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  #61  
Old 17-08-2015, 13:16
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: U.S. INFLATION AND FED RATE HIKE RUMORS STEAL THE SHOW



EUR/USD

Weekly Analysis: Last week we saw stronger movement than we’ve become accustomed to see from the pair lately. The euro strengthened on optimism regarding the Greek bailout and an end to the crisis, taking the pair above resistance.


Technical Outlook

The zone of resistance created by 1.1000 and 1.1100 proved hard to break in the past and all moves outside were quickly reversed. Now price has moved once again outside the zone but it seems to have trouble breaking 1.1215 and last week we saw a bounce at this level. Once and if 1.1215 is broken to the upside, the pair is likely to move into the next resistance located at 1.1450, while a move below 1.1100 would open the door for another drop towards 1.0820.

Fundamental Outlook

Monday no major releases are scheduled and Tuesday the only notable indicator is the U.S. Building Permits. Wednesday however, will be a very important day because we will get insights into the U.S. inflation with the release of the Consumer Price Index and also the Fed will release the Minutes of their latest meeting. This is a very important document because it usually offers hints about the next rate hike and traders around the world analyze its contents to decide the next direction.

Thursday the U.S. Existing Home Sales come out, together with the Unemployment Claims and Friday focus shifts on Europe for the release of the French and German Manufacturing PMIs which are leading indicators of economic health derived from the opinions of purchasing managers from the Manufacturing sector.


GBP/USD

After what appeared to be a break of support, the pair rebounded early last week and the bullish impulse continued, with price approaching 1.5675, showing that the ranging period is still not over.


Technical Outlook

Price is still trapped between 1.5500 support and 1.5675 resistance, with daily candles showing long wicks in their upper and lower side, which is a sign of indecision. However, the pair is trading above the 50 period Exponential Moving Average and this is a bullish sign so we may see a break of 1.5675 early in the week. If this is the case, the move is likely to extend into 1.5800 resistance or at least to continue until the oscillators become overbought. A bounce at resistance would make 1.5500 the first target.

Fundamental Outlook

Two major indicators are released this week by the United Kingdom: the Consumer Price Index (main gauge of inflation) comes out Tuesday, followed Thursday by the British Retail Sales which account for the major part of economic activity. Considering the importance of these indicators and the U.S. releases, we expect this week a move outside the range the pair has been trapped in.
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  #62  
Old 24-08-2015, 13:13
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: EURO SOARS, DOLLAR UNABLE TO RESPOND, POUND STILL IN LIMBO



EUR/USD

Weekly Analysis: The euro had an easy week against the US Dollar as the greenback suffered from back and forth speculation on a possible rate hike. German’s policy makers approved the third Greek bailout with overwhelming majority, contributing to euro strength.


Technical Outlook

The resistance at 1.1215 was decisively broken as price moved strongly to the upside for the last three days of the last week and now the key level at 1.1450 is threatened. However, price traveled almost 350 pips without even the smallest retracement, a behavior not seen in a long while, so we expect a move to the downside that should be considered a pullback, not a reversal. This move is likely to occur once 1.1450 is touched considering that the Relative Strength Index is entering overbought but it’s still pointing upwards, suggesting that price will still move to the upside before retracing.

Fundamental Outlook

Monday there are no special indicators scheduled for release but Tuesday things pick up with the release of the German IFO Business Climate and the U.S. Consumer Confidence. Both are leading indicators of economic optimism, the first being derived from the opinions of about 7,000 German businesses and the second is based on the outlook of about 5,000 households.

Wednesday’s highlight is the release of the U.S. Durable Goods Orders (goods with a life expectancy of at least 3 years) and Thursday the U.S. Preliminary Gross Domestic Product comes out. This is the broadest measure of an economy’s performance and its importance is increased by the fact that the Fed is closely monitoring such indicators in order to time a rate hike.

Friday European inflation takes center stage as the German Preliminary Consumer Price Index comes out. Inflation in the EU has been too low for quite a long period and the German economy is one of the most important for overall inflation so an increase suggests that the inflation of the entire zone could pick up.


GBP/USD

Inflation improved in the United Kingdom but Retail Sales dropped, generating mixed movement with a slightly bullish bias. The pair is still struggling to break resistance but neither side is in clear control.


Technical Outlook

The daily candles show long wicks and small bodies so it’s clear that the pair is still surrounded by indecision. Although the resistance at 1.5675 has been breached several times last week, we still haven’t seen a strong candle that closed above it so a move south still has a high probability of occurring. The Stochastic has reached overbought and is curving downwards, increasing the chances of a drop; if this happens, the 50 period Exponential Moving Average will be the first target, otherwise the pair is likely to move into 1.5800.

Fundamental Outlook

The Pound has a slow week ahead as the United Kingdom didn’t schedule major news releases except the Second Estimate Gross Domestic Product which comes out Friday. This is the main gauge of overall economic performance and it’s the second version out of the three (Preliminary, Second Estimate and Final).
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  #63  
Old 31-08-2015, 02:10
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: ECB PRESS CONFERENCE, U.S. JOBS DATA – ALL THE INGREDIENTS FOR ANOTHER WILD WEEK



EUR/USD

Weekly Analysis: The week that just ended showed a sharp reversal after establishing a multi-month high at 1.1713. The pair came down as hard as it climbed, influenced by turmoil on the Chinese markets and speculation about how they will affect a potential Fed rate hike.


Technical Outlook

Two important levels were breached to the downside: 1.1450 and 1.1215 and although these provided good resistance in the past, they did not turn into support and didn’t manage to push price higher once touched. Now the bears are in control and it is less likely to see another sharp turn to the upside, the oscillators show good momentum and are moving down coming from overbought so we anticipate a move into the bullish trend line seen on the Daily chart above. The fundamental data will play a major role in this week’s price action.

Fundamental Outlook

Monday we will receive more information about European inflation as the Flash Estimate Consumer Price Index is released. Tuesday US Manufacturing data comes out in the form of the Purchasing Managers’ Index and Wednesday we take a first look at US jobs data as Automatic Data Processing Inc. will release their version of the US Non-Farm Employment Change report.

The “heavy” events start Thursday when the European Central Bank announce their rate decision and ECB President Mario Draghi holds a press conference during which he answers journalists’ questions. The conference creates strong movement almost always so caution is recommended while the ECB President speaks. The economic week ends Friday with the most important jobs report for the US economy: the Non-Farm Payrolls (also known as Non-Farm Employment Change). The indicator shows how many new jobs were created during the previous month and has a strong impact on the US currency because more jobs lead to increased levels of consumer spending, which represents a major part of overall economic activity.


GBP/USD

After a bullish first day of last week, the pair dropped substantially and traveled roughly 500 pips to the downside, reaching 1.5330 support and generating a massive win for the bears.


Technical Outlook

The pair showed an almost perfect bounce at 1.5800 resistance and the bears took over, creating the biggest movement seen during the last period. Price was trapped between 1.5675 and 1.5500 and now that it has broken out, we expect the current direction to continue during the weeks to come. The first barrier in front of falling prices is the key support at 1.5330 where we expect price to stall or rebound slightly higher and continue lower afterwards. The oscillators show good downside momentum but the RSI is approaching oversold, increasing the chances of a pullback during the week.

Fundamental Outlook

Monday British banks will be closed in observance of Summer Bank Holiday, thus no major indicators are released and liquidity might be irregular. Tuesday the British Manufacturing PMI is released, followed Wednesday by the Construction PMI and Thursday by the Services PMI. These are all surveys of purchasing managers and act as leading indicators of economic health so numbers that surpass analysts’ expectations are beneficial for the Pound. As always, the US events will have a direct and strong impact on the pair.
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  #64  
Old 07-09-2015, 13:54
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: SIGNS OF A DOWNTREND: DOLLAR STILL STRONG DESPITE SOFT U.S DATA



EUR/USD

Weekly Analysis: The week that ended was characterized by bearish price action as ECB President Mario Draghi had a dovish stance on economic growth and inflation expectations. U.S. employment data was mixed, showing that fewer new jobs were created but the Unemployment Rate dropped, bringing some strength to the dollar.



Technical Outlook

The pair moved below the 50 days Exponential Moving Average but the support at 1.1100 stopped the fall, at least for the moment. This week we expect a break of the mentioned support and a move into the uptrend line seen on the chart above. If the trend line is indeed touched, the oscillators are likely to become oversold and this may create a bounce higher, with the moving average becoming the first potential resistance. If current support rejects price, 1.1215 will become first potential target.

Fundamental Outlook

Monday U.S. banks are closed due to Labor Day so there are no major indicators scheduled and the pair may suffer from irregular volatility. Tuesday the headline is the release of the Euro-Zone Gross Domestic Product and Wednesday is a slow day, without notable events.

Thursday the US Unemployment Claims come out, showing how many people applied for unemployment related benefits and Friday we will get more information about European inflation as the German Consumer Price Index is released. Also, on the dollar side, the University of Michigan will release their Consumer Confidence survey which shows how respondents rate the current and future economic conditions.


GBP/USD

British economic data disappointed throughout last week and this was reflected in a weak Pound and a massive drop for the pair, without the smallest pullback.



Technical Outlook

Two important support levels were broken last week (1.5330 and 1.5200) and it seems like a new medium term downtrend is beginning to shape up. The Relative Strength Index and the Stochastic are both oversold and this fact, combined with the lack of a proper pullback, makes us believe that this week we may see bullish price action. It is important to note that all moves up should be treated as pullbacks in a downtrend.

Fundamental Outlook

Wednesday is the first important day of the week for the Pound as Manufacturing Production numbers come out, followed later in the day by the NIESR estimate of the British Gross Domestic Product.

Thursday the Bank of England will announce the interest rate decision and the structure of the members’ votes. Analysts don’t expect a rate change but if more members of the committee voted for a hike, the Pound is likely to strengthen because this could mean that a rate liftoff is getting nearer. As always, the U.S. indicators released throughout the week will have a direct impact on the pair.
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  #65  
Old 14-09-2015, 15:48
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: IN THE SHADOW OF THE EPIC RATE DECISION



EUR/USD

Weekly Analysis: Last week price action was mostly bullish, on the back of a lackluster fundamental scene and US Dollar weakness, which generated a move above immediate resistance. Volatility increased in the second part of the week, mostly influenced by economic releases.


Technical Outlook

The pair is now trading above the 50 day Exponential Moving Average and above 1.1215 so the next logical destination is the important level at 1.1450. Both the Stochastic and the Relative Strength Index are moving upwards, supporting a continued move to the upside, at least until they approach extreme levels (overbought). A touch of resistance combined with a potentially overbought state of the oscillators may generate a move lower but the week’s direction will be heavily influenced by the huge Fed event.

Fundamental Outlook

Ahead of the major Fed rate decision, the markets will be influenced Tuesday by the German ZEW Economic Sentiment which is a survey of about 275 investors and professional analysts focused on their opinion regarding the 6-month economic outlook. The same day the U.S. Retail Sales are released so we have a busy day, with possibly strong movement.

Wednesday we take a look at American inflation as the U.S. Consumer Price Index is released and Thursday we will witness probably the most anticipated event of the year so far: the Federal Funds Rate decision. Since the beginning of the year, speculation has surrounded a potential U.S. rate hike and the most talked about date for such a change is finally here. An increase is anticipated, but even if it doesn’t occur, the US Dollar will move strongly at the time of the release, which will be accompanied by a Press Conference and a Rate Statement. It is likely to see irregular movement during the days preceding the Fed meeting so caution is recommended throughout the week.


GBP/USD

For almost the entire last week the Pound strengthened against the greenback and we saw a bullish pullback which is now close to resistance.


Technical Outlook

The pair is now approaching a heavy resistance zone represented by the 50 days Exponential Moving Average and the level at 1.5500. Both oscillators are still bullish but before the current up move, the bears showed great strength which may come back once 1.5500 resistance is touched. If this is true, 1.5330 will become the first target but keep in mind that the importance of the Fed rate decision will overshadow any technical scenario.

Fundamental Outlook

Apart from the Fed decision, the pair will be influenced by the British inflation numbers which come out Tuesday in the form of the Consumer Price Index, by the British Claimant Count (change in the number of people who applied for unemployment related help) released Wednesday and by the British Retail Sales scheduled for release Thursday. We expect a busy week, but it’s possible to see choppy price action until the Fed meetings.
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  #66  
Old 21-09-2015, 14:34
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: FED DOESN’T HIKE, YET SPECULATION STILL SURROUNDS THE US DOLLAR



EUR/USD

Weekly Analysis: Last week the US Dollar was heavily influenced by the Fed rate meeting and by speculation regarding the outcome. As we know the Fed decided to maintain the rate unchanged but Fed Chair Yellen mentioned they are closer to a hike, which could come as soon as October.


Technical Outlook

The rate decision initially weakened the dollar but probably hopes of an October hike, staged a comeback and the pair bounced at 1.1450 resistance. The first support is located at 1.1215 which combined with the 50 day Exponential Moving Average will create a confluence zone which will be tough to break. If this zone is breached, we expect price to head into the bullish trend line visible on the chart, otherwise we will see another encounter with 1.1450.

Fundamental Outlook

The week ahead is rather calm when it comes to economic releases but here are the most notable events: Monday the greenback will be affected by the Existing Home Sales numbers and Wednesday ECB President Mario Draghi will testify on monetary policy before the European Parliament. Thursday the German IFO Business Climate survey comes out, alongside the US Durable Goods Orders (goods with a life expectancy of at least 3 years).

The week ends Friday with the Final version of the American Gross Domestic Product; although this is the least important out of the three versions (Advance, Preliminary and Final), it must not be overlooked as it can generate US Dollar strength if it posts a higher than expected value.


GBP/USD

Even before the Fed event, the Pound started to strengthen against the greenback, mostly because of hints that the Bank of England is preparing a rate hike in the near future. The week was overall bullish but some gains were erased Friday.


Technical Outlook

Last week’s climb took price above the 50 day Exponential Moving Average, in close vicinity to 1.5675 resistance but candles corresponding to the last 2 days show long wicks in their upper parts. This is a sign of rejection, which combined with the importance of 1.5675 resistance for short term movement, makes us believe that we will see a move towards 1.5330 this week. A bounce at 1.5500 would suggest that bullish movement will continue and that 1.5675 will probably be broken.

Fundamental Outlook

The week is very slow for the Pound, with the only noteworthy indicator being the Public Sector Net Borrowing numbers released Tuesday. The indicator shows the difference between spending and income for the government and public corporations, with a higher number being considered detrimental because it shows more debt. Usually the impact of this release is mild, unless there’s a big difference between expectations and actual numbers.
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  #67  
Old 28-09-2015, 15:07
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY'S ANALYSIS: IMPROVED U.S. JOBS SITUATION – A STEP TOWARDS 2015 RATE HIKE



EUR/USD

Weekly's Analysis: The first 2 days of last week were bearish, with the pair heading towards the support at 1.1100 but once this barrier was hit, price action became mixed and neither side managed to post further advances.


Technical Outlook

The pair is now trapped between 1.1215 resistance and 1.1100 support and overall movement is choppy. We maintain a slightly bearish bias, anticipating a break of 1.1100 and a touch of the bullish trend line. If the trend line is broken, the pair is “free” to travel lower, with 1.0820 as the first major target. To the upside 1.1450 remains key resistance.

Fundamental Outlook

The first important event of the week comes Monday in the form of an interview of FOMC voting member William Dudley who will discuss inflation expectations and interest rate increase. This interview is of direct interest to Forex market participants and could spur strong US Dollar movement. Tuesday a United States Consumer Confidence survey is released and will act as a leading indicator of consumer spending, while on the Euro side we will take a first look at German inflation as their Preliminary Consumer Price Index comes out.

Wednesday the European Consumer Price Index Flash Estimate comes out, offering insights into overall Euro Zone inflation and Automatic Data Processing Inc. will release their version of the Non-Farm Employment Change which will affect the greenback but to a lower extend than the government jobs data released 2 days later.

Thursday is a quiet day, with the most important release being the US Manufacturing PMI (survey or purchasing managers regarding economic conditions in the manufacturing sector) and Friday will probably be the most volatile day of the week as the U.S. Non-Farm Payrolls are released. This is widely considered the most important jobs related report for the United States and the impact on the US Dollar is almost always huge, with more jobs strengthening it and the opposite for less jobs.


GBP/USD

The pair dropped 5 days out of 5 last week and the bears managed to break important support levels as the dollar strengthened and the pound was affected by weak economic data.


Technical Outlook

Short term price action is controlled by the bears but the pair is printing a triple bottom pattern around 1.5170. This is a bullish pattern which is likely to generate upside movement and if this is the case, we may see a touch from below of 1.5330. A break of 1.5170 zone and thus an invalidation of the triple bottom will open the door for a move towards the next level of interest, which is located around 1.4970; the oscillators are still bearish, supporting such a move.

Fundamental Outlook

Tuesday Bank of England Governor Mark Carney will deliver a speech at the Lloyds of London but the late hour (7:40 pm GMT) may hinder a high impact unless the Governor makes intriguing or strong remarks. Wednesday the British Current Account (difference in value between imported and exported goods and services) is made public and the same day the Final Dross Domestic Product is also released.

Thursday we get insights into the health of the British manufacturing sector with the release of the Manufacturing Purchasing Managers’ Index and Friday the only notable event for the Pound is the release of the Construction PMI. Of course, the U.S. Non-Farm Payrolls will have a strong impact on the pair as always.
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  #68  
Old 05-10-2015, 14:53
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: NFP DISAPPOINTS, PUSHING RATE-INCREASE OUTLOOK FURTHER



EUR/USD

Weekly Analysis: The week was mixed ahead of the American jobs data as most market participants waited to see the result. The pair rallied strongly on the back of US Dollar weakness generated by the disappointing numbers but the euro soon gave back most of the gains.


Technical Outlook

The climb was stopped by the resistance level located at 1.1320 and price moved again below 1.1215, so a breakout didn’t occur despite important economic data. First support is located at 1.1100 but the pair is still in indecision mode and it will remain so until either 1.1320 or 1.1100 are broken. The 50 period Exponential Moving Average is flat and doesn’t offer any kind of support or resistance for the time being but keep in mind that U.S. data was much worse than expected so we are likely to see dollar weakness.

Fundamental Outlook

The week is slower than the last in terms of economic releases but here are the main events: Monday the US Dollar will be affected by the Non-Manufacturing PMI and Tuesday the U.S. Trade Balance (difference between the value of imported and exported goods and services) comes out. Both are important indicators but the impact often depends on the difference between forecast and actual (a bigger difference will generate stronger impact). Also Tuesday, ECB President Mario Draghi will deliver a speech in Frankfurt so the euro is likely to show increased volatility.

Wednesday is a slow day, without notable events but Thursday the always important FOMC Meeting Minutes are released, offering insights into the Fed’s latest meeting. Many analysts’ expected a rate increase which didn’t occur so maybe some questions regarding the reasoning behind this decision will be answered in the Minutes. That release will be the last major event of the week because Friday no major indicators are scheduled.


GBP/USD

The week ended almost where it started, with the main event being the U.S. NFP which generated a strong climb followed by a smaller drop.


Technical Outlook

The support at 1.5100 was nearly touched last week and price bounced higher but the bulls couldn’t close above 1.5200 despite the blow took by the US Dollar from disappointing jobs data. This shows that the Pound still lacks the strength needed to stage a move higher but if early in the week, the pair moves above 1.5200, we may see an attempt to travel towards 1.5330, otherwise 1.5100 is likely the next destination.

Fundamental Outlook

The economic week opens for the Pound Monday with the release of the Services PMI, a survey of purchasing managers regarding the health of the services sector, followed Wednesday by the Manufacturing Production numbers (shows changes in the total value of output generated by the manufacturing sector).

The last major release of the week for the Pound is the BOE Interest Rate scheduled Thursday. The current value is 0.50% and no change is expected but at the same time a breakdown of the MPC members’ votes is made public and this can have an impact on the Pound if some members have changed their vote compared to the previous release.
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  #69  
Old 12-10-2015, 13:20
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: RANGING CONDITIONS STILL ACTIVE AHEAD OF U.S. RETAIL SALES AND INFLATION DATA



EUR/USD

Weekly's Analysis: Last week the pair picked up speed and moved to the upside with more determination on the back of soft economic data coming out of the United States. The Fed didn’t offer clear clues that a hike is due this year, contributing to a weak US Dollar.


Technical Outlook

The resistance at 1.1215 was clearly broken and the bulls are making a run for 1.1450. Both oscillators are moving upwards, without being overbought so the chances of an encounter with the key resistance at 1.1450 are higher now than they’ve been before but keep in mind we are still in a raging market, without clear direction. A break of 1.1450 would bring in additional buyers and would mark a possible end to the ranging market. To the downside, the pair is supported by a bullish trend line, the 50 period Exponential moving Average and 1.1215.

Fundamental Outlook

Monday U.S. banks are closed, celebrating Columbus Day and Europe didn’t schedule major announcements so we expect a slow grinding day. Tuesday the German ZEW Economic Sentiment survey comes out, showing the opinions of about 275 German professional investors and analysts about a 6-month economic outlook.

Wednesday action picks up as the United States Retail Sales numbers come out but things on the European side are slow. Thursday the U.S. Consumer Price Index is released and the impact on the market is likely to be strong especially because the Fed takes inflation into consideration when deciding whether to raise rates or not. Later in the day the Philly Fed Manufacturing PMI comes out, offering insights into the health of the manufacturing sector in the Philadelphia district.

The week ends Friday with the release of the European Final CPI, which has a medium impact on the market, mainly because the German Prelim CPI and CPI Flash Estimate are already released. Later in the day the University of Michigan will release a Consumer Sentiment survey which is important for the US Dollar because increased levels of confidence among consumers suggest that an increase in retail sales will soon follow.


GBP/USD

The Pound had a bullish week, mostly because its counterpart, the dollar, suffered from mixed sentiment and signals from the Fed.


Technical Outlook

Although the pair made substantial advances last week, important resistance sits in front of further upside movement: price bounced Thursday and Friday at the 50 days Exponential Moving Average and 1.5330 horizontal resistance is not clearly broken. If this confluence zone can be broken during the first days of the week, we are likely to see a move close to 1.5500 but otherwise the zone around 1.5170 – 1.5200 is the next target.

Fundamental Outlook

The main events for the Pound are the release of the British Consumer Price Index (main gauge of inflation) scheduled Tuesday and the Claimant Count Change which comes out Wednesday The second indicator shows how many people applied for unemployment related help and a higher number is detrimental for the economy because people without jobs spend less, thus a slowdown of consumer spending is likely to follow.
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  #70  
Old 19-10-2015, 14:53
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: MAJOR TURNING POINTS AHEAD. ECB INTEREST



EUR/USD

Weekly Analysis: Last week the economic data was mixed and we witnessed an important event for medium term movement: a false break of key resistance (1.1450). This is likely to influence future price action and can be considered a major turning point.


Technical Outlook

Although recent movement was choppy, the pair had a bullish bias but a lot of bearish pressure was also present. Now it’s time to see if the bulls really have what it takes to establish clear control and they could do this only if 1.1450 is broken early in the week. The last 2 days of the previous week belonged to the bears and the fact that 1.1450 rejected price is a clear sign of bull weakness but the beginning of a medium term downtrend must be confirmed by a break of the bullish trend line seen on the daily chart above (the moving average and 1.1215 support are also important for this scenario).

Fundamental Outlook

The first notable event of the week is the release of the U.S. Building Permits, scheduled Tuesday. The indicator shows the annualized number of permits issued for the beginning of residential building during the previous month. A higher value is usually beneficial for the greenback because it shows increased construction activity but the impact is often mild.

Wednesday the calendar is light and Thursday the most anticipated event of the week takes place: the ECB announces the interest rate and ECB President Mario Draghi holds a press conference, discussing the rate decision. Journalists ask questions and this is usually the most important part of the day, with strong moves for the euro.

The economic week ends Friday with the release of the German and French Manufacturing PMIs; both are leading indicators of economic health derived from the opinions of purchasing managers from the manufacturing sector and higher numbers bring euro strength.


GBP/USD

The Pound showed great strength last week and pushed the pair into 1.5500 resistance although the British economy is not at its best. U.S. data was also pretty weak, contributing to the pair’s climb.


Technical Outlook

After touching 1.5500 resistance, the pair paused for two days and retraced slightly lower. This could be a sign of buyer weakness but could also be just a consolidation generated by traders closing their positions at this important level. If the latter is true, we will probably see a move towards 1.5675 this week but keep in mind that the daily Stochastic is touching its overbought level; this is not an extreme condition but further climbs can be slowed down, especially if the Relative Strength Index will enter overbought too.

Fundamental Outlook

Only two important events will affect the Pound this week: Tuesday, Bank of England Governor Mark Carney will testify before the Treasury Select Committee about the BOE Bill and Thursday the British Retail Sales numbers are announced. Both events can bring increased volatility so caution is recommended.
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  #71  
Old 26-10-2015, 13:55
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: DOLLAR GAINS MOMENTUM AHEAD OF FED’S RATE MEETING



EUR/USD

Weekly Analysis: Last week price movement was very slow before the speech of the ECB President Mario Draghi but his comments about more stimulus and even a possible decrease of the deposit rate triggered euro weakness and brought the pair out of the small range.


Technical Outlook

An important bullish trend line was broken last week, together with the 50 period Exponential Moving Average and the horizontal support at 1.1100. This puts the sellers in clear control and prepares us for a medium term bearish market but does not exclude a bullish pullback. Price is likely to stall around 1.1000 before continuing towards 1.0820 which is key support for medium term price action; first resistance is located at 1.1100.

Fundamental Outlook

The first event of the week is the release Monday of the German IFO Business Climate which is a survey with a large sample of about 7,000 businesses. Tuesday the focus shifts on the U.S. economy for the release of the Durable Goods Orders and the CB Consumer Confidence survey. Lately the impact of these indicators has been lower than usual but strong movement is still a distinct possibility.

Wednesday the Fed will announce their decision on the interest rate and a FOMC Rate Statement will be released, showing the reasons behind the decision. Unlike in September, a rate hike is not expected (currently <0.25%) but caution is recommended throughout the day.

The German Preliminary Consumer Price Index is scheduled Thursday; because it’s an important gauge of inflation, higher numbers can positively affect the euro. The same day the US Dollar will be heavily influenced by the U.S. Advance Gross Domestic Product. The week ends Friday with the release of the German Retail Sales and Eurozone Consumer Price Index; both can have a big impact if the actual numbers differ substantially from the analysts’ forecast.


GBP/USD

Despite strong British Retail Sales numbers, the Pound lost ground against the US Dollar last week, after another attempt to break 1.5500 resistance. The week was clearly bearish and it offered important clues about future direction.


Technical Outlook

The resistance at 1.5500 generated a heavy bounce lower and by doing so, it also showed the importance of this level for future price action. The pair is still trading above the bullish trend line seen on the chart but the level at 1.5330 has been breached and the momentum is bearish so we expect a move below this diagonal support. If this scenario comes true, the next area of interest is 1.5200 – 1.5170 but on the other hand, a bounce at the trend line will probably generate another encounter with 1.5500.

Fundamental Outlook

Only one major event will influence the Pound this week: the British Preliminary Gross Domestic Product. This is the main gauge of an economy’s overall performance and the Preliminary version is the most important out of the three (Preliminary, Second Estimate and Final). The release is scheduled Tuesday and higher values normally strengthen the Pound; of course, the U.S. events will have a direct impact on the pair, as always.
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Old 02-11-2015, 11:50
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: ALL EYES ON U.S. NON-FARM PAYROLLS. JOBS TIGHTLY CORRELATED WITH END-OF-YEAR RATE HIKE



EUR/USD

Weekly Analysis: Last week the US Dollar strengthened on speculation that a December rate hike is still on the table but most of the gains were erased Friday and the pair moved above resistance.


Technical Outlook

Although price retraced higher, the downside still prevails and a clear sign is the rejection seen Friday when the bulls pushed above 1.1000 but then failed to close the week above the level. During the first days of this week we are likely to see a struggle for control around 1.1000, with the result influencing the rest of the week. If the bears regain control, we are likely to see a move into the support at 1.0820 and otherwise, we expect a break of 1.1100

Fundamental Outlook

The first important release of the week is the U.S. Manufacturing PMI which is scheduled Monday and acts as a leading indicator of economic health with focus on the manufacturing sector. Tuesday ECB President Mario Draghi will speak in Frankfurt and Wednesday we take a first look at U.S. employment with the release of the ADP Non-Farm Employment Change. The same day Fed Chair Janet Yellen will testify on bank regulation before the House Financial Services Committee.

The last and probably most important event of the week is the release of the U.S. Non-Farm Payrolls, scheduled Friday. This is always a huge market mover but more so now, because at their latest meeting the Fed mentioned that a rate hike is tightly correlated with jobs and inflation. Look for strong movement and use caution at the time of the release.


GBP/USD

The Pound showed surprising strength during the last trading day of last week and managed to reverse the previous bearish momentum, moving the pair above several resistance areas.


Technical Outlook

Although the pair broke a bullish trend line early last week, the downside momentum proved short lived and price returned above the trend line as well as above 1.5330 and the 50 period Exponential Moving Average. This makes 1.5500 the first destination but recently we saw this level reject price several times so it will provide strong resistance once touched. We expect a bearish bounce at the mentioned level but on the other hand, a break would show the bulls have enough strength to retake overall control.

Fundamental Outlook

The week ahead is busier for the Pound than usual: Monday, Tuesday and Wednesday the Manufacturing PMI, Construction PMI and Services PMI come out respectively, but the most important day is Thursday when the BOE will announce their decision on the interest rate. A monetary Policy Summary is released at the same time, together with a breakdown of the votes and the Inflation Report which will offer BOE’s projections on inflation and economic growth for the next 2 years. Soon after, BOE Governor Mark Carney will hold a press conference, discussing the Inflation Report.

Friday morning the British Manufacturing Production numbers come out and later in the day, NIESR will release a British GDP Estimate. As always, the U.S. announcements made throughout the week (especially the NFP) will have a direct impact on the pair.
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  #73  
Old 10-11-2015, 00:11
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: U.S. RATE HIKE SPECULATION FUELS ANOTHER BEARISH WEEK



EUR/USD

Weekly Analysis: For the entire last week the bears maintained their control over the pair, capitalizing on a much better than expected NFP value. The probability of the Fed raising rates in December has increased substantially and this will probably contribute to further downside movement.


Technical Outlook

The support at 1.0820 was broken last week and this represents a major turning point for medium term direction. The next destination is most likely 1.0500 but before it can be reached, price needs to retrace higher in order to clear the oversold condition of the oscillators and possibly to re-test 1.0820 from below, confirming it as resistance. The overall bias is negative so expect continued downside movement, with 1.0660 as minor support.

Fundamental Outlook

The first two days of the week are relatively light in terms of news announcements, with the only important events being the Eurogroup Meetings (Monday) and the ECOFIN Meetings (Tuesday). Wednesday U.S. banks will be closed in observance of Veterans Day so it’s possible to see irregular volatility during the New York session. The same day, at ECB President Mario Draghi will speak at the Bank of England Open Forum; caution is recommended because his speeches always have the potential to strongly impact the single currency.

Thursday is again a slow day but Friday the action picks up with the release of the German Preliminary Gross Domestic Product, the U.S. Retail Sales and the University of Michigan Consumer Sentiment survey. All three are considered high-impact releases so the pair’s direction will probably be heavily influenced by the results.


GBP/USD

The pair suffered last week from a disappointing Inflation Report as the BOE lowered their economic growth and inflation expectations. The NFP release strengthened the greenback so the pair finished the week considerably lower.


Technical Outlook

We expect the downside price action to continue now that the zone around 1.5170 – 1.5200 is broken and the balance is clearly tilted in favor of the bears. However, such a drop is usually followed by a counter move, thus early during this week we anticipate a move higher, which should be treated like a retracement, not a reversal. The oscillators are not oversold but the pair has traveled a long distance in a short while, which makes a move up more probable.

Fundamental Outlook

The most important event of the week for the Pound is the release of the Claimant Count Change scheduled Wednesday. The indicator tracks changes in the number of total people who applied for unemployment related aid and usually affects the Pound strongly, with higher numbers being detrimental. The same day BOE Governor Mark Carney will hold a press conference with the main topic being the Inflation Report. This is another possible reason for high volatility so caution is recommended. The rest of the week lacks major economic announcements for the Pound.
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  #74  
Old 16-11-2015, 14:12
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: ALL EYES ON U.S. INFLATION. FED RATE HIKE STILL ON THE TABLE



EUR/USD

Weekly Analysis: The pair had a choppy week and most of the moves in one direction were quickly reversed. The speeches of European and U.S. key bankers added more confusion and overall the market reversed all directional moves.


Technical Outlook

The resistance at 1.0820 proved strong last week and rejected price lower so we may see downwards price action but it is important to note that the candles corresponding to the last four days have long wicks in their lower side. This is a sign of bullish pressure and on top of that, the Stochastic is oversold for a relatively long time; also the Relative Strength Index is just exiting oversold territory. These signs suggest that bullish price action will soon follow, with the first barrier being 1.0820; to the downside support is still located at 1.0660, followed by 1.0500.

Fundamental Outlook

Monday the Final version of the European Consumer Price Index (CPI) is released, showing fluctuations in inflation across the Eurozone and the same day, ECB President Mario Draghi will deliver a speech in Madrid. Tuesday the German ZEW Economic Sentiment survey comes out but the highlight of the day will be the release of the U.S. CPI and CORE version of the same indicator. Since the Fed made it clear that inflation is crucial in their decision regarding the interest rate, the release will probably have a stronger impact than usual, with higher numbers strengthening the US Dollar.

Wednesday’s main event is the release of the FOMC Meeting Minutes which will offer insights into the Fed’s latest meeting and into the reasons that made them keep the interest rate unchanged. Thursday the greenback will be affected by the Philly Fed Manufacturing Index and the European calendar is light, but the trading week ends Friday with another speech of the ECB President Draghi, this time in Frankfurt, at the Euro Finance week. As always, these speeches should be treated with caution because strong and often irregular movement can occur.


GBP/USD

The Pound started last week strong but bullish momentum faded towards the end of the week; however, the pair is now trading above previous resistance and the bears have lost short term control.


Technical Outlook

The pair is still moving below the 50 days Exponential Moving Average and the last two candles have wicks in their upper and lower parts which suggests indecision but also that bulls are starting to fade away. On the other hand, the oscillators are starting to move up so we may see further upside action which can take price into the 50 EMA where a bounce lower is likely to occur.

Fundamental Outlook

Two very important announcements will affect the Pound this week: Tuesday the British Consumer Price Index is released, offering a status of inflation in the United Kingdom and Thursday the Retail Sales come out. Considering that sales made at retail levels account for a major part of overall economic activity, higher numbers usually strengthen the Pound. Throughout the week the pair will be affected by the U.S.
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  #75  
Old 23-11-2015, 13:35
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: THANKSGIVING WEEK – IRREGULAR VOLATILITY, CHOPPY MOVEMENT POSSIBLE



EUR/USD

Weekly Analysis: The pair just completed another bearish week, with price closing lower than it started; however the question whether the Fed will or will not raise rates this year still creates a lot of speculation and back and forth movement.


Technical Outlook

After a brief retracement to the upside, the bears made another attempt to break 1.0660 support and they’ve managed to close the week below it. It seems the US Dollar has regained control but we have to pay attention to the Stochastic and the Relative Strength Index because both have spent a lot of time near their respective oversold levels and this is a warning sign that a retracement higher will soon follow. We may see another drop before a pullback but be careful with shorts this week.

Fundamental Outlook

The week ahead is slow in terms of economic announcements, with the first event being the release of the French and German Manufacturing PMIs, Monday morning. Tuesday the German IFO Business Climate survey comes out but the more important release is the Preliminary version of the U.S. Gross Domestic Product, which as we know is the most important gauge of overall economic performance. Later in the day a U.S. Consumer Confidence survey comes out but the impact is often low if the actual figure matches analysts’ forecast.

Wednesday’s most important event is the release of the U.S. Durable Goods Orders (goods with a life expectancy of at least 3 years) and Thursday the United States celebrate Thanksgiving Day so banks will be closed and volatility might be irregular. This effect is likely to extend through Friday when no major indicators are released by either the U.S. or Europe.


GBP/USD

The Pound was weakened by disappointing data released last week and erased all gains accumulated previously, but support was not broken.


Technical Outlook

The latest impulse is bearish and strong rejection was seen at 1.5330. This move confirmed that 1.5330 is good resistance and opened the door for a break of 1.5200 – 1.5170 support zone. A break would mean a major victory for the bears because this support is key for medium term direction so we anticipate further downside price action once 1.5170 is clearly broken. After that, the first target is 1.5030 where we expect a bullish bounce. As an alternate scenario, a break of 1.5330 will make 1.5500 the first target.

Fundamental Outlook

The United Kingdom will only release one major economic indicator this week: the Second Estimate Gross Domestic Product, scheduled Friday. The rest of the week only low impact indicators are released, so we expect a period when the US Events and the technical aspect will dictate direction.
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Old 30-11-2015, 12:55
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: PREPARING FOR A WILD WEEK: ECB RATE ANNOUNCEMENT, HUGE U.S. NON-FARM PAYROLLS RELEASE



EUR/USD

Weekly Analysis: Last week’s price action was affected by Thanksgiving Holiday and price action was choppy, volatility was irregular but with a downwards bias.


Technical Outlook

The main levels to watch this week are 1.0660 as resistance and the zone around 1.0500 as support. Price will most likely touch both of them as the week is full of major data releases but from a strictly technical point of view, we expect retracements to the upside. This is based on the fact that the Daily candles are showing long wicks (both upper and lower), which is a sign of indecision and the oscillators are long time oversold. The bearish momentum is starting to fade but keep in mind that we are still in a medium term downtrend.

Fundamental Outlook

The week opens with Monday with the German Retail Sales, followed by the German Preliminary Consumer Price Index, both very important events for the single currency, mainly because the German economy plays a major role in the overall health of the Eurozone. Tuesday the United States will release Manufacturing data in the form of the Purchasing Managers’ Index and Wednesday we take an early look into U.S. employment with the release of the ADP Non-Farm Employment Change. Later the same day, Fed Chair Yellen will talk about the economic outlook at The Economic Club, in Washington.

Thursday is the most important day of the week for the euro as the ECB announces the interest rate (not expected to change from the current 0.05%) and later ECB President Mario Draghi will deliver a speech at the usual Press Conference that accompanies the rate announcement. Journalists will ask questions and as always, this is a time when the euro can behave erratically so we recommend caution until the conference is over. Later in the day, Fed Chair Yellen will testify before the Joint Economic Committee, with the topic being monetary policy so we expect a day with strong movement.

Probably the most important data of the week is released Friday in the form of the Non-Farm Payrolls which is considered the most important jobs related indicator for the United States. It shows how many new jobs were created in the previous month with higher numbers suggesting a thriving economy and contributing to a rate hike this year.


GBP/USD

The pound-dollar pair moved lower for almost the entire last week on the back of comments made by BOE Governor Mark Carney that rates will remain low in the near future. Talks about increased chances of a Fed rate hike also contributed to the fall.


Technical Outlook

The pair moved below the key support zone between 1.5200 – 1.5170 and stopped right on the level at 1.5030. We expect the down move to make its way into the area around 1.4970 where it will probably pause or retrace higher. Movement throughout this week will be determined by the data released and the technical side will be secondary, with the main levels to watch being 1.5170 as resistance and 1.4970 as support.

Fundamental Outlook

Tuesday Bank of England’s Governor Mark Carney will testify on the Inflation Report and on the Bank Stress Test results released earlier the same day; the impact on the Pound depends a lot on the results of the stress test and of course on the attitude of the Governor. The same day the Manufacturing PMI comes out, offering insights into the health of the British Manufacturing sector. The rest of the week is rather slow for the Pound, with the only notable events being the release of the Construction PMI scheduled Wednesday and the Services PMI programmed for Thursday.
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  #77  
Old 07-12-2015, 13:54
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: POSITIVE U.S. JOBS DATA BRINGS A RATE HIKE CLOSER. US DOLLAR STRENGTH LIKELY TO FOLLOW



EUR/USD


Weekle Analysis: Last week we saw huge euro strength at the time of the ECB Press Conference. The pair soared, erasing the losses incurred over several previous weeks. The NFP report, although better than anticipated, didn’t manage to bring the pair back down.


Technical Outlook


Price pushed through the resistance at 1.0825 and through 50 days Exponential Moving Average, bouncing lower at 1.0980. This level will now act as short term resistance but we are likely to see another push above it. Once the level is broken, the pair will head towards the next target, which is 1.1100. Keep in mind that sometimes after such a huge move, the market moves sideways for a while or even retraces lower; if this occurs, the first barrier is 1.0825.

Fundamental Outlook

After a wild week such as the one that just ended, this week the economic calendar is light and we will probably see less movement. Monday the Eurogroup Meetings take place, followed Tuesday by the ECOFIN Meetings, attended by finance ministers from the Eurozone member states. Wednesday is a slow day for both Europe and the United states, while Thursday the only notable event is the release of the US Unemployment Claims.

Friday action picks up as the U.S. Retail Sales are released, together with the Producer Price Index and followed by the University of Michigan Consumer Sentiment survey which acts as a leading indicator of consumer spending. However the impact is often mild and depends on how big is the difference between actual and forecast.


GBP/USD

The pair dropped earlier during the week, just to climb back up Thursday, giving us a difficult to trade period. The U.S. jobs data didn’t have the anticipated high impact, probably because the pair had already moved strongly earlier in the week.


Technical Outlook

Although the NFP report didn’t create the volatility we are used to, the effects will probably extend to this week and we will see US Dollar strength. Price stopped at 1.5160 but this could be just because the week ended, not because a move lower is next, so the first day of the week will be important for short term price action. If the pair can climb above 1.5160 and turn this level into support, we will likely see further upside movement, possibly into 1.5330 resistance; of course, for that to happen, the 50 days Exponential Moving Average must be broken first. From a medium term perspective, we don’t have a higher high so the downtrend is intact.

Fundamental Outlook

Monday BOE Governor Mark Carney will testify before the Committee on Economic and Monetary Affairs of the European Parliament and Tuesday the Manufacturing Production numbers come out, showing the change in the total output generated by the manufacturing sector. Later in the day, NIESR will release an Estimate of the British Gross Domestic Product; this estimate is usually pretty accurate so we are likely to see some volatility at the time of the release.

Another important day of the week is Thursday, when the Bank of England will announce the interest rate and members’ votes. The rate is not expected to change but a statement will be released, outlining the reasons behind the decision and this document can contain clues about future rate changes, thus creating volatility.
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  #78  
Old 21-12-2015, 14:10
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: HOW WILL CHRISTMAS WEEK AFFECT THE US DOLLAR?



EUR/USD

Weekly Analysis: Last week the most anticipated Fed meeting of the year took place and we witnessed a rate hike to <0.50% from the previous <0.25%. The change did not have the immediate effect which most market participants expected but US Dollar strength is probably going to extend to the near future.


Technical Outlook

Price action throughout the week will be affected by the Christmas Holidays and we are likely to get irregular movement so we recommend caution throughout the week. The pair is currently testing the support zone created around 1.0825 and we expect small bounces to the upside before the level can be broken. However, note the position of the Daily stochastic which is just exiting overbought, a fact which favors extended moves to the downside; Fed’s decision to raise the rate will probably contribute to a stronger move south as well.

Fundamental Outlook

The week ahead will be influenced by Christmas and economic news are scarce. Monday no major events are scheduled and Tuesday the Final version of the U.S. Gross Domestic Product comes out, alongside the Existing Home Sales. Wednesday we have the U.S. Durable Goods Orders and the New Home Sales, while Thursday is Christmas Eve and the only notable indicator is the U.S. Unemployment Claims. However, the effect of this release is hard to anticipate due to the low liquidity which will most likely be present.

Friday is Christmas Day thus most banks and brokerages all over the world will be closed so price action will be irregular and without clear direction.


GBP/USD


The US Dollar performed better against the Pound than it did against the Euro and we saw strong movement south despite better than anticipated economic data released by the United Kingdom last week.


Technical Outlook

The bears are having difficulties breaking the support zone around 1.4895 but we expect this barrier to fall and price to head into 1.4600. However, this distance is not likely to be traveled this week. The first target after a potential break of 1.4895 will become 1.4830 (better seen as support on a Weekly chart), but as mentioned earlier, price action during the entire week will be affected by the Christmas Holidays, thus we recommend extra caution.

Fundamental Outlook


The British Current Account is released Wednesday, showing the difference between the value of imported and exported goods. A higher than expected number is beneficial for the Pound but the effect is often mild and probably more so this time because we are getting close to Christmas. The same day, United Kingdom’s Final Gross Domestic Product is released; this is the main gauge of overall economic performance but the Final version usually has the lowest impact. Friday British Banks will be closed, celebrating Christmas Day.
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Old 28-12-2015, 14:07
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: THE YEAR COMES TO AN END, THE MARKET REACTS WITH IRREGULAR MOVEMENT


EUR/USD

Weekly Analysis: Last week was bullish overall but price movement was affected by Christmas Eve and Christmas Day when most banks were closed. Prior to that, resistance was touched but not broken.


Technical Outlook

The pair touched 1.0980 resistance but failed to break it and this was mostly because liquidity was thin during the past week. However, the bounce lower at resistance also shows that the bulls lack the strength needed to continue the latest impulse and makes us believe that a move lower is next. The first target for this potential move down is located at 1.0825, followed by 1.0800 but New Year’s Eve and New Year’s Day will play a big role by slowing down the market and creating low liquidity. We expect price to remain inside the range created by 1.1040 and 1.0825.

Fundamental Outlook

The week ahead will be still affected by the low liquidity and irregular movement characteristic for the Winter Holidays, but here are the main things to keep an eye on: Tuesday a U.S. Consumer Confidence survey is released, showing the opinions of about 5,000 households regarding overall economic conditions and Wednesday the Pending Home Sales come out, giving us insights into the U.S. housing market.

Thursday German Banks will be closed in observance of New Year’s Eve and on the US Dollar side the only notable indicator is the Unemployment Claims but usually this release does not create strong impact. Friday most banks across the globe will be closed, celebrating New Year’s Day so the market will be practically still, with almost no movement.


GBP/USD

The US Dollar continued to strengthen against the Pound early last week but the gains were erased in the second part of the period and the pair ended up almost where it started.


Technical Outlook

The bounce at 1.4830 support suggests that the reign of the bears is coming to an end and that we are likely to see an extended retracement to the upside. If this comes true, the first minor resistance is located at 1.4970, followed by the psychological resistance at 1.5000. The level at 1.4895 is in close vicinity but its role is not clear; the Stochastic is curving upwards, coming from oversold and thus supporting a bullish move. The Relative Strength Index is bouncing on its 70 level, showing some bullish divergence, and this further favors a move north but the passing of the year will surely affect price action.

Fundamental Outlook


The United Kingdom didn’t schedule any major releases for the week ahead and on top of that, Monday and Friday UK banks are closed, celebrating Boxing Day and New Year’s Day respectively. Throughout the entire week ahead we expect slow, choppy and potentially irregular movement but this is a well-known characteristic of the last week of the year.
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Old 04-01-2016, 13:17
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Default Re: Weekly Commentary | Gdmfx | Technical

WEEKLY ANALYSIS: U.S. NON-FARM PAYROLLS KICK OFF THE TRADING YEAR WITH A BANG


EUR/USD


Weekly Analysis: Last week the pair bounced at resistance and traveled lower on the back of thin volatility. Overall, price movement was affected by the changing of the year so the real market direction will be probably revealed this week.


Technical Outlook

The bounce at 1.0980 shows that the bulls are starting to fade away and the bears are taking over. For that to happen, the support zone between 1.0825 – 1.0800 must be broken and re-tested from below (support must turn into resistance). If this is the case, then we will probably see a move into the zone around 1.0660 once normal liquidity is restored. A rejection at 1.0825 – 1.0800 would suggest that price is headed for 1.0980 – 1.1000 zone once again.

Fundamental Outlook

The week starts Monday with the release of the German Preliminary CPI which as we know is the main gauge of inflation and later in the day the U.S. Manufacturing PMI comes out. This is a survey of purchasing managers regarding the health of the manufacturing sector and can bring US Dollar strength if it posts a better than expected value.

Tuesday the Eurozone CPI is announced but its impact will be somewhat lowered by the earlier release of the German CPI; nonetheless, an increase would be beneficial for the single currency. Wednesday we get a first look into the U.S. jobs market with the release of the ADP Non-Farm Employment Change and later in the day the Fed will release their FOMC Meeting Minutes that will contain insights into the reasons why the interest rate was raised in December.

Thursday is a light day but Friday will probably be the most important day of the week because the Non-Farm Payrolls are made public, showing how many new jobs were created during the previous month. As always, this is a very important indicator and its impact is potentially huge so caution should be used; a higher than expected number suggests a thriving economy and thus a stronger dollar.


GBP/USD

The Pound weakened substantially against the US Dollar during the last week of 2015, allowing the pair to travel almost 200 pips lower and to break support decisively.


Technical Outlook

The current move is likely to extend into the support located at 1.4700 but once this barrier is touched, we expect a bounce higher, possibly into 1.4800. The Stochastic is oversold and curving upwards, supporting such a bounce and the Relative Strength Index is showing bullish divergence (price is making lower lows while the oscillator is just bouncing on the 30 level). These technical factors favor a move up but a lot will depend on the British data released throughout the week and of course, the U.S. jobs report will play a major role for price direction.

Fundamental Outlook

Three important surveys will be this week’s headlines: Monday the Manufacturing PMI comes out, followed Tuesday by the Construction PMI and Wednesday by the Services PMI. All these are leading indicators of economic health for their respective sectors and higher numbers than forecast usually strengthen the Pound. The U.S. events mentioned earlier will have a direct and strong impact on the pair’s movement throughout the week.
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