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Date : 11th August 2015.

 

CURRENCY MOVERS OF 11th August 2015.

 

EUR1.png

 

EURUSD, Daily

 

EURUSD has been rising for the last four trading days after it created a higher low at 1.0848 weekly support. This has brought the pair conclusively out of the bear channel after a breakout at the end of July failed. This first failed attempt but was a hint of things to come and market was able to create a higher low on August 5th. Yesterday was the first time EURUSD stayed outside the channel for a full trading day thus confirming that the downside dynamics that were in place in July are not dictating the market moves any longer. Therefore, I expect that this week’s price action will be bound between major weekly support and resistance levels at 1.0848 and 1.1189. I am seeing a support area in the daily resolution between 1.0848 and 1.0934 while the nearest resistance area is between 1.1114 and 1.1189 and 50% and 61.8% Fibonacci levels coincide with these levels. However, before EURUSD can move up there, it has to deal with a resistance created by upper 2 stdv Bollinger band and 50 day moving average (currently at 1.1090). I expect the area between 1.1061 and 1.1130 to limit today’s trading on the upside and then look for a move to 1.0870.

 

German ZEW unexpectedly dropped in August, with the expectations reading falling to 25.0 from 29.7. The current conditions reading still improved to 65.7 from 63.9 and the expectations number still remains firmly in positive territory, indicating that optimists far outnumber pessimists. Still, the fact that investor confidence dropped again, despite signs that Greece is heading for a third bailout highlights that concerns about the impact of the Fed’s lift off and the outlook for the Chinese economy overshadow a more stable situation in the Eurozone. The strong current conditions reading, which ties in with a marked rise in German orders in Q2, suggest the recovery remains on track in Q3, but concerns about the longer term outlook seem to be on the rise. Bund futures extended gains on the weak number and the September 10-year contract is now up 44 ticks at 154.39.

 

China devalued yuan after July exports we down by 8.3%. Currencies were impacted by the PBoC’s devaluation of the yuan, with the AUD and NZD both losing over 1% to the USD in the wake of the move, while the won and the yen were hit by a lesser extent. An indirect bid for dollars saw EURUSD tumble back to the mid-1.09s after foraying above 1.1000 after the London close yesterday. The PBoC lowered the yuan’s daily fix to the U.S. dollar by 1.9% to 6.228, the largest devaluation since the central bank dropped its peg against the greenback. The move follows dismal trade data out of China over the weekend, and is apparently a one-off initiative intended to converge onshore and offshore pricing as a new pricing regime is put together ahead of the key IMF SDR inclusion vote later this year, according to the FT. AUDUSD dove over a big figure in making a one week low at 0.7305. USDJPY lifted to a two-day peak of 124.89.

 

European stock futures are heading south, in tandem with U.S. stock futures following China’s move to devalue its currency, which will add to concerns about the health of the Chinese economy, while prompting concerns that the devaluation will hamper exporters elsewhere as it will artificially boost the competitiveness of Chinese manufacturers. This could put fresh pressure on other central banks to take their own currencies more into account. The DAX was looking forward to an expected improvement in the ZEW after yesterday’s robust gains.

 

Fed’s Lockhart is still disposed to September lift-off though waiting a month or two won’t be decisive for the economy and a gradual tightening pace means something less frequent than a hike at each meeting. He sees some evidence of inflation heating up, though low global commodity prices could be a concern if they signal weak global demand. Lockhart considers progress on inflation important in setting the pace of rate hikes after lift-off. He views immediate risk of Greek spillover as passed, but any agreement still needs to be implemented. Seems he’s left himself some wiggle room on lift-off on the inflation threshold, despite still favoring a September move.

 

2015-08-11_1222.png

 

Currency Pairs, Grouped Performance (% change)

 

AUD was hit today as China decided devalue its currency. The move was seen as a sign of weakness in Chinese economy and as AUD really trades on Chinese fundamentals it was sold off. After being down most against the safe haven currency CHF AUD is now down most against the EUR. However, there are losses against most of the other major currencies as well. The news brought AUDUSD to lower Bollinger Bands in 4h resolution while EURAUD broke out of a tight range it had been over the last four trading days. GBPAUD reacted by rallying to a resistance at weekly pivotal candle low. AUDCAD dropped significantly from a resistance on the devaluation news as Crude Oil has seen some strength from a major support.

 

Significant daily support and resistance levels for these pairs are:

 

2015-08-11_1234.png

 

Main Macro Events Today

 

• German August ZEW investor sentiment was expected to be rising to 31.0 (median 32.0) from 29.7 in July. However, the figure was down from the previous and came in at 25.

 

• US Wholesale Trade: June wholesale trade data is out today and is expected to show a 0.8% (median 0.5%) increase for June with inventories up 0.7%. Data in line with this forecast would leave the I/S ratio steady at 1.29 from April. The May release had shipments up 0.3% in May and inventories up 0.8%.

 

• US Productivity: The first release on Q2 productivity is due to be released today and should reveal a 2.0% (median 1.5%) headline which follows a -3.1% headline in Q1. Unit labor costs are seen at -0.5% (median 0.3%) after a 6.7% in Q1. Productivity was negative in both Q1 and Q4 of last year but is now poised to post gains.

 

• Canada Housing Starts are expected to improve to a 205.0k unit rate in July from the 203.0k pace in June. Forecast Risk: The economies of Canada’s energy producing regions have taken well publicized hits from the fall in energy prices. We expect slower activity in those markets to continue. However, mortgage rates are lean, which has boosted activity in other regions and helped maintain momentum in construction activity. Market Risk: The Bank decided that the threat from falling oil prices was the challenge facing Canada’s economy, and the downside risks to growth were enough for an insurance ease. Such a move would seem to increase the risk of a housing bubble. Not to worry, as the Bank says that easier policy will help assure incomes do not dive which will in turn allow households to service debt.

 

2015-08-11_1112.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 12th August 2015.

 

CURRENCY MOVERS OF 12th August 2015.

 

EUR2.png

 

EURUSD, Daily

 

EURUSD rallied to the 1.1090 resistance identified in my report yesterday. The pair reacted lower but then attracted buyers at an intraday support at 1.1012. This has led to a fifth consecutive up day with price once again trying to challenge the resistance area above 1.1090. EURUSD is trading inside the upper Bollinger Bands (1.5 and 2 stdv) and the Stochastic is getting overbought. Trend in 4h resolution has been strong and suggest that this will be another day without a significant correction in EURUSD but the upside is indeed getting limited as the resistance area is near. EURUSD is trading near levels that have been able to turn price lower before, therefore I expect that in today’s trading upside will be limited to 1.1090 – 1.1130 range.

 

The PBoC devalued again, shifting the yuan’s reference rate to 6.3306 versus the dollar, which is a 1.6% weakening of the Chinese currency relative to yesterday’s 6.228 (which itself marked a 1.9% depreciation). There seems a degree of acceptance in markets, with Credit Suisse economists, for instance, calculating that the yuan was 5 to 10% overvalued going into the devaluations, adding that anything more than a 10% shift in the currency would spark political backlash. Incoming Chinese data today, including production, retail sales and fixed-asset investment, showed weakness.

 

German lawmakers not ready to wave through Greek bailout. There are reports that German Chancellor Merkel is facing opposition to the plan to let lawmakers vote on the third Greek bailout package early next week. A deputy to Finance Minister Schaeuble told ARD television that “one needs to look closely” and “ask the Bundestag for approval when the common understanding is that this will hold for three years”. If there is a delay it could derail Greece’s close time table and the race to get political approval before Greece faces another big ECB repayment on August 20.

 

German insolvencies are falling sharply, with the overall number down 6.6% y/y in the year to date and down 10.6% y/y in May alone. This is another sign of a relatively robust domestic economy, but also a reflection of the fact that especially small companies in Germany are facing fewer financing constraints than companies elsewhere in the Eurozone. The low interest rate environment and robust domestic demand are also helping t hem to perform.

 

Yesterday US wholesale sales edged up 0.1% in June and inventories rose up 0.9%. The 0.3% May sales gain was nudged down to 0.2%. May’s 0.8% jump in inventories was revised lower to 0.6% (0.4% April). The inventory-sales ratio increased to 1.30 from 1.29 (revised from 1.29). Gains in most of the nondurable sales components slightly offset broad-based declines in the durable goods sales. Inventories were boosted by autos and drugs. The data will help fine tune GDP estimates.

 

2015-08-12_1010.png

 

Currency Pairs, Grouped Performance (% change)

 

This is yet another day that the market participants are selling Australian dollar due to another currency devaluation in China. AUD is down against the competitors across the board while money has been flowing into CHF. This is a sign that markets are concerned about these surprise moves by the PBOC and feel the need of finding a safe haven. AUDUSD tested the 0.7237 support earlier today and has rallied slightly at the time of writing. The nearest resistance is now at 0.7315. EURAUD moved to the 1.5277 resistance and is now near to another resistance at 1.5332. GBPAUD is trading inside the upper daily Bollinger bands and has reacted slightly lower from the resistance.

 

Significant daily support and resistance levels for these pairs are:

 

2015-08-12_1016.png

 

Main Macro Events Today

 

• Main Macro Events Today UK Claimant Account Change for July is expected to come in at 1.5k compared to previous figure of 7.0k.

 

• Eurozone industrial production: there should be a decline in June production numbers of -0.1% m/m (median same0), after the disappointing German number. Data may be too backward looking to be a major market mover or change the overall outlook, but a weak number will add to prevailing risk aversion, especially after the surprise drop in the ZEW yesterday.

 

• US Treasury Budget: July treasury data is out today and is expected to reveal a $149 bln (median -$129.8 bln) deficit for the month. This compares to a $51.8 bln surplus in June and a $94.6 bln deficit in July of last year. Receipts are expected at $224 bln, up 4.6% y/y with outlays at $374 bln, up 20.9% y/y.

 

2015-08-12_1009.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 13th August 2015.

 

CURRENCY MOVERS OF 13th August 2015.

 

EUR3.png

 

EURUSD, Daily

 

Yesterday’s rally exceeded my expectations for the day as EURUSD blasted through the resistance at 1.1130. However, it still is inside the range I said I would expect to contain this week’s price action. I suggested in my report on Tuesday that EURUSD would not trade beyond 1.1189 resistance. There was a quick move some 25 pips higher but it was quickly rejected by the sellers and the pair is currently trading at 1.1119. EURUSD is now moving lower towards an intraday support area between 1.1030 and 1.1070. The next support level after this intraday support is the weekly high at 1.10996. This weekly high is fairly near to the support area above it and therefore adds to its significance. Nearest daily support and resistance levels are at 1.0934 and 1.1214.

 

The PBoC devalued the CNY for a third day, but at a decreasingly aggressive pace of 1.1%, comparing to 1.6% yesterday and the initial 1.9% devaluation of Monday. The central bank held a press conference to explain the devaluation — in contrast to the two previous occasions — arguing that there was no economic basis for the currency to continue depreciating, and that it would keep it stable. The PBoC had also intervened during its overnight session, when it trimmed losses in the CNY of nearly 2% to just 1%.

 

The central bank also said that the way the reference rate for the new session was modified would now incorporate the currency’s close from the previous session, as well as demand and supply conditions. All this mollified broader market concerns. Most other Asian currencies managed to rebound, and stock and commodity markets picked up.

 

Final German HICP inflation was confirmed at 0.1% y/y, CPI at 0.2% y/y, as expected. The breakdown showed seasonal price drops for clothes and shoes over the month, which were compensated by a rise in holiday related prices. The annual rate continues to reflect the impact of lower energy prices, with household energy down 5.7% y/y, a further acceleration in the pace of decline, driven by a 22.4% y/y drop in prices for heating oil. Headline numbers remain very low, not just in Germany, but deflation risks are now longer a major concern for the central bank, as core inflation starts to rise.

 

US Treasury posted a $149.2 bln budget deficit in July, a 57.7% erosion versus the $94.6 bln shortfall a year ago. Spending surged 21.2% y/y, while receipts rose only 5.1% y/y. The fiscal year deficit now stands at $465.5 bln, worsening 1.1% y/y compared to the $460.5 bln red ink for the same 10-month period of fiscal 2014. Also for the fiscal year to date, receipts are up 8.0% y/y, with outlays up 6.9% y/y. We’re still forecasting a $430 bln deficit for the current fiscal year, which compares to the -$483.3 bln for FY2014.

 

September liftoff is far from a done deal thanks to China’s devaluations and the broad impacts and implications rippling around the globe. For the time being we’ll maintain our call for a 25 bp hike in September. But the Fed funds futures market is now showing only about a 40% chance for action. Odds were closer to 70% after the July jobs report. Factors that have the potential to cause the FOMC to delay are the risks of global economic weakness, the renewed threat of disinflation with the plunge in commodities, potential devaluations of other Asian currencies, and the stronger dollar which could be a net headwind to US growth. It’s too soon for Fed officials to start making pronouncements on China, as indicated by Dudley earlier. While data will continue to be the Fed’s guiding light, policymakers have already shown their sensitivities to global dynamics, and overseas events could take precedence in the September rate decision if the markets become unglued.

 

2015-08-13_1223.png

 

Currency Movers Charts

 

In today’s trading we’ve seen EUR correcting lower while USD, CAD and GBP have attracted money and moved higher. NZD is a clear loser today even though there has been no major news on the currency. NZD performance against GBP and USD stand out from the others. GBPNZD is moving higher in an ascending triangle that has been formed below a major historical weekly resistance at 2.4146 while NZDUSD moves sideways at a weekly support at 0.6470. AUDNZD reacted higher from a support yesterday and created a pin bar but there has been much momentum today. This price action is also taking place at a weekly pivotal high at 1.1113.

 

Significant daily support and resistance levels for these pairs are:

 

2015-08-13_1224.png

 

Main Macro Events Today

 

• ECB Monetary Policy Meeting Accounts: The minutes of the July policy meeting, are unlikely to bring any surprises, with comments likely to confirm a cautiously optimistic view on the growth outlook with some reservations due to the impact of the Greek crisis and uncertainty about world growth. Deflation risks are no longer a real issue and some council members will have highlighted risks of asset price bubbles, although the prevailing view at the ECB is that this is not a real concern for now and should be addressed at a national level via macro-prudential policies. The main concern at the ECB is the focus on the full implementation of the QE program and a clear message to markets that the prospect of rising rates in the U.S. doesn’t mean the ECB is in a hurry to follow.

 

• US Retail Sales: July retail sales are out today and should reveal a 0.4% (median 0.6%) headline with a 0.4% (median 0.4%) ex-autos increase. There are balanced risks to the report which we discussed in Monday’s commentary as chain store sales slowed steadily over the course of the month after a strong start but a firm employment report and the 2.1% bounce in auto sales will help lift the report.

 

• US Import and Export Prices: July trade price data is due today and we expect import prices to decline by 1.3% (median -1.0%) with export prices down 0.4% on the month. The import price index managed to increase in May as the winter and spring plunge in oil prices leveled off but further declines in oil prices during July look poised to once again weigh on the release. Our July forecasts compare to June figures of -0.1% for import prices and -0.2% for export prices.

 

2015-08-13_1225.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 14th August 2015.

 

CURRENCY MOVERS OF 14th August 2015.

 

AUG-14-EUR-V3-2015-08-14-141651.png

 

EURUSD, Daily

 

With money continuing to flow into the USD and the GBP, traders continue to bet if the Fed will move to raise rates before the Bank of England. The EURUSD is set to consolidate after a six straight trading day advance from the 1.0850’s with the recent price advance stopping just short of the 1.1220’s resistance levels. Technically, I am expecting the EURUSD to dip towards the 1.1080’s – 1.0980’s as buyers may emerge at those levels before any attempt to test towards the 1.1260’s. The EUR market continues to re-price, at least in the short term, to reflect the diminished GREXIT concerns.

 

German Q2 GDP expanded 0.4% q/q, a slight acceleration from the 0.3% q/q in Q1, which brought the working day adjusted annual rate to 1.6%, up from 1.1% y/y in the previous quarter. French non-farm payrolls raised 0.2% q/q in Q2, while wage growth slowed to 0.3% from 0.5%. Overall, French unemployment remains high, especially among the under 25s, but this is also due to France’s ongoing structural issues and low growth potential. Greek parliament approves 3rd bailout after an all night debate that showed the strains in Tsipras’ coalition. The vote paves the way for an agreement by Eurozone finance ministers at the Eurogroup meeting this afternoon.

 

Markets are trading cautiously after a choppy week in the wake of China’s unexpected devaluation of the yuan, but the move has been generally accepted by the markets. Wall Street also shrugged off the ongoing slide in crude oil below $42 for the time being. Firmer U.S. retail sales data was offset somewhat by negative trade price data and an uptick in jobless claims.

 

Aug-14-CM-2015-08-14-143142.png

 

Currency Pairs, Grouped Performance (% change)

 

The new Currency Movers Charts show the percentage change from previous day’s close to the current moment against the other major currencies.

 

The USD is trading lower in cautious trade following a volatile week. The AUD is higher and commodity prices will continue to dictate the level of the AUD, as demand for Australian commodities seems to be improving.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-14-PM-2015-08-14-144955-300x120.png

 

Main Macro Events Today

 

• EUR Eurozone Jul HICP: inflation confirmed at 0.2% y/y, unchanged from the preliminary reading and the previous month. Prices dropped 0.6% m/m, driven mainly by a renewed decline in energy prices, which were down 0.7% m/m and fell 5.6% y/y. Excluding energy, the annual rate stood at 0.9% y/y in July and core inflation was confirmed at 1.0% y/y, up from 0.8% y/y in June. Even the core rate is considerably below the ECB’s 2% limit for price stability, but the pick up confirms that the risk of a real deflationary spiral is very slim.

 

• CAD Manufacturing Sales: A swing in aerospace production featured in the May move higher, as activity in the sector rose 22.2% following the 18.0% drop in April. The depreciation in the value of the CAD during June should boost the value of sales and inventories held in U.S. dollars.

 

AUG-14-EC-V6-2015-08-14-1428441.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 : 17th August 2015.

 

GOLD RALLY HALTED NEAR RESISTANCE.

 

Gold-w.png

 

Gold, Weekly

 

I pointed out in my previous report that the long term picture stays weak and suggests lower prices for gold. However, I noted that in short term we should see 1080 support holding and market testing the 1130 – 1146 resistance area. If price moves to this resistance area we should monitor price action for potential signs of momentum reversal at levels identified in this report.

 

Market has since moved roughly as expected with the price of gold moving briefly below the 1080 support. This intraday move was quickly rejected and price closed above the support. This was followed by a sideways move and then a rally that almost reached the lower end of my resistance range last week. The long term weekly picture remains bearish with gold trading near previous support areas. The 23.6% Fibonacci level coincides with the 1130.40 low and therefore suggests increased significance of that level. Other resistance levels are approx. at 1142 and 1160.

 

Gold-d.png

 

Gold, Daily

 

Gold extended a move to the downside and moved outside the bearish regression channel. Then it took its time after forming a pin bar at support and moved sideways. Now gold has rallied into the the upper Bollinger bands near the first significant resistance level at 1130.40. This level also coincides with a price projection based on the triangle width created by the sideways consolidation.

 

Stochastics is somewhat overbought and rolling over indicating momentum to the downside should be followed by the recent failure to penetrate the Bollinger Bands. However, the support is fairly close at 1100 to 1103. This support area is roughly the higher end of the sideways move. Therefore the downside move from the current levels might not be that strong or long lived.

 

Gold-1100.png

 

Gold, 240 min

 

Price is moving sideways after breaking below an ascending regression channel. A pivotal high candle low at 1120 limits the upside moves while the nearest 4h support is at 1111.50 coinciding with the lower 4h Bollinger Bands. The upper end of the 1100 to 1103 support area is where 50 period simple moving average is at the time of writing. At the same time Stochastics Oscillator quite correctly suggests that price is trading approx. in the midrange of the recent sideways move. The latest complete 4h bar is a pinbar that indicates lower prices but there has been now follow through.

 

Conclusion

 

Even though gold is near the lower end of the long term downward trend channel the proximity of previous support levels (now resistance) suggests that it is hard for the buyers to create a strong rally from here. Price of gold has been a lacklustre performer in the past when the US Fed has been raising rates. This time should be no different unless some external event turns on a need for safe haven buying. Daily time frame rally from a triangle formation failed at the Bollinger Bands where it also reached a price projection target. This suggests the initial thrust to the upside is over as the target has been reached. If the support at 1111.50 breaks we should see gold correcting slightly lower to 1100 – 1103 support area. All in all, the price of gold is in the short term more likely to correct lower than move beyond the 1120 – 1126.30 resistance. Therefore if price moves into this range of resistance I will be looking for sell signals in the lower time frames. Should this take place my targets for the shorts are at 1110 and 1103.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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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Sterling on the rise?

 

The GBPUSD is generating more interest this week, as the price enters a very narrow band that Chambers speculates could mean an imminent break that could go a long way. The belief is that it will rise, but Chambers recommends erring on the side of caution until a clean break is established.

 

See more at: GBP/USD: Will the Sterling break strong against the Dollar? | TipTV.co.uk

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Date : 18th August 2015.

 

CURRENCY MOVERS OF 18th August 2015.

 

EUR4.png

 

EURUSD, Daily

 

The dollar continued on a steady-to-firm path during pre-European trade session in Asia, despite weakness in US Treasury yields amid growth worries and talk the FOMC will delay lift-off beyond September. EURUSD ebbed to a six-day low of 1.1051, and USDJPY lifted to the 124.50 area, though the pair remained well within its Monday range.

 

For the last three weeks the Stochastics Oscillator has been giving high quality signals at both ends of its range. This happens when market moves sideways in a well-defined range. I said in my Aug 11th report that I expect this week’s price action to be bound between major weekly support and resistance levels at 1.0848 and 1.1189. The upper end of the range was tested over the next three days but price failed to penetrate the level on a closing basis. Since then the pair has been drifting lower. The key word here is drifting. Price move hasn’t been strong and volatile but rather quite gradual. The pair has now reached the support range I mentioned in my Aug 13th report (1.1030 – 1.1070) and trades at 1.1060 at the time of writing. Therefore, I expect price will find support very close to the current price. The proximity of the 38.2% Fibonacci level at 1.1044 supports the idea. Reaction higher however, could be short lived to as there is resistance in 1.1114 – 1.1125 range. If this I’m right and this resistance holds the support area between 1.08048 and 1.0934 becomes a likely target area for shorts.

 

German Financial Minister Schaeuble calls on lawmakers to back Greek aid package. He sends a strong signal off support for Greece’s 3rd bailout package ahead of Wednesday’s vote in Germany’s lower house of parliament, where Schaueble and Merkel are facing growing dissent from their own party. Schaeuble told public broadcaster ZDF that he sees a dramatic change in the government’s readiness to reform and that: “I can argue with full conviction, partly because I haven’t taken this decision lightly myself… that the right thing to do is to vote for this”. Schaeuble, like Merkel before him, seemed to be trying to play down difference with the IMF over Greece’s debt sustainability and stressed that he is sure that the IMF will be involved in the program.

 

US NAHB homebuilder sentiment index rose to 61 in August from 60 in June and is the highest since November 2005. The single family sales index edged up to 66 versus 65 last month (revised from 66). The future sales index was steady at 70 (July revised down from 71). The index of prospective buyer traffic improved 2 points to 45 versus 43 previously, and is the best reading of the year, underpinned by the gains in employment and still low mortgage rates.

 

2015-08-18_1047.png

 

Currency Movers Charts

 

The AUD is down after the RBA meeting minutes indicated that the bank believes the Fed rate hike will cause further depreciation in the AUD against the USD. NZD gained ground earlier today on the back of news on milk prices going up. According to Reuters there is a growing expectation that milk prices will rise in tonight’s auction. This commodity being important for the New Zealand economy potential for higher prices has supported the currency today.

 

EURAUD is trading near the lower end of a daily shooting star candle and looks like it might push into the above resistance. AUDCAD is rolling over from a resistance at 0.9670 towards a support at 0.9431. NZD has risen most against the AUD and the AUDNZD pair has been trending lower for past few hours. This has brought the pair to a 50 day SMA and a daily pin bar. This however is taking place in the middle of the daily chart price range. NZDCAD is trending higher after it was able to hold above the 50 day SMA. However, there is a weekly resistance level at 0.87 area and the pair is approaching the level again.

 

Significant daily support and resistance levels for these pairs are:

 

2015-08-18_1057.png

 

Main Macro Events Today

 

• RBA Policy Meeting’s Minutes: RBA policy makers were less worried about the currency appreciation in the beginning of August and said that weaker currency was helping exports. The bank deemed it likely that when the US Fed raises the rates the Australian dollar will depreciate in value against the US dollar.

 

• UK CPI: The y/y UK Consumer Price Index numbers are released today. The previous figure was 0.0% and with energy prices at multi-year lows there are no expectations that inflation would pickup now. Forecast: 0.0%.

 

• US Housing Starts: July housing starts data should show a 3% decline in the pace of starts to a 1,140k (median 1,180k) pace for the month. Permits are seen at 1,200k from 1,337 in June and completions should be 990k from 972k in June. The NAHB remained firm in July at 60 and today’s release showed a further increase to 61 in August.

 

2015-08-18_0801.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 19h August 2015.

 

CURRENCY MOVERS OF 19th August 2015.

 

EUR5.png

 

EURUSD, Daily

 

EURUSD, Daily Yesterday’s intraday rally was short lived and EURUSD resumed its downward trend. In the Asian session the pair moved higher and attempted to test resistance at 1.1080. Rally moved the EURUSD spot rate outside a descending 4h price channel. However, the aforementioned resistance is a daily low from 13th while 50 day SMA is coinciding with the level. This combination triggered selling and the last complete 4h candle turned into a shooting star. As mentioned in the previous reports, there are no significant daily support levels before the 1.0934. And because the spot is now close to resistance levels, it makes more sense to look for further downside over the coming days. IMF participation in Greek bailout is indispensable for Germany, according to German Finance Minister Schaeuble. He stressed that the IMF agreed in principle to join the Greek bailout and said he is confident about the IMF’s assessment of Greek debt sustainability. Schaeuble, who is trying to sell the package to increasingly reluctant lawmakers from his own party, repeated that a haircut is out of the question and that there is only “limited” room for further Greek debt relief. So it’s hard to share his confidence that the IMF will come on board in October. Eurozone officials have been considering soft debt relief in the form of maturity extensions and extended payment holidays, but the IMF previously argued that this is unlikely to be sufficient to reach debt sustainability. Assuring lawmakers that the IMF will get on board, risks that Schaeuble and Merkel will have to declare defeat if there is no agreement with the fund on Greek debt. China’s economy and a EM debt crisis are now the principal concerns of investors, according to the latest sentiment survey from BoA-Merrill, eclipsing risks of a Eurozone breakdown This comes with emerging market stocks trading at four-year lows and Asian currencies taking a pummeling. Both the Malaysian ringgit and Indonesian rupiah clocked fresh 17-year lows today, since the dark days of the 1998 Asian crisis. China is very much at the center of all this. Stock markets there had another volatile day with the Shanghai Composite showing a 5.1% loss at its intraday low, but managing to close with just a 1.2% decline (it’s not clear whether official support was behind this, but that seems to be the widespread suspicion). This follows the 6.1% dive of yesterday. Atlanta Fed’s GDPNow was boosted to 1.3% for Q3 from the previous 0.7% estimate, as the measure catches up to the internals of Friday’s industrial production report, though still some distance from the Blue Chip median estimate of 2.7%. “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.3 percent on August 18, up from 0.7 percent on August 13. The forecast for real GDP growth increased from 0.7 percent to 1.2 percent after Friday’s industrial production release from the Federal Reserve. Most of this increase was due to a 15.3 percent increase in seasonally adjusted motor vehicle assemblies in July that boosted the forecast of the contribution of real inventory investment to third-quarter GDP growth from -2.2 percentage points to -1.8 percentage points.” US housing starts edged up 0.2% in July to a 1,206k pace, the best since October 2007, after rebounding 12.3% to 1,204k in June (revised from 1,174k). But, building permits fell 16.3% to 1,119k, from a revised 7.0% June gain to 1,337k (revised from 1,343k). Single family starts rose 12.8% on the month, with multifamily down 17.0%. Housing completions increased 2.4% to 987k from the 964k June rate (revised from 972k). Headline starts are better than forecast, but permits disappointed a bit, to leave a mixed view on the report in general, but in a vacuum would keep a September rate hike on the table.

 

2015-08-19_1210.png

 

Currency Movers Charts

 

The moves in the FX markets have been rather subdued ahead of FOMC minutes. EUR has been gaining while the USD has been losing ground. We touched upon NZD and milk prices yesterday as there was an expectation that prices of dairy products would rise. Today however, NZD didn’t move higher even on the back of the news that dairy prices moved higher. According to agrimoney.com prices for milk powder rose 19% from two weeks ago, while prices for the anhydrous milk fat soared 27%. This is the first time prices have risen on the GDT since early March, and mark a recover from the previous auction’s 13-year price low and is likely resulting from a supply squeeze. This suggests that the free falling milk prices might have found a bottom and should support the New Zealand economy. However, the currency markets don’t seem believe this story as NZD is down today. Perhaps, the worries about Chinese economy and the Fed rate hike expectations are behind the lack of buying interest. Just recently there has also been some concerted move into the safe haven currency CHF but the changes are still relatively small.

 

Significant daily support and resistance levels for these pairs are:

 

FX Pair Support Resistance

GBPUSD 1.5563 1.5806

AUDUSD 0.7216 0.7437

USDCAD 1.2950 1.3152

USDJPY 1.2379 1.2528

NZDUSD 0.6470 0.6650

 

Main Macro Events Today

 

• Japan All Industry Activity Index came in at 0.3% disappointing slightly as expectation was 0.4%. However, the improvement from previous figure of -0.5% was welcome.

 

• US CPI: July CPI should reveal a 0.1% (median 0.2%) increase for the headline with the core index up 0.2% (median 0.2%) on the month. After leveling off briefly, oil prices resumed their decline in July which is likely to add downward pressure to the CPI release. This effect showed up in the already released July PPI where we saw a headline increase of 0.2% but which included a 0.6% decline for the energy component in July.

 

• FOMC Minutes: Key domestic data have generally been good enough to support liftoff on September 17. Indeed, GDP growth should hit at least 3.0% in Q2 and Q3. However, the FOMC isn’t operating in a vacuum and ongoing weakness in commodity prices, the dollar’s strength, and remaining uncertainties over the outlook for China could tip the scales in favor of a delay, especially given the generally dovish leanings of the voting members, led by Yellen and Dudley. We’ll look for clues in the FOMC minutes for the degree to which the various parameters might affect the decision. Tomorrow’s data on July CPI will be of some importance too though it have lost some of its potency given the plunge in commodities.

 

2015-08-19_1209.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 August 2015.

 

CURRENCY MOVERS OF 20th August 2015.

 

EUR6.png

 

EURUSD, Daily

 

The FOMC minutes lacked clear signs of September rate hike and triggered a sharp move higher in EURUSD yesterday. The pair moved to upper 1.5 sd Bollinger band and is now trading inside 4h pivotal resistance and relatively close to a weekly resistance level at 1.1189. When price is trading near a higher time frame resistance, such as a weekly level at 1.1189, it is more challenging for the bulls to move prices higher and downward reactions from proximity of the level become more probable. The daily picture is now medium term bullish with the latest low being a (second) higher low and the high before that being a higher high. This suggests that there is now a daily uptrend in place and we should see EURUSD moving higher into the weekly resistance area over the coming weeks but longs should be timed at corrections. In the short term, the nearby resistance area could be a challenge for the bulls and we should keep an eye on how price reacts to the resistance levels. The nearest significant support and resistance levels are at 1.1015 and 1.1189.

 

ESM rubberstamped the Greek bailout late yesterday, following the ratification in national parliaments this week and last Friday’s approval by the Eurogroup. The ESM said EUR 13 bn will be paid out immediately and a EUR 10 bn bank buffer transferred to a segregated account at the ESM. EUR 3 bn are to be disbursed by the end of November, after further prior action from Greece. The ESM said the privatisation fund is to be established this year with a total targeted value of EUR 50 bn of assets to be sold. “Debt relief for Greece in the form of longer grace and payments periods, will be considered after the first review” in October/November and the IMF is expected to contribute “after European creditors adopt debt relief measures”. Whether this form of “soft debt relief” will be sufficient to satisfy the fund remains the key question for IMF participation.

 

German producer prices continue to fall, with annual PPI inflation coming in at -1.3% y/y in July, up from -1.4% y/y in June, but still firmly in negative territory. The renewed decline in energy prices is keeping a lid on import prices and overall PPI, while this year’s drop in the EUR is taking its time to feed through the product chain. Still headline rates are inching up from the lows seen at the start of the year and excluding energy the rate stood at -0.2% y/y in July. There never really was a great risk of a real deflationary spiral in Germany and with a tight labour market adding to wage gains and a rise in unit labour costs, while fueling consumption, inflation is seen trending higher over the next year.

 

FOMC minutes showed a leaning toward a hike, with most officials seeing conditions for liftoff approaching (minutes were leaked early). However, as of July, those conditions still hadn’t been met. And the recent events from China make September a difficult call. While participants cheered the improvement in the economy since the weak Q1, validating their forecasts, a few were disappointed that growth was still lower than had been projected earlier in the year. On inflation, it’s still expected to pick up, although some saw downside risks due to economic and financial developments abroad. The remarks on China were a little more expansive than usual. It said “several participants noted that a material slowdown in Chinese economic activity could pose risks to the U.S. economic outlook. Some participants also discussed the risk that a possible divergence in interest rates in the United States and abroad might lead to further appreciation of the dollar, extending the downward pressure on commodity prices and the weakness in net exports.” Also of note, the Fed staff revised its inflation outlook down and price pressures are expected to remain below the 2% target through 2017.

 

2015-08-20_1444.png

 

Currency Movers Charts

 

EUR has been strong today across the board while AUD has been losing ground especially against EUR. EURAUD has been trending higher over the past few weeks and the latest move EURUSD encouraged buyers in to take EURAUD to the recent highs at 1.53. EURCAD is another strongly trending pair moving towards a resistance at 1.4733. Since March this year, EUR has been moving higher against the CAD on the back of oil prices staying weak.

 

Significant daily support and resistance levels for these pairs are:

 

2015-08-20_1502.png

 

Main Macro Events Today

 

• US Philadelphia Fed Index: The August Philly Fed is out Thursday and is expected to decline to 4.0 (median 6.5) from 5.7 in July. The already released Empire State index plunged in August, dropping to -14.9 from 3.9 in July with the ISM-adjusted measure falling to 44.9 from 50.0. This drop set a low back to 2009 and will be a source of downside risk for the remaining August producer sentiment reports.

 

• US Initial Jobless Claims: Claims data for the week of August 15 is out Thursday and the headline is expected to fall to 266k (median 270k) from 274k last week and 269k in the week prior to that. Claims are poised to average 274k in August after a lean 272k in July.

 

• US Existing Home Sales: July existing home sales data is out Thursday and should show a 1.6% slowdown in the headline pace to 5.400 million (median 5.440 million) from 5.490 million in June. The June headline set a new high back to ’09. Already released measures of housing strength for July have remained firm with the NAHB rising to 60 from 59 and housing starts up to 1.206 million from 1.204 million in June.

 

2015-08-20_1441.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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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ECB receive first payment from Greece, whilst EUR/USD not aiding exports in Europe Gutteridge highlighted the Greek situation, where the ECB have received the first payment today, and now he believes he can focus on other European fundamentals. However, he recognised that Greece isn’t on a path of debt sustainability. He moved on to the EURUSD, which at its current levels isn’t aiding exports, and despite being good for Germany, Gutteridge noted the lower level of competitiveness for peripheral European nations, with also the possibility of the Euro going lower. ECB monetary policy not getting tighter any time soon Gutteridge commented that it will not get tighter quickly, but we are seeing signs of improvement, such as Spain’s retail sales increasing and higher employment across the whole of Europe. Mir questioned this, who expects the ECB to come up with QE mark 2. To finish, he outlined that banks will have to move away from moderate lending to a more aggressive stance. - See more at: Monetary policy not tightening in the near future, QE mark 2 in Europe possible? | TipTV.co.uk

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Date : 21st August 2015.

 

CURRENCY MOVERS OF 21st August 2015.

 

EUR7.png

 

EURUSD, Daily

 

Euro has been a funding currency for carry trades. Market participants have been borrowing in euros at near zero rates and investing in better yielding Asian economies where the rates are higher. Lately however carry traders (in short Euro positions) have been forced to unwind these investments as euro has been trending higher. The latest rally moved EURUSD far outside the upper Bollinger bands. This rally ran into a resistance at 1.1292, a daily low from June 19th. A move outside daily Bollinger bands and close to a resistance is likely to be reversed and price needs to move lower to find support levels from which to attempt to move higher again. The nearest support area is at 1.1189 -1.1216 but this area is rather high up in the range of the recent uptrend. If the recent momentum continues the this area can provide a level for a new reaction low but should that be violated a more reliable support area for EURUSD is closer to a weekly high of 1.0966 at 1.1018 – 1.1094.

 

In terms of weekly picture and sideways movement we’ve seen since May this year the pair is getting a bit pricey. This limits the upside potential and should trigger a more careful approach to trading the long side. On the fundamental side Fed’s lack of commitment to raising rates (evident in the latest FOMC minutes) and Chinese slowdown together with increased volatility in emerging markets raises the possibility that EURUSD will keep on appreciating. The CBOE Emerging Markets ETF Volatility Index has risen from July 17th low of 17.59 to 28.56 at the time of writing, a rise of 62.36%.

 

All this increases the likelihood that the Fed will start paying attention to the risk of adding more instability to these markets by increasing the rates. However, from a technical point of view, a resistance is a resistance until it has been penetrated. Therefore signs of reversal near weekly highs should be taken seriously and traded appropriately. Major weekly support area will be found between 1.0809 and 1.0996.

 

Greek elections to bring stability or more chaos? Tsipras decision to resign to pave the way for snap elections was not a total surprise, given the unraveling of Syriza amid the controversy over Greece’s 3rd bailout. It is not clear yet when elections will be held, but a September 20 date, as an official yesterday suggested, would be ahead of the 1st bailout review and debt relief talks which raise some risks. Tsipras may be hoping that the vote will bolster his eroding power base and Eurogroup head Dijsselbloem said he hoped the elections will bring more stability and will come early. However, the reforms will hardly bring any real improvement in the short term and could still see anti-austerity forces gaining strength, which has the potential to throw Greece back to where it was earlier in the year, if a new left government doesn’t want to see through the agreed reforms.

 

German consumers start to worry about growth outlook. The overall projection for consumer confidence in September came in weaker than expected at 9.9, down from 10.1 in August. The August breakdown showed a fresh drop in the reading for the economic outlook to just 16.6 less than half the 38.3 at the peak back in May. Income expectations are also coming off the boil and the willingness to buy is easing, which suggests the strong boost from consumption that has been helping the German economy to recover this year may taper off. This will add to concerns about the impact of the slowdown in China on the German economy.

 

The July US existing home sales rose 2.0% to a 5.59 mln new cycle-high clip extended the June surge to a 5.48 (was 5.49) mln prior cycle-high to leave an encouraging report overall. We now have cyclical gains of 62% for existing home sales and 44% for pending home sales, versus larger cyclical gains of 79% for new home sales, 152% for housing starts, and 118% for permits. More generally, the housing recovery lost steam after the Fed’s taper talk and mortgage rate gains of mid-2013, and sales are just 5.3% above the 5.31 mln prior recent-peak in July of 2013 as we approach the presumed start of Fed tightening. Existing home sales fell 3.0% for 2014 overall to a 4.92 mln rate despite the underlying recovery, and we expect an 8% 2015 climb that brings us back to the mid-2013 sales pace. The percentage of all-cash transactions rose to 23% from 22% in June but a higher 24% over the prior three months, versus a much higher 29% last July. The downtrend is a good sign for ongoing repair in the mortgage market.

 

2015-08-21_1217.png

 

Currency Movers Charts

 

AUD is down again against all the major competitors while a safe haven currency JPY is benefiting from uncertainty that is clearly visible in the global stock markets. S&P 500 ended down over 2% yesterday while German DAX hadn’t a single issue that rose yesterday. Today Shanghai Composite closed down by 4.7% while euro has been benefiting from carry trade unwinds. All this points to more unstable times ahead and is in line with my predictions on global stock markets May this year (tweet: Bull market for stocks is over). This should also translate into added volatility in the currency markets and provide traders with new opportunities.

 

Today’s moves have driven AUDCHF and AUDJPY at support areas created by the lower daily Bollinger bands while EURAUD is trading near a pivotal weekly high from October last year.

 

Significant daily support and resistance levels for these pairs are:

 

2015-08-21_1237.png

 

Main Macro Events Today

 

• China’s manufacturing PMI fell to a preliminary 47.1 in August from a final 47.8 in July. The decline was contrary to expectations for some modest improvement and left the lowest reading since March of 2009. The report suggests the weakness evident in China’s economy during July continued in August, ultimately exacerbating the China slowdown fears the have roiled global markets last week and this week.

 

• Eurozone PMIs stabilise in August, with the manufacturing reading holding steady at 52.4 and the services number rising to 54.3. Better than Bloomberg consensus, with strong German orders data helping to boost the German manufacturing PMI, which compensated for another drop in the French reading.

 

• Canada Retail Sales: We expect retail sales to rise 0.1% in June (median +0.3%) after the 1.0% bounce in May. The ex-autos sales aggregate is expected to rise 0.5% in June (median +0.5%) following the 0.9% gain in May. Gasoline prices rose 6.0% in June according to the CPI, which should boost total and ex-auto sales. We could see a sizable boost, suggesting upside risk to the total and ex-autos sales estimates.

 

• Canada CPI should expand at a 1.4% y/y pace in July (median same at +1.4%) following the 1.0% y/y rate in June. CPI is seen rising 0.1% on a month comparable basis in June (median +0.2%) after the 0.2% gain in June. Gas prices were essentially flat in July compared to June.

 

2015-08-21_1239.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 24th August 2015.

 

CURRENCY MOVERS OF 21th August 2015.

 

24-AUG-EUR-V3-2015-08-24-131543.png

 

EURUSD, Daily

 

The risk-off theme continues in global financial markets as traders re-price the USD in view of the reduced chance that the Fed will begin tightening rates in September. The EURUSD is now trading near multi month highs around 1.15 after accelerating through my 1.1260’s target area; see my August 14 report, current price is starting to look overbought ahead of the 1.1530 resistance level. EURUSD traders should watch if price can hold above the 1.1436 support level before initiating new longs, otherwise a break below the 1.1430’s could open up the possibility for a set-back towards the 1.1216 – 1.1189 levels ahead of an advance on the 1.16’s.

 

German property prices continue to rise, with prices for apartments rising by around 1.4% m/m. The overall index rose 0.73% m/m and up 5.3% y/y. Low interest rates and a robust labour market are driving up property prices, but while the Bundesbank is keeping a close eye on developments it is not seeing signs of a serious property bubble at the moment, even if prices in key cities are already overvalued.

 

Asian and emerging market currencies are under pressure, along with commodity related currencies such as the AUD and the CAD as the FOMC minutes showed a Committee divided, the minutes gave no clear signals on the timing of a rate liftoff, however the mention of risks from China, the growth/inflation impacts of a stronger dollar, and a downgraded inflation outlook from the Fed Staff resulted in a downbeat market interpretation. China will remain a focal point as Chinese officials struggle with a slowing economy and falling equity market.

 

AUG-24-TB-2015-08-24-125651.png

 

Currency Pairs, Grouped Performance (% change)

 

Current 5 day percentage change of currencies against other major currencies since the daily close 23:59:59 server time, 5 days ago.

 

The AUD is trading lower as the spill-over from the turmoil in China’s stock markets remain a risk factor for the AUD. The JPY is trading higher as talk of further easing to stimulate growth continues to gain momentum.

 

The EUR over the last five trading days is stronger as the current sell off in the Chinese stock markets and weak commodity prices may have the market rethinking a US rate move in September.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-24-CP-2015-08-24-132342.png

 

Main Macro Events Today

 

• USD FOMC Member Lockhart Speaks: Federal Reserve Bank of Atlanta President Dennis Lockhart is due to speak today.

 

AUG-24-EC-2015-08-24-124315.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 August 2015.

 

CURRENCY MOVERS OF 25th August 2015.

 

AUG-25-EUR-V3-2015-08-25-121419.png

 

EURUSD, Daily

 

The EUR is trading lower this Tuesday after a nearly +340 pip move with the main cause pointing to Chinese retail investors’ realization that their government is no longer willing to support the Chinese stock markets. Monday’s aggressive global stock market sell-off was amplified by a number of brewing factors, the devaluation of the Yuan, the collapse of commodity prices, and the uncertainty of when Central banks will start to tighten rates.

 

At the moment, the EURUSD is at risk of a retracement of the 1.1020-1.17 sharp multi up-day move. However, the EURUSD saw serval breaks of resistance that could lead to further positive upward momentum on price. Traders should now be on alert if the former 1.1530 resistance now turned support can hold before initiating new longs, otherwise a possibility dip towards the mid 1.13’s could see buyers remerge to support price for a potential next leg higher move above the 1.1750’s.

 

The German DAX remains clearly below the 10000 mark and Asian markets were volatile in overnight trade, with the ASX closing higher, but the Nikkei losing nearly 4% again.

 

Crude Oil touched $37.70 after making it to $39’s following its entry into to the $37‘s. The slide lower comes as traders fear that global stock markets may pick up downward momentum again; the price fall indicates that traders view that global demand for the commodity will weaken as the Chinese economic slowdown takes hold.

 

The White House said the Treasury is “closely monitoring” global markets and China should continue to pursue reforms, while touting the strength of the U.S. economy. However, it did warn that Congress needs to pass the budget and avoid shutdowns to avoid “self-inflicted wounds”. Merkel of Germany said that a crisis in China won’t last and it will do everything it can to stabilize the situation, while Hollande of France said China will find the right answers to secure its economy.

 

25-AUG-TB-V1-2015-08-25-114056.png

 

Currency Pairs, Grouped Performance (% change)

 

Current intraday percentage change of currencies against other major currencies since the daily close 23:59:59 server time.

 

The JPY is lower against the majors after the JPY showed strong gains as a safe haven currency during yesterday’s volatile trading session. The USDJPY bounced nearly 300 points from the lows, as Wall Street pares its losses; USDJPY touched 119.02 highs after collapsing from over 120.00 to nearly 2015 lows of 116.15. The AUD is trading higher as commodity prices will continue to dictate the level of the AUD. The EUR is trading mixed after the German Ifo index rose to 108.3 in August from 108.0 in July.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-25-MC-V1-2015-08-25-120725.png

 

Main Macro Events Today

 

• EUR German IFO Index: Rose to 108.3 in August from 108.0 in July. This was even stronger than consensus forecast, with markets looking for a correction, although the rebound in German PMIs and strong orders already suggested that the Ifo would hold up. The breakdown confirmed that the improvement was entirely due to a jump in the current conditions indicator, while the more forward looking expectations index fell back slightly to 102.2 from 102.3 in July. The deteriorating growth outlook in China and other emerging markets may not have had an immediate impact on this month’s reading, but will be felt in coming month. Bund futures extended losses on the stronger than expected number, with the September contract now down 90 ticks on the day.

 

• USD Consumer Confidence: August Consumer Confidence is expected to increase to 92.0 from 90.9. This compares to a recent low of 25.3 in February of 2009. Forecast risk: downward, given the decline in the first Michigan release. Market risk: downward, as weaker data could impact rate hike timelines.

 

AUG-25-EC-V2-2015-08-25-112717.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 August 2015.

 

CURRENCY MOVERS OF 26th August 2015.

 

AUG-26-EUR-V2-2015-08-26-122331.png

 

EURUSD, Daily

 

The hope for a rebound in European stock markets didn’t last long, and equities are selling off again, with the DAX down at the market opening and below the 10000 mark. China’s rate cut yesterday by the People’s Bank of China initiated a rebound in Asian equity markets. It seems the realization in Europe is that the underlying problem is due to the fact that emerging markets are slowing down. The Euro Stoxx 600 has dropped 12% in August so far, and is heading for the worst monthly drop since 2008.

 

The medium term view on the EURUSD, since price has traded through the May tops at the 1.1430’s and then back under to touch below the 1.14 support on Tuesday, indicates that price still remains at risk of a continued retracement. The risk for longs is a re-visit towards the former major resistance 1.12 area where traders should watch for a potential higher low to develop before any attempt to retest the 1.17 recent high.

 

The USD gets some support as the U.S. consumer confidence rose sharply to 101.5 in August after climbing to 91.0 in June (revised from 90.9). It was 90.3 a year ago. This is the best level since March. The USD is trading mostly higher against the JPY, GBP, AUD and CHF, ahead of today’s Core Durable Goods Orders data.

 

AUG-26-TB-2015-08-26-121307.png

 

Currency Pairs, Grouped Performance (% change)

 

Current intraday percentage change of currencies against other major currencies since the daily close 23:59:59 server time.

 

The JPY is weakening across the board as regional stocks rose. The CAD is stronger against all majors as Crude prices firm up.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-26-CM-2015-08-26-122801.png

 

Main Macro Events Today

 

• USD Durable Goods Orders: July durable goods data is out today and should show orders up 1.0% (median -0.5%) following a 3.4% bounce in June. Markets expect shipments to be up 1.5% from 0.5% in June and inventories to be up 0.6%, the same pace as June. Data in line with this forecast would leave the I/S ratio down to 1.66 after two months at 1.68. There is some downside risk as Boeing orders fell to 101 in July from 181 in June.

 

• USD FOMC Member Dudley Speaks: Dudley is the President of the Federal Reserve Bank of New York.

 

AUG-26-EC-2015-08-26-110322.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 August 2015.

 

CURRENCY MOVERS OF 27th August 2015.

 

AUG-27-EUR-V2-2015-08-27-111727.png

 

EURUSD, Daily

 

The EUR is trading generally weaker after posting broad based declines yesterday, as lower energy prices has led to a 1.7% decline in German import price inflation. The current lower inflation trajectory will give the ECB an excuse to talk down the euro; speculators should not rule out any further ECB QE expansion in the wake of the recent global market turmoil. I continue to see EURUSD risk to the downside in the immediate short term as price may attempt to re-test the mid to low 1.12’s where buyers could potentially emerge to support the pair.

 

European stock markets are broadly higher, following gains on Wall Street and in Asia, with the Shanghai Comp managing to extend gains in late trade closing with a 5.34% gain. The Nikkei closed 1.08% higher and the Hang Seng is up nearly 3%. In Europe, most markets are up around 2%, with the DAX leading the way with a 2.34% gain – the FTSE 100 is up 2.07% and the Euro Stoxx 2.20%.

 

Downbeat central bank comments are adding to market support with rate hike expectations in the U.S. and the U.K. being pushed back and the increased possibility that the ECB will move further into QE. Volatility is likely to remain high in this climate of uncertainty about the world growth outlook.

 

Dovish Fed speaking from Dudley, who said a September rate hike “seems less compelling to me” than a few weeks ago, had an impact on the markets with the Dow Jones closing up nearly +3.95% in Wednesday trade.

 

AUG-27-CMB-2015-08-27-105903.png

 

Currency Pairs, Grouped Performance (% change)

 

Current intraday percentage change of currencies against other major currencies since the daily close 23:59:59 server time.

 

The JPY continues to trade weaker across the board as the USDJPY bounces off the recent 1.1616 monthly low to break through to the upside of the 120’s.

 

The commodity driven currencies; AUD, CAD and NZD, are all trading stronger as Copper, Gold and Crude Oil firm up. The GBP remains mixed as cable traders digest the previous session’s sharp sell off of the GBPUSD.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-27-TBCM-2015-08-27-112304.png

 

Main Macro Events Today

 

• USD Gross Domestic Price Index (Q2): The second release on Q2 GDP is out today and we expect the headline to be revised up to 3.5% (median 3.3%) from 2.3% in the first release. Construction spending and inventories are expected to lead the revisions. We expect construction spending to be revised up by $17 bln, inventories by $16 bln, consumption by $11 bln and net exports and equipment spending should both be revised up by $2 bln.

 

• USD Initial Jobless Claims: Claims data for the week of August 22nd are out later today and should reveal a decline in the headline to 274k (median 275k) after an increase to 277k in the August 15th week. Claims are continuing at restrained levels in August and we expect the average for the month to be 274k which compares to 272k in July and 277k in June.

 

AUG-27-EC-2015-08-27-095401.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 August 2015.

 

CURRENCY MOVERS OF 28th August 2015.

 

AUG-28-EUR-V3-2015-08-28-143552.png

 

EURUSD, Daily

 

The EURUSD hit a low near the key 1.12 support level on Thursday , I previously posted “I continue to see EURUSD risk to the downside in the immediate short term as price may attempt to re-test the mid to low 1.12’s where buyers could potentially emerge to support the pair.” This I posted when the EURUSD was trading around 1.1311. At the moment, the euro is likely to continue its bounce off the key support as buyers emerged to support price. The risk for short sellers is that the latest bounce could extend out towards the 1.14’s – 15’s. However, traders should be on alert for any price drop below the 1.12’s as this move may raise fears for a return towards the low 1.11’s to mid 1.1150’s.

 

The rebound on stock markets continued in Asia, with the Shanghai Comp up 1.77% and Japanese markets outperforming. The USD managed to firm up in the wake of renewed optimism about the U.S. economy following yesterday’s revised Q2 GDP, which also helped the U.S. Dow Jones to close up 2.30% on Thursday. Today, the Eurozone stock markets are broadly lower, with Eurozone markets underperforming and the DAX down around 8% for the month. The markets are now hoping that stimulus from central banks may have helped to limit the sell off. Uncertainty about growth and central bank outlooks is adding to market volatility and means the impact of stronger than expected data is unclear.

 

AUG-28-TB-V1-2015-08-28-141736.png

 

Currency Pairs, Grouped Performance (% change)

 

Current intraday percentage change of currencies against other major currencies since the daily close 23:59:59 server time.

 

The AUD is weaker across the board as commodity prices will continue to dictate the level of the AUD. Also, the unrest in China’s stock markets remains the major risk factor for the AUD. The GBP trades lower after a bout of sterling buying in the wake of UK Q2 GDP data, which was unrevised at +0.7% q/q.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-28-CMP-2015-08-28-144623.png

 

Main Macro Events Today

 

• GBP UK Q2 GDP:: UK GDP was left unrevised at +0.7% q/q and +2.6% y/y in second-estimate data, matching expectations. Growth in 2014 was also left unrevised, at 3.0%. The breakdown showed a 3.7% q/q rise in exports versus just a 0.6% q/q increase in imports, while consumer spending eased to +0.7% q/q. Encouragingly, business expenditure rose 2.9% q/q, the biggest rise in 12 months, and by 5.0% y/y.

 

• USD Michigan Consumer Sentiment Index (Aug): The second release on Michigan Sentiment is out Today and we expect the headline to be revised up to 93.5 (median 94.0) after a 92.9 headline in the first release that marked a decline from 93.1 in July. The tendency over the past year has been for upward revisions and consumer confidence for the month spiked higher, rising to 101.5 from 91.0 in July. These two factors should lend upside risk to the release.

 

AUG-28-EC-V2-2015-08-28-133358.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 : 31st August 2015.

 

CURRENCY MOVERS OF 31st August 2015.

 

AUG-31-EUR-V2-2015-08-31-095933.png

 

EURUSD, Daily

 

Asian stock markets closed lower again in overnight trade, led by a 1.28% decline in the Nikkei 225, as the Chinese stock markets backed off following a Beijing announcement that large-scale purchases to support the market are not to be expected in the future. This weighed on regional equities, Asian and commodity currencies. At the time of writing, U.S. stock futures are down -125 points, setting the stage for a renewed decline in European stock markets.

 

Eurozone August inflation data is out later today and it should show a renewed drop in the headline rate closer towards zero in the wake of lower commodity prices, EUR traders will look for further ECB rate clues in language during the press conference on Thursday after the Minimum Bid Rate decision. Traders should also take note that ECB Vice President Constancio said at the Jackson Hole symposium that current inflation forecasts don’t price in recent declines in oil prices. This backs expectations for a downward revision to the central bank’s inflation forecasts at Thursday’s council meeting.

 

The technical outlook for the EURUSD over the short term is that price is bouncing off the 1.12’s key support level with price potential limited to the upside between the 1.1460 – 1.1530’s. Price looks to be trading at the lower end of the short term upward price channel, and as long as the key 1.12’s hold firm the longs should maintain control over the immediate short term. Short sellers may present themselves on a break below the 1.12’s with support levels seen near the low 1.11’s – 1.1150’s.

 

Traders should pay some attention to the recent statements by Central Bank “centers of influence members” since a large part of the recent market volatility revolves around the uncertainty of the timing of rate adjustments. The U.S. Fed vice chairman Fischer saying over the weekend that “there is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further,” while BoE Governor Carney said that China uncertainty was unlikely to change UK monetary policy. On Friday, Atlanta Fed moderate Lockhart said he’s less resolute on a September hike in wake of market volatility, according to a Market News report. Market turmoil may change the thinking on policy, he said, though the economy is in “quite solid mode of expansion.”

 

AUG-28-TB-V1-2015-08-31-110705.png

 

Currency Pairs, Grouped Performance (% change)

 

Current 5-day percentage change of currencies against other major currencies since the daily close 23:59:59 server time, 5 days ago.

 

The JPY is weaker across the board as the Japan CPI rose 0.2% y/y in July slowing from 0.4% in June. The AUD traded generally stronger as construction work done in Australia climbed 1.6% q/q for Q2 2015. The CAD is firmer after the CAD PPI in July inched up 0.1% y/y, after it had fallen 0.9% in June.

 

Significant daily support and resistance levels for these pairs are:

 

AUG-31-CMB-2015-08-31-112833.png

 

Main Macro Events Today

 

• EUR Consumer Price Index: EMU August CPI is expected to fall to 0.1% (median same) from 0.2%, this is mainly the result of lower oil prices. Sharply lower oil prices mean the inflation trajectory will likely look flatter than previously and at the same time the risks to growth have increased. Still, core inflation is actually trending higher, money supply growth is accelerating and loan growth stabilising. In this situation, the ECB will use low inflation to give markets some dovish sound-bites at Thursday’s central bank meeting and stress that the door to further measures remains open, without committing to further easing.

 

• USD Chicago Purchasing Manager’s Index: The Chicago PMI continues the August producer sentiment releases later today and should reveal a headline improvement to 55.0 (median 54.9) from 54.7. Producer sentiment measures have been mixed so far in August and we expect the month’s ISM-adjusted average to decline to 52 after holding at 53 in both June and July.

 

AUG-31-EC-V1-2015-08-31-105829.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 September 2015.

 

CURRENCY MOVERS OF 1st September 2015.

 

AUG-31-EUR-V2-2015-08-31-095933.png

 

EURUSD, Daily

 

The global stock market selloff continued in overnight trade in Asia, with the Nikkei dropping off another 3.84%. The USD traded mostly weaker; oil prices have fallen back off the recent high price near $54.3, and now trades just below $53 after rallying strongly over the three previous sessions. The USD weakness may be linked to the new declines in Chinese and global stock markets, this global selloff have investors and traders rethinking the timing of when the U.S. Fed will tighten rates. This uncertainty regarding the timing of a U.S. rate hike is fueling the current downward pressure on the USD. The markets will remain volatile until we see clearer signs from the U.S. Fed.

 

The technical outlook for the EURUSD over the immediate short term remains to be contained within the Aug 7th – Aug 12th upward slopping price channel. Now that the price has clearly bounced off the 1.12’s key, support current price potential is set to test the upside between the 1.1460 – 1.1530’s. However, any break below 1.12 could open up a 1.11 target. A hypothetical trade set up could be to resell near the 1.1460’s – 1.1530’s for a 1.11 target.

 

German jobless numbers fell 7K in August, slightly more than expected and leaving the seasonally adjusted jobless rate steady at a low 6.4%. Official numbers still look good, but the improvement on the labour market is leveling off as the market is increasingly tight.

 

The Reserve Bank of Australia left its cash rate at 2.0%, as widely expected and ignoring recent market turmoil in Chinese stock markets. The AUD is seen as adjusting to the significant declines in key commodity prices and further depreciation seems likely; however, the RBA is now cautious about adjusting rates lower because of the strong Australian property market.

 

SEP-1-TB-V1-2015-09-01-122812.png

 

Currency Pairs, Grouped Performance (% change)

 

Current intraday percentage change of currencies against other major currencies since the daily close 23:59:59 server time.

 

The USD is softer across the board as declines in Chinese and global stock markets and the associated risk-off sentiment have served to erode Fed tightening expectations, which weighed on the USD.

 

The AUD is weaker post-RBA statement gains amid a backdrop of declining Asian and global stock markets.

 

The EUR and the GBP are mostly trading mixed as the EU commission maintains a 1.5% growth forecast, and UK manufacturing PMI survey disappointed.

 

Significant daily support and resistance levels for these pairs are:

 

SEP-1-CBM-2015-09-01-124933.png

 

Main Macro Events Today

 

• EUR Manufacturing PMI: August manufacturing PMI revised down to 52.3 from 52.4 reported initially, which means the overall reading fell slightly from the 52.4 reported for July, despite the sharp jump in the German reading. Confidence indicators overall still held up in August, but the downward revision ties in with contraction in China and is likely to herald further weakness in coming months as demand falls off with slowing growth in emerging markets and uncertainty about the outlook for the global economy.

 

• GBP Manufacturing PMI: The UK manufacturing PMI survey disappointed at 51.5 in August, down from July’s 51.9 reading and below the median forecast for 52.0. The August dip brings the PMI indicator to within a whisker of June’s two-year low of 51.4. The strong trade-weighted value of sterling has been curtailing the export-sensitive sector.

 

• CAD Gross Domestic Product: GDP is seen falling 1.0% in Q2 (q/q,) after the 0.6% drop in Q1. But the expected 0.2% gain in June GDP would end a five month run of monthly GDP declines and support Bank expectations that the economy will recover in 2H.

 

• USD ISM Manufacturing PMI: August ISM will be released later today and should reveal a headline decline to 52.5 (median 52.7) from 52.7 in July. Other measures of producer sentiment have been volatile for the month with big drops in the Empire State, and Richmond and Dallas Fed’s. The Philly Fed did manage to climb higher to 8.3 from 5.7 last month. Despite this the balance of risk for tomorrow’s release is to the downside and we expect the broader ISM-adjusted average for the month to fall to 52 after holding at 53 in both July and June.

 

SEP-1-EC-V3-2015-09-01-122356.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 September 2015.

 

CURRENCY MOVERS OF 2nd September 2015.

 

SEP-2-EUR-V3-2015-09-02-140115.png

 

EURUSD, Daily

 

Now that concerns about China and forecasted inflation numbers are being lowered, the ECB will now have renewed pressure to expand its QE, traders will be on alert for further ECB clues during tomorrow’s ECB press conference. If the ECB hints at further EU growth concerns, the odds will increase for additional QE which may provide enough of a catalyst to support EUR bear positions over the medium term.

 

The short term technical outlook for the EURUSD pair remains in an uptrend, however, momentum analysis looks to be weakening , if we can spot a Stochastic bull cross take shape below the 20 line hopes for continued upward price, momentum should remain intact. For the moment we cannot rule out a price move to retest the 1.1460’s – 1.1530’s before the bears emerge once again to potentially carry the pair back towards the 1.11 support area. Traders should also remain alert for price moves out-side of the most recent upward channel line for breakout trade set-ups. I remain committed to selling into EURUSD strength over the coming days.

 

Chinese markets will be closed both tomorrow and on Friday, which may be good for global markets as it means that the risk of bearish stock market contagion from this source will be set aside until at least Monday.

 

Market concerns over how central banks will respond to new adjustments in global growth forecast have been a driving force behind the recent financial market volatility. Crude oil prices have been reflecting growth projections with prices now trading lower, around the $43 level. Oil prices today are shapely lower today after a short lived price rebound attempt which posted a largest multi day rally in a quarter of a century. The AUD and CAD have been trading towards the downside within daily chart analysis as money flows into the JPY over the last 5 trading days, as an alternative to the USD, EUR and GBP, this trend should continue until at least we see clearer signals from the U.S. Fed regarding when and if we will see a pending rate hike. This Friday’s release of the U.S. Non-farm Employment Change should provide a clue about the Fed’s next move.

 

Sep-2-TBM-V2-2015-09-02-134005.png

 

Currency Pairs, Grouped Performance (% change)

 

The EUR is mostly weaker against the majors ahead of tomorrows ECB press conference and USD buying is expected to pick up again.

 

The AUD is starting to firm up after the manufacturing sector in Australia expanded in August at an accelerated pace, the latest survey from the Australian Industry Group showed, with a PMI score of 51.7.

 

The CAD is mixed as the current account deficit narrowed by $0.7 billion in Q2 to $17.4 billion. The reduction in the deficit was mainly reflected in the trade in goods and services balance.

 

The JPY is also trading mixed as traders may be unwinding safe haven trades.

 

Significant daily support and resistance levels for these pairs are:

 

SEP-1-CBM-2015-09-01-124933.png

 

Main Macro Events Today

 

• GBP PMI Construction (Aug): The UK August construction PMI rose to 57.3 from July’s 57.1, below the Reuters median forecast for 57.5 but marking what is now the longest period of growth for seven and a half years. Today’s report follows yesterday’s disappointing manufacturing PMI, and investors will now be looking to tomorrow’s release of the service sector survey to complete the August PMI picture.

 

• EUR Producer Price Index: Eurozone PPI inflation held steady at -2.1% y/y in July, with prices down 0.1% m/m. The headline rate remains under pressure from lower energy prices, which dropped 0.5% m/m and were down 6.5% y/y. Excluding energy the annual rate in the Eurozone would have been -0.4% y/y, still in negative territory, but unchanged from July and up from levels seen earlier in the year. This ties in with the rise in core inflation reflection in HICP numbers. Inflation may still be negative but the risk of real deflation is lower than it was last year and this should keep the ECB on hold even if Draghi will likely affirm a clear easing bias at tomorrow’s meeting.

 

• USD Factory Orders: July factory goods data is out on today and its expected for orders to be up 0.7% (median 0.7%) on the month with shipments up 1.2% and inventories up 0.1%. This compares to the already released durable goods data for the month which had orders up 2.0% with shipments up 1.0% and inventories unchanged. Data in line with this forecast would leave the I/S ratio down to 1.34 in July from 1.35 since April.

 

SEP-2-EC-V1-2015-09-02-124016.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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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Fed rates: 2015 still a reasonable call; Markets calling for further Yuan devaluation?

 

With the Chinese officials resorting to selling Treasury bonds in a bid to continue supporting their crumbling market, Marcus Ashworth believes this is taking a toll on their currency. Remaining pegged to the dollar is proving to be costly, so cutting rates and devaluing the Yuan is almost certainly the right move for China to make, but it may also be that the market has already accounted for a future move.

 

September unlikely, but 2015 still a reasonable call in interest rates

 

Moving away from the overuse of emerging monetary policies of recent years, the Federal Reserve are set on raising the US interest rate in the near future. Speculation still persists as, even though a September hike was the original call, it’s seemingly becoming less and less likely. Zak Mir believes that the Fed should make their move and get it over and done with, but Ashworth feels that the concern over the markets (particularly emerging economies) should not be a factor in the Fed’s decision.

 

See more at: Fed rates: 2015 still a reasonable call; Markets calling for further Yuan devaluation? | TipTV.co.uk

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Date : 3rd September 2015.

 

CURRENCY MOVERS OF 3rd September 2015.

 

2015-09-03_1341.png

 

EURUSD, Daily

 

EURUSD is trading near the upper weekly Bollinger Bands (20) after peaking higher last week. The move reached a high of 1.1714 and was reversed at a pivotal low from November 2005. This rejection brought the pair down to a level that resisted price moved higher in the beginning of August. This level also coincides with a rising trendline suggesting there is currently more potential in the upside while the immediate downside potential is limited. This view is supported by the Stochastics Oscillator (7,3,3) being oversold and starting to creep higher. The nearest support and resistance levels are at 1.1156 and 1.1369. The 1369 resistance is a daily high from Aug 27th and a pivotal candle low.

 

The ECB is widely expected to keep policy unchanged, leaving the focus on the updated set of staff projections and the press conference. With growth forecasts overshadowed by concerns about China and lower than expected oil prices keeping headline inflation down, both growth and CPI forecasts are likely to be scaled back. In the base scenario the central bank is pretty much expected to remain on hold into next year, and Draghi will highlight the heightened risks to growth and highlight that the ECB stands ready to act should these risks materialise. Lower than expected inflation meanwhile is almost entirely due to lower oil prices and core inflation is rising, in tandem with money supply growth and a stabilisation in loan growth. If Draghi follows Constancio’s argument that the central bank needs to see through short term volatility caused by energy prices markets are likely to register disappointment, especially as some will be betting on a surprise move already today. So the EUR may rise again.

 

The IMF is warning the Fed not to tighten policy in a note to policymakers ahead of the weekend’s G20 gathering in Ankara. The Fund argued that the Fed should “remain data-dependent” and not take hasty action “with little evidence of meaningful wage and price pressures so far.” The IMF also calls on the ECB to extend QE, and for the BoJ to stand ready to do the same with its QQE program. The Fund is concerned about low inflation in major economies, arguing that “monetary policy must stay accommodative to prevent real interest rates from rising prematurely,” and also stressed that risks to the global economy have risen.

 

As central bankers ponder their next policy moves, Bank of International Settlements and IMF take very different views of persistent monetary policy accommodation and the fact that markets continue to rely on central banks. The IMF once again called on the Fed to refrain from hikes and the ECB to expand QE, while the BIS in its latest annual report called on policy makers to shift the view from short term stimulus to longer term growth measures to boost sustainable growth. Even ECB vice president Constancio said recently that monetary policy can only support not create growth and we tend to agree. Furthermore, as the BIS highlighted “signs of growing financial imbalances around the globe highlight the risks of accommodative monetary policies”. Adverse reactions even to the possibility of not so much monetary tightening but a reduction of the still very substantial degree of monetary accommodation highlight the challenges central banks will face when trying to return to more normal conditions. In this situation additional easing may only exacerbate the problem especially as low inflation is more than ever a function of oil prices, rather than the sign of broad based deflation risks, at least for Europe.

 

2015-09-03_1339.png

 

Currency Pairs, Grouped Performance (% change)

 

Worries over Chinese economic growth are once again proving too hard for the buyers of AUD. The pair is down against all the competitors while the metals markets are down as well. AUDUSD is trading near a huge bottoming formation from year 2008 but at the moment there are no signs of this helping to support price. NZD has been rallying against the AUD today. According to newstalkzb.co.nz the price of milk powder rallied by over 12% a couple of days ago. This translated into AUDNZD dropping lower from a resistance level near the upper daily Bollinger Bands (20). The pair is now trading near a potential support in sideways range. EURAUD is trading above January 2015 highs but just below a resistance created in May 2008. That explains the strong reaction lower from 1.6340.

 

Significant daily support and resistance levels for these pairs are:

 

2015-09-03_1421.png

 

Main Macro Events Today

 

• Eurozone Jul retail sales rose 0.4% m/m, less than we expected, but with June revised up to -0.2% m/m from -0.6% m/m reported initially, the three months trend rate still picked up to 0.4% from 0.3% in the three months to June. The annual rate meanwhile jumped to 2.7% from 1.7% in June. The data confirms that consumption trends continue to support growth in Q3, which ties in with improving labour market and the rise in real disposable income also thanks to the low inflation environment.

 

• Canada Trade Balance: We expect a widening in the trade deficit to -C$1.0 bln in July (median -C$1.1 bln) from -C$0.5 bln in June. The key for the report will be exports, for which we have penciled in for an 0.3% m/m gain in July after the 6.3% surge in June. A mix of factors were present in July, as oil prices tumbled and the Canadian dollar depreciated. At any rate, further growth in exports would offer key support to the BoC’s constructive outlook for second half growth, especially in the wake of the 0.5% bounce in June GDP.

 

• US Initial Jobless Claims data for the week of August 29th and should reveal an increase to a 278k (median 272k) headline from 271k in the week of August 22nd. Claims are poised to average 272k, steady from July when potential auto retooling distortions were at play. We expect August employment to reveal a 215k headline with the unemployment rate ticking down to 5.2% from 5.3% in July.

 

• US Non-Manufacturing ISM: Service sector producer sentiment is out today to finish off the August sentiment measures. We expect a decline to 58.0 (median 58.2) from 60.3 in July. Other sentiment measures for the month were much weaker and the ISM declined to 51.1 from 52.7. Overall, we expect the month’s ISM-adjusted average to drop to 51 after holding at 53 in both July and June.

 

2015-09-03_1417.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

John Knobel

Senior Currency Strategist

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 September 2015.

 

CURRENCY MOVERS OF 4th September 2015.

 

2015-09-04_1412.png

 

EURUSD, Daily

 

Draghi’s suggestion that ECB could extend the QE program dropped EURUSD below the rising trendline and the 1.1154 support. Price found support from a pivotal high at 1.1093 which coincides with 50 day SMA. Indications as a whole are mixed as the nearest support is relatively near at a daily pivot candle (1.1018 – 1.1093). This range sent the market strongly higher on August 19th which suggests that the level now holds some psychological value for the euro bulls but at the same time the sideways move and a new pivotal low at 1.1154 are very near. It has already proven to be a challenge for those with long bias today. The US Non-Farm Payroll figures are released today at 12:30 GMT. In case we see strong deviation from analyst expectations price is likely to fluctuate beyond the nearest resistance levels (1.1018 and 1.1154). Today’s NFP number is the last one before the next FOMC meeting and is seen as an important indicator for the Fed when it considers the timing of their first rate hike. Other support and resistance levels: 1.0932 and 1.1334.

 

German July manufacturing orders dropped 1.4% m/m, a much weaker than expected number. At the same time, June was revised down to 1.8% m/m from 2.0% m/m reported initially and the annual rate came in at -0.6%, versus 7.0% y/y in June. Annual rates over the summer can be volatile, due to the different timing of school holidays throughout the states, but still, the fall into negative territory highlights that while growth seems to have held up over the summer, downside risks to the economy have increased. The data will further fuel rate cut hopes and backs to the renewed jump in Bund futures at the start of the session.

 

ECB Increases Room to Maneuver: As expected, the ECB left monetary policy unchanged at the August council meeting. But Draghi was tricky, boosting bond as well as stock markets and bringing the EUR down with a technical tweak to the issue limits of QE purchases. In itself that doesn’t change the policy stance, but rather ensures that the central bank doesn’t run into supply constraints in its attempt to see through the current program.

 

US Atlanta Fed’s Q3 GDPNow was revised up to 1.5% from 1.3% previously following personal consumption and auto sales updates. According to the regional Fed: “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.5 percent on September 3, up from 1.3 percent on September 1. The nowcast for third-quarter real personal consumption expenditures growth ticked up from 2.6 percent to 2.7 percent following yesterday afternoon’s release on August motor vehicle sales from the U.S. Bureau of Economic Analysis.”

 

US ISM non-manufacturing index dipped to 59.0 in August after exploding to 60.3 in July (which was the highest print since August 2005). It’s still the 3rd highest print on record however, though declines were broad-based. The business activity index slipped to 63.9 from 64.9. However, the employment index dropped to 56.0 from 59.6 previously. New orders fell to 63.4 from 63.8. New export orders dropped to 52.0 versus 56.5. Prices paid declined to 50.8 from 53.7.

 

2015-09-04_1350.png

 

Currency Pairs, Grouped Performance (% change)

 

JPY has been strong across the board today. It is a logical continuation to the risk aversion move that started when the global stocks followed S&P 500 lower. JPY has been especially strong against AUD over the last three weeks. This has driven AUDJPY to a weekly support at 83.57. EURJPY made a lower high before dropping lower and is now approaching a weekly support at 131.87. CADJPY has also been weak and broken lower. The former pivotal support at 91.74 now limits the moves higher. GBPJPY is getting near to major support levels in the region of 179.30.

 

Significant daily support and resistance levels for these pairs are:

 

2015-09-04_1415.png

 

Main Macro Events Today

 

• US Non-Farm Payrolls: August employment data should reveal a 215k (median 220k) headline that matches July’s 215k gain. The report will be closely scrutinized as the recent market volatility and weakness in China have renewed the debate about whether the Fed will raise rates at its September meeting. The volatile month weighed on producer sentiment measures for the month and consumer confidence was depressed as well lending adding downside risk to the release.

 

• Canada Employment numbers are expected to fall 5.0k in August (median -2.5k) after the 6.6k rise in July. Canada has yet to put together back to back gains this year. So far, we have seen an oscillating pattern of gains (Jan, Mar, July) followed by declines (Feb, Apr, June). Will August be different? We are betting not, hence we see a modest decline. An as-expected dip would not alter the key take away from the labour market this year — job growth may be modest but it is enough to keep the unemployment rate at 6.8% (with the help from a falling participation rate).

 

2015-09-04_1352.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 8th September 2015.

 

CURRENCY MOVERS OF 8th September 2015.

 

Chart_15-09-08_11-52-35.png

 

EURUSD, Daily

 

In Friday’s report we identified 1.1093 – 1.1154 as a likely range to contain EURUSD action after the NFP report. Apart from a spike to the upside trading was maintained well within the range. The low for the day was 1.1090 while the high printed at 1.1189 and the close inside the range at 1.1149. As a result the last week’s candle turned into a narrow range bar that signals hesitation. In relation to daily Bollinger Bands (20) price is firmly in the mid-range and it is therefore challenging to estimate the future moves. Today’s euro zone GDP release is out at 09:00 GMT. The number is expected to be a confirmation of the preliminary release. EURUSD is finding some support from 1.1154 – 1.1170 range but the bias is on the downside. Next important support levels are at 1.0930 and 1.1018.

 

ECB’s Noyer says markets are well prepared for Fed hike. The Bank of France Governor said the “Fed’s communication has been done well and in detail, adding that an increase in the federal funds rate is inevitable and the markets are well prepared. It is not the timing that matters. Draghi’s dovish comments last week were clearly also designed to remind markets that Europe is in a different situation and that a hike in the U.S. won’t mean tighter policies in Europe, which should also help to limit upward pressure on the EUR if rate hike expectations in the U.S. are being pushed out.

 

ECB’s Weidmann: Direct impact of China equity slump limited. The Bundesbank President said at the sidelines of the G20 meeting that the direct impact of the stock correction in China and that the Bundesbank sees no reason to change its growth forecast for Germany. Still, he stressed heightened uncertainty about the outlook and said risks have shifted, while at the same time repeating once again that monetary policy cannot solve all problems. This seems to be the general tenor of ECB comments at the moments, with officials trying to dampen market reliance on central bank intervention to fix the economic outlook, although words alone won’t change that.

 

Copper and other metals are up after Glencore announced output cuts at two of its copper mines, which will cut supply by about 400 thousand tonnes. Copper prices are now up by 1.7% on the day. Oversupply has been a big issue in the copper market, similar to iron ore, crude and many other raw materials. Glencore’s decision comes after data last week showed Chinese manufacturing PMI dove to a three-year low in August. China is the world’s biggest consumer of copper, and many other commodities. Copper prices hit cycle lows on Aug-24, during the recent height of the recent Chinese stock market panic, but have since rebounded by 5.5%.

 

German labour growth accelerates sharply. Latest data show total labour costs up 0.9% q/q in Q2, bringing the annual growth rate to a whopping 3.1% y/y, from 2.8% y/y in the previous quarter and versus just 0.7% at the start of 2014. Gross wages and salaries rose 3.4% y/y in Q2. The tight labour market is boosting wage demands and settlements and with inflation at very low levels, real disposable income is picking up and supporting private consumption, but also marked increases in property prices, especially in the urban hot spots. Amid sluggish productivity growth, the increases also look unsustainable and will undermine competitiveness and are likely to push up unemployment in the medium term, with the decline in jobless numbers already starting to peter out.

 

2015-09-08_1139.png

 

Currency Pairs, Grouped Performance (% change)

 

Ugly trade data from China gave further confirmation for the slowdown in its economy. The 13.8% drop in imports was even worse than 8.2% drop expected by the economists. As China is an important trade partner for Japan this hit the Japanese stock market hard and sent JPY sharply lower against the majors. The biggest losses in have been at the time of writing against the GBP and AUD.

 

GBPJPY was trading at the lower weekly Bollinger Bands (20) and near to a support. The pair has rallied strongly and is currently challenging 50 week SMA at 184.27. AUDJPY is also deeply oversold in the weekly picture. The current up move is taking place from a support area that was formed in August 2012. EURJPY also moved higher from weekly Bollinger Bands (20) and is currently trading near a resistance area at 134.50 – 135.00.

 

Significant daily support and resistance levels for these pairs are:

 

2015-09-08_1146.png

 

Main Macro Events Today

 

• Chinese import export data disappointed. Imports slumped by almost 14% year on year while YoY exports declined by 5.5%.

 

• Canada Trade Balance: We expect a widening in the trade deficit to -C$1.0 bln in July (median -C$1.1 bln) from -C$0.5 bln in June. The key for the report will be exports, for which we have penciled in for an 0.3% m/m gain in July after the 6.3% surge in June. A mix of factors were present in July, as oil prices tumbled and the Canadian dollar depreciated. At any rate, further growth in exports would offer key support to the BoC’s constructive outlook for second half growth, especially in the wake of the 0.5% bounce in June GDP.

 

• German trade surplus widened as exports rebound: Germany posted a sa trade surplus of EUR 22.8 bln in July, up from EUR 22.1 bln in the previous month, as exports rose 2.4% m/m, more than compensating for the 1.1% m/m decline in June. Imports rose 2.2% m/m, after falling 0.8% m/m in the previous month. Unadjusted data showed a surplus of EUR 25.0 bln in July, which brought the total for the year to date to 148.7, up from 122.1 in the first seven months of 2014. Exports were up 6.8% y/y over this period. Despite the scare stories, no sign then that German trade has been impacted significantly by slowing growth in China, at least so far, and Germany is heading for a new record trade surplus, although with import prices down on the year, this is of course partly also due to low oil prices.

 

• Eurozone final Q2 GDP: Eurozone Q2 GDP growth is expected to be confirmed at 0.3% q/q and 1.2% y/y, in line with preliminary numbers, which will leave the focus on the breakdown. We expect net exports and private consumption to have been the main drivers of growth. Investment remains the Eurozone key weakness, despite the very accommodative monetary policy. There are signs that loan growth is stabilising, but even in Germany, where financing conditions are not really a problem, investment has remained modest with structural factors, rather than financing conditions the main impediment for stronger investment.

 

2015-09-08_1141.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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 : 9th September 2015.

 

CURRENCY MOVERS OF 9th September 2015.

 

Chart_15-09-09_13-53-39.png

 

EURUSD, Daily

 

In The 1.1214 resistance worked again yesterday and turned EURUSD down after the pair rallied from the support area identified in yesterday’s report. The pair keeps on moving sideways between a pivotal support at 1.1085 – 1.1150 and resistance at 1.1214. The pair also seems to honour 50 period SMA in the 4h timeframe as the slightly descending moving average has been limiting EURUSD advances lately. Today’s candle has potential to be a decisive one as it will create another lower high should it close down. There are two lower lows already and should today’s bar close below previous candle low another lower high will be created. Price has created lower highs in intraday charts, which suggests that the pair should move further into the aforementioned pivotal support. Apart from this pivotal support area support and resistance levels are at 1.0930, 1.1018 and 1.1214.

 

ECB’s Reinesch: Loose Monetary Policy support structural reforms. The governor of Luxembourg’s central bank said the “current accommodative monetary policy” provides a “window of opportunity” for structural reform. He stressed that “favourable financing conditions will offset possible short-term adjustment costs and will bring forward the longer-term benefits of reform”. According to Reinesch these “could focus on simplifying the administrative burden involved in creating a new firm or in growing a firm beyond arbitrary thresholds which trigger increases in compliance costs.” The ECB has been urging enhanced structural reforms for a while now, but in our view the risk is that without market pressure, governments will continue to shy away from any measures that could risk votes.

 

According to Eurostat the Seasonally adjusted GDP rose by 0.4% in both the euro area (EA19) and the EU28 during the second quarter of 2015, compared with the previous quarter, according to a second estimate published by Eurostat, the statistical office of the European Union. In the first quarter of 2015, GDP grew by 0.5% in both areas. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.5% in the euro area and by 1.9% in the EU28 in the second quarter of 2015, after +1.2% and +1.7% respectively in the previous quarter. During the second quarter of 2015, GDP in the United States increased by 0.9% compared with the previous quarter (after +0.2% in the first quarter of 2015). Compared with the same quarter of the previous year, GDP grew by 2.7% (after +2.9% in the previous quarter).

 

The US consumer credit expanded 6.7% in July. It is a sign of confidence most likely propelled by low fuel prices and relatively steady job market. Outstanding consumer credit, a reflection of nonmortgage debt, rose $19.1 billion or at a 6.7% annual rate in July, the Federal Reserve said Tuesday. Consumer credit has been trending higher. It has increased each month for nearly four years. July credit growth was roughly in line with economists’ expectations. They had predicted a $19.5 billion increase. Revolving credit, mostly credit cards, rose at a 5.7% annual rate. In June it climbed at an annual rate of 10%. Non-revolving credit, made up largely of auto and student loans, increased at a 7% annual rate, compared with 9.4% in June. Almost 70% of US GDP growth comes from consumer spending and steady growth in consumer credit therefore is a positive indication for the economic growth.

 

The US Labor Market Conditions Index (LMCI) rose by 2.1 points in August. This was the largest monthly improvement in US labor markets over the last six months. There were also revisions for previous months’ readings 2015 were revised up by a net 2.3 points in yesterday’s release. This measure contracted by 370 points from January 2008 to June 2009 but now it has made up about 90% of the 2008-09 deterioration.

 

2015-09-09_1337_001.png

 

Currency Pairs, Grouped Performance (% change)

 

All currencies continue their rally against JPY today. JPY is typically seen as a safe haven currency and stock market gains across the globe signal that investors and other market players are once again ready accept risk. All the other currencies seem to be on a wait and see mode as fluctuations are relatively small when compared to JPY.

 

USDJPY has broken out of a 4h downtrend and is now trading near Aug 28th pivotal resistance. The low at 120.90 has tested bull commitment in USDJPY today. AUDJPY has rallied to a level that turned the pair lower Sept 3rd and has caused the market to hesitate: bearish pinbars in 4h chart. EURJPY hit the upper end of my resistance area at 135 and turned lower. Looking bearish now with some room to fall.

 

Significant daily support and resistance levels for these pairs are:

 

2015-09-09_1355.png

 

Main Macro Events Today

 

• Chinese import export data disappointed. Imports slumped by almost 14% year on year while YoY exports declined by 5.5%.

 

• Canada Housing Starts: We expect starts to improve to a 195.0k unit rate in August from the 193.0k pace in July. The economies of Canada’s energy producing regions have taken well publicized hits from the fall in energy prices. We expect slower activity in those markets to continue. However, mortgage rates are lean, which has boosted activity in other regions and helped maintain momentum in construction activity. Building permits will also be released and are expected to show a 5.0% drop in July after the 14.8% surge in June. A pull-back in multi-units is seen driving the pull-back in total permit values.

 

• Bank of Canada Rate decision: The August jobs report capped the recent run of data consistent with an economy at mid-year that is not in need of further policy stimulus. We’ve seen encouraging reports in the form of a 0.5% bounce in June GDP, back to back June and July export gains and jobs growth in both July and August. Granted, considerable downside risks remain, notably via a weaker China and volatile oil prices. But an improving U.S. economy underpins the outlook for ongoing growth in exports — about 75% of Canada’s exports are shipped to the U.S. And the plunge in Q2 investment suggests the worst of the oil patch investment cuts are behind us. While no further stimulus is currently necessary, the Bank of Canada will maintain a very dovish tone in Wednesday’s announcement as they retain scope to take further action if the economic data take a dive.

 

2015-09-09_1337.png

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

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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    • Bitcoin (BTC) Consolidates As Bears And Bulls Tussle Above $9,400 Support Key Resistance Zones: $10,000, $11,000, $12,000 Key Support Zones: $7, 000, $6, 000, $5,000 BTC/USD Long-term Trend: Ranging Bitcoin has failed to break above $10,400 overhead resistance. The bulls made two unsuccessful attempts at the resistance. In the recent one, the bears took the price to a low of $9,290 and then pulled back above $9,400. In the interim, the price is fluctuating above $9,400 and approaching the high of $9,800. As the bulls have failed to push above the overhead resistance, the pair may commence a range movement. Nonetheless, it is anticipated that if the bears break below the $9,400 support, selling pressure may resume. Meanwhile, BTC may continue the range-bound movement. BTC/USD – Daily Chart Daily Chart Indicators Reading: After the downward move of Bitcoin, the Relative Strength Index has also fallen to level 52. This simply means the coin is above the centerline 50. In other words, BTC is in an uptrend and it is likely to rise. Price broke the support line of the ascending channel. The uptrend will be in proper perspective only when the bulls break into the ascending channel. BTC/USD Medium-term Trend: Bearish On the 4- hour chart, Bitcoin now trades between $9,400 and $10,200 after the first breakdown at the $10,400 overhead resistance. The bulls tested the resistance at $10,200 twice , before the downward move. The large bearish candlesticks tested a low of $9,290. However, the small body candlesticks that follow are called indecisive candlesticks. BTC/USD – 4 Hour Chart 4-hour Chart Indicators Reading Presently, BTC is trading above a 25% range of the daily stochastic. That is the coin is in the bullish trend zone. The 21-day SMA and the 50-day SMA are sloping horizontally indicating a sideways trend. General Outlook for Bitcoin (BTC) From every indication, if the bulls fail to push above the overhead resistance, the price action in October and November will repeat itself. For the past three days, BTC is still fluctuating above $9,400. Instrument: BTC/USD Order: Sell Entry price: $9,700 Stop: $9,900 Target: $8,400 Note: Learn2Trade.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results Source: https://learn2.trade 
    • The Sharp Recovery In EURJPY Lose Momentum, Falters Beneath The Level At 121.00 EURJPY Price Analysis – February  21 The single European currency rose 88 basis points or 0.73% against the Japanese yen in the previous session. After two consecutive sessions showing strong growth, EURJPY is now losing some momentum amid JPY bulls. Key Levels Resistance Levels: 122.37, 122.87, 121.00 Support Levels: 119.99, 117.08, 115.83 EURJPY Long term Trend: Ranging The EURJPY rebound from the level of 118.46 continues to advance from the previous session, but today it has stalled. Super-speed acceleration claims that a decline from 122.87 level could have ended in three waves to 118.46 level. However, the support level formed by the intersection of the moving average of 5 and 13 at 119.90 level can support the exchange rate during the trading session on Friday, while greater advance can continue from the level of 115.83. EURJPY Short term Trend: Ranging From an analysis of the 4-hour time frame, the intraday bias is now on the rise for a resistance level of 121.15 at first. The breakthrough will be aimed at 122.87 high levels. On the other hand, a breakdown of the secondary support levels of 119.99 could change the bias towards lower testing to retest the low level of 118.46 instead. Instrument: EURJPY Order: Sell Entry price: 121.00 Stop: 119.66 Target: 121.47 Note: Learn2Trade.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results Source: https://learn2.trade 
    • What makes InstaForex a good choice is that it is a reliable binary options trading platform so the trader would not have to dread anything if he decides to choose this platform.  They offer a 24/7 consultancy support. The exclusive online support facilitates the trader to get all the help that he has been looking for so far. This means that if the trader has any questions he can put them up ready to reach a solution to his problems. InstaForex provides trading binary options on currency pairs, cryptocurrency pairs, metals, and CFDs on shares.   InstaForex Broker 2.000$ Forex / Binary Options No Deposit Bonus! Crypto Trading Available! https://binaryoptionsfree.eu/review/instaforex-broker-2-000-forex-binary-options-no-deposit-bonus/
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    • Quantower update! https://www.quantower.com/Here is what the latest version has to offer: 37 Predefined Options Strategies Volatility Smile chart for Options Series Cumulative Last Trade Size in DOM Trader Added OCO orders for Rithmic connection ________________________________37 Predefined Options StrategiesIn this release, we improved the Option Analytics panel by adding a list of 37 predefined option strategies that you can apply for analysis or trading with one click. For convenience, all strategies are divided into 4 categories: Up Trend Down Trend Volatility Based Arbitrage strategies For each strategy, you can see a general risk profile scheme, description, and structure, i.e. what options (Call or Put) it consists of. Once you have selected the desired strategy from the list, click on the “Add Strategy” button and it will appear in the bottom table “Test & Real Positions”. In this table, you can analyze several strategies at once, simply ticking off the necessary strikes.   It is important to note that all option strategies are built on the strikes closest to ATM (at-the-money). To extend the strategy profile, you need to manually add the necessary strikes via the Paper column in the options desk.Volatility Smile chartAnother improvement that we added to the Option Analytics panel is the Volatility Smile chart. It shows the implied volatility values for all strikes on the same line. This allows you to compare the value of options and understand is their overbought or oversold relative to each other. Cumulative Last Trade Size in DOM TraderChanged the display of the Last Trade Size, which was located on the price axis. In the new version, we placed Last Trade Size in a separate column and added a mechanism for accumulating trading volume, if the price did not change.For example, if the previous trade was on the Bid side, and then the latest trade is on the Ask side at the same price, then the Last Trade Size will add the value. But if the price will change on one tick up or down, then the Last Trade Size will be reset.   Added OCO orders for Rithmic connectionIn the last release, we have already added Bracket Orders, which allow you to reduce losses in case of an unfavorable trade. Today we present OCO orders (One Cancels Other), which is a widely known and popular order type among traders. Using the trading functionality of the Quantower platform, you can set two independent limit orders and combine them into an OCO group. When one of the orders is executed, the second will be automatically canceled.Additionally, for each limit order, you can set Bracket orders (SL and TP) and then merge them into a group. As ever, we’d love to hear what you think about Quantower, your feedback helps us improve whole the platform. Keep an eye out for future updates!
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