped Performance (% Change)


AUD has been performing well against all the major currencies after the GDP improved so much from the Q4 2014 and yesterday’s rate decision. AUDUSD has now hit a historical resistance level at 0.7800 which has slowed it down and the pair corrected lower. NZD is still weak across the board while especially AUD has moved over 50 basis points against it. We are seeing some GBP weakness across the board with exception of GBP rising slightly against NZD and EUR strength this morning has turned into a mixed performance. The USD is down and JPY’s performance is mixed. At the time of writing AUDNZD is about to challenge the May 12th high at 1.0895 while AUDJPY is nearing May 14th high at 97.30. GBPUSD closed yesterday above previous day’s high and created therefore a short terms bullish signal while EURCAD closed above 1.3754 resistance level yesterday.


Main Macro Events Today


Australian GDP grew at a 0.9% pace in Q1 (q/q, sa), much better than expected after the 0.5% gain in Q4. GDP slowed slightly to a 2.3% y/y pace in Q1 from a revised 2.4% clip in Q4 (was +2.5%). The near doubling of the quarterly comparable growth rate is encouraging news given the global cross currents (notably the energy price drop) in Q1, consistent with the expected positive lift to the economy from the RBA’s easing efforts this year. The firm Q1 GDP print trims the chances for further easing this year, consistent with our view that the Bank will maintain rates at the current record low 2.0% policy setting well into next year. AUD-USD jumped to 0.7800 in the wake of the data from 0.7700.


ECB Interest Rate Decision and Monetary Policy Statement: The ECB is expected to keep policy unchanged at the June council meeting, with the announcement today, rather than on the usual Thursday slot. The focus in the press conference will be on comments on Greece and whether the ECB is willing to maintain Greek bank’s lifeline in the form of extended ELA assistance. Draghi may also be quizzed again on demands to lift the ceiling for Greek T-bills and on the possibility of raising the haircut on Greece colletaral, as well as the central bank’s stance in the case Greece defaults on one of its IMF repayments. The forecast revisions may contain an upward move to inflation projections amid signs that the combined impact of stabilising oil prices and a weaker EUR is pushing up annual rates quicker than initially thought. At the same time money supply growth has accelerated sharply. This will likely prompt another re-affirmation to markets that the ECB remains fully committed to the implementation of the QE program to prevent market expectations of policy tapering this year.


US ADP Employment Change for May is forecasted to come in at 200 000. This would mean a healthy correction from April’s figure of 169 000.


2015-06-03_1135.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 3rd June 2015. (Second Analysis)


GBPUSD TRADING LOWER AFTER YESTERDAY’S BUY SIGNAL.


EURUSD-W.png


GBPUSD, Weekly


After breaking out of the descending regression channel GBPUSD made a brief move outside the upper Bollinger bands before falling back to current levels. The pair has found some support from the 50% Fibonacci level and has moved sideways since Monday. This is however a mid-range level that could get broken due to the fact that this market is not extended to the downside. Weekly pivot low resistance is at 1.5390 (relatively close to current price). Current levels are therefore more risky and I would be interested in long trades at lower levels, between 1.4962 and 1.5054. With support and resistances so close to each other it’s likely though that this market will be range bound for the rest of the week.


EURUSD-D.png


GBPUSD, Daily


The March 18th high created a support level that was strong enough turn GBPUSD higher in the beginning of May. Now this same pivotal candle support coincides with lower daily Bollinger Bands and the 50 day SMA. At the same time Stochastics oscillator is pointing higher after it was oversold. After last two weeks’ downside movement the pair closed yesterday above previous day’s high. When this takes place at support level it is a Bullish signal and should be taken as an alert to look for smaller time frame charts in order identify right levels for buy signal monitoring. However, this has to be taken as a very short term indication as the resistance level at 1.5447 is not very far. This is likely to test the commitment among the buyers should the short term indications prove to be correct. The 50% Fibonacci level is slightly above the aforementioned resistance at 1.5498 while the nearest daily support levels are at 1.5164 and 1.5089.


EURUSD-240.png


GBPUSD, 240 min


After hitting the upper Bollinger bands and 50 period SMA, price has fallen back to the level it broke out from the 4h descending regression channel. This level is highlighted by the 50% and 61.8% Fibonacci retracements and at the time of writing price is trading just above the 61.8% Fib level. Hourly chart created a pin bar pointing to a potential reversal and there was an attempt to take the market higher. However over the last two hourly bars the upside momentum has been non-existent and price has corrected lower. The resistance level at 1.5326 (coinciding with 23.6% Fib level) is relatively close and could well be the reason for sluggish performance. Apart from Fibonacci levels the nearest support level is at 1.5210 and coincides with 4h lower Bollinger Bands.


GBPUSD, 240 min


Conclusion


In the weekly context GBPUSD is still relatively close to the upper Bollinger Bands. Also, price trading at 50% Fibonacci retracement points to the fact that this level is mid-range and therefore not the ideal area for a weekly turn around to take place. Also the weekly pivot bar low at 1.5394 is relatively close to the current price and suggests further weakness could be ahead over the coming weeks. However, before that is likely to happen we might see a rally to the 1.5447 resistance as daily time frame has some supporting elements for the pair (lower Bollinger bands, 50 day SMA and historical support at 1.5164 ) and there was a daily buy signal yesterday (a close above previous day high). Support and resistance being relatively close to each other could lead to a range bound market. As per usual, look for lower time frame price action to confirm any trading ideas at support and resistance levels.


Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 4th June 2015.


CURRENCY MOVERS OF 4th JUNE 2015.


EURUSD-D1.png


EURUSD, Daily


ADP reported that private payrolls in the US rose 201k in May versus a revised 165k April increase (was 169k). The goods producing sector added 9k, while the service sector jobs rose 192. Construction jobs were up 27k, but manufacturing fell 5k. Financial sector payrolls increased 12k. Professional and business services payrolls were up 28k. Trade and transports added 56k. Headline data are a little better than expected and support forecasts for about a 220k nonfarm payroll gain as our Survey Median projects. Payrolls face upside risk from tight claims and heightened consumer confidence in the face of lower gasoline prices, though downside risk from factory sentiment weakness. U.S. ISM non-manufacturing index fell to 55.7 in May, weaker than expected, from April’s 57.8. And it is the lowest since April 2014. Declines were broad-based, although index levels still remain relatively high. Fed’s Beige Book reiterated the economy continued to expand, with most Districts characterizing the pace as moderate to modest pace. Maybe not surprisingly given its exposure to the energy sector recession, the Dallas Fed reported slightly slower growth. Most Districts also noted an uptick in consumer spending with outlooks on the future rather positive. Manufacturing activity held steady or increased in most districts while oil and gas activity continued to decline in most areas. Employment was up slightly, as were wages. Prices were stable or ticked up, though some manufacturers reported lower input prices. There isn’t robust support in the report for policymakers to be on the verge of hiking rates.


The ECB left interest rates unchanged at and re-affirmed its commitment to the full implementation of QE despite the fact that inflation projections for this year were revised up. Any tapering of the ECB’s bond purchase schedule still is a way off and any help from the ECB for Greece is tied to a deal with its creditors. The ECB president Mario Draghi said that with low levels of interest rates we should get used to periods of higher market volatility. Draghi also agreed that a long period of low interest rates can cause problems, but added that that shouldn’t necessarily prompt the ECB to change policy. He said the central bank is unanimous in its view to see through short term market trends and keep policy steady and added that recovery is on track, but there has been some loss of momentum. According to Draghi the recovery is developing in line with the ECB’s projections, but the slight loss of momentum is mainly due to countries outside of the Eurozone and trade developments.


The Greek PM Tsipras rejected creditor offer after talks with Juncker and Dijsselbloem. He said “the realistic proposals on the table are the proposals of the Greek government”, adding that “ideas like cutting benefits for low-income pensioners, or raising the VAT rate for electricity by 10% points, can’t be a basis for discussion”. At the same time, he suggested the Commission was more favourable to Greece’s proposals than other creditors. The Commission meanwhile said in a statement that “intense work” will continue and that “progress was made in the understanding of each other’s positions on the basis of various proposals”. So we are not really any closer to an agreement, although Tsipras told reporters not to worry when asked about IMF repayment tomorrow.


EURUSD strength continued yesterday after a pullback to 38.2% Fibonacci level. The 1.1120 intraday support was penetrated so momentarily that it held on closing basis even in 15 min chart. The stops below that support were taken out but then price closed above the support before shooting higher. At the time of writing the pair is trading above 1.1238 intraday support but the upside is getting limited and the risk of downside volatility has grown significantly. As the pair is trading close to a major resistance level market participants are likely to take money off the table and decrease the bids. This makes EURUSD vulnerable. Stochastics is signalling the pair is overbought and the nearest significant daily resistance is at 1.1324 while the next important daily support is as far as 1.1006.


2015-06-04_1038.png


Currency Pairs, Grouped Performance (% Change)


What goes up, must come down. This certainly applies to AUDUSD this morning. After surge higher and hitting a resistance yesterday AUDUSD created a shooting star candle and is now moving lower. AUD is weak against all the major currencies with AUDJPY being the weakest. At the same time JPY, following BoJ governor Kuroda’s speech, has seen some strength. USD and GBP show some strength while EUR performance is mixed. GBPAUD created a daily hammer candle yesterday and has moved above the yesterday’s high 1.9765. AUDJPY is bearish after breaking below yesterday’s low at 96.25.


Main Macro Events Today


Bank of Japan Governor’s Speech: GovernorKuroda said in a speech that some emerging economies worry that the Fed’s proposed rate hikes, which are seen kicking off later this year, may complicate the their policy management by triggering a massive outflow of capital from their markets back to the United States. The BOJ expanded its massive stimulus last October to prevent the oil rout, and a subsequent slowdown in inflation, from delaying a sustained halt on deflation. Inflation expectations are “obviously” one of the most important channels in which unconventional monetary policy, such as quantitative easing, reflates growth.


Band of England’s Interest Rate Decision is due to today but analyst consensus expects the rate will stay at 0.5%. According to the BoE minutes to the April MPC meeting showed unanimous votes to maintain the repo rate at 0.5% and the QE total at GBP 375 bln, as expected.


US initial jobless claims are expected to be 285k (median 280k) in the week-ended May 30. Continuing claims are expected to fall to 2,200k for the week-ended May 23. Forecast risk: downward, as there is risk of rebound after recent large declines. Market risk: downward, as weaker than expected data could further delay rate hike expectations.


2015-06-04_1033.png




Janne Muta

Chief Market Analyst

HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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