Hot Forex - Market Analysis and News.

[HFM.]

Date : 3rd June 2015.

CURRENCY MOVERS OF 3rd JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 3rd June 2015. (Second Analysis)

GBPUSD TRADING LOWER AFTER YESTERDAY’S BUY SIGNAL.

GBPUSD, Weekly

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

GBPUSD, Daily

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

GBPUSD, 240 min

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

GBPUSD, 240 min

Conclusion

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

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 4th June 2015.

CURRENCY MOVERS OF 4th JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 4th June 2015. (Second Analysis)

GBPAUD Trading At Resistance.

GBPAUD, Weekly

Sterling has been trending higher against Australian dollar since August last year. In February GBPAUD hit a historical resistance at 1.9697 and it has taken the pair close to four months to move back above this resistance level. AUDGBP is now trading at Bollinger bands while Stochastics are overbought. There is a small cluster of Fibonacci extension levels just above the Bollinger bands between 2.0160 and 2.0313 and a historical resistance at 2.0991. Momentum has slowed down but the trend is still up.

GBPAUD, Daily

A week ago GBPAUD hit a resistance at February high at 2.0029. This caused the price to break out from a bearish wedge. Since then the pair has found support at 23.6% Fibonacci level at 1.9656 and rallied back to levels it dropped from. This looks like a classic return move that should be followed by a move lower. The nearest potential support level is in the region of 1.9408 to 1.94823 where 38.2% Fibonacci retracement, lower Bollinger bands and 50 SMA coincide. The next support area is between 61.8% and 50% Fibonacci levels while the nearest daily resistance is at 2.0057.

GBPAUD, 240 min

GBPAUD has moved inside the sideways range it formed last week. The pair is approaching the upper Bollinger bands but apart from Stochastics being overbought and slightly tilting to the right there are no signs of momentum slowdown yet in this timeframe as the latest bar closed near its high and the current bar is pushing into 1.5 stdv Bollinger Band. Even though price is close to very potential resistance levels I would like to see some price based evidence that the buyers have exhausted their resources before committing to the short side. The nearest 4h support is at a Fibonacci cluster above 1.9600. Nearest 4h resistance levels above 1.9907 are at 1.9998 and 2.0042.

Conclusion

Even though there has been some momentum slowdown the weekly trend is still higher. The historical resistance at 2.0991 is a logical target price in the weekly time frame. The daily timeframe has some weakness (price has broken out of a bearish wedge) and this suggests that the above resistance could still prove to be a problem for the bulls. If market corrects from this resistance it could however be a short term move as support is not that far and the weekly trend is pretty firmly to the upside. Look for support between 1.9600 and 1.9700 with a long term target at 2.0870 and medium term target at 2.0270. Short term and intraday traders could consider 2.0000 as a target.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 5th June 2015.

CURRENCY MOVERS OF 5th JUNE 2015.

EURUSD, Daily

EURUSD closed at session lows in relatively thin trade yesterday and is after some recovery currently trading at 1.1268. Greece’s request to defer IMF payments to the end of the month will apparently be approved, and will give Greece some breathing room, as a euro 300 mln payment was originally due on Friday. How Greece will make the payments at the end of the month is anyone’s guess. The FX market surely must be thinking there will be no end to the crisis, and perhaps some smart money is reducing exposure to the single currency.

Eurozone Retail PMI surged higher yesterday. The overall retail PMI for the Eurozone passed the 50 point no change mark in May and rose to 51.4 from 49.5 in the previous month. This was driven mainly by a jump in the German reading to a whopping 55.8 from 52.6 in April. The French reading also improved, but remained below the 50 point mark, as did the Italian reading, which actually dropped slightly. The strong German number confirms that the recovery remains driven largely by consumption and domestic demand, unlike previous recoveries and the question is whether this is sustainable, or like the pre-crisis booms in Spain, Italy and elsewhere mainly fuelled by cheap money.

The US initial jobless claims fell 8k to 276k in the week ended May 30, from a revised 284k in the prior week (was 282k). The 4-week moving average edged up to 274.75k from 272.0k (revised from 271.5k). Continuing claims dropped 30k to 2,196k in the May 23 week, from 2,226k previously (revised from 2,222k). Also, US Q1 productivity was revised down to a -3.1% pace from the -1.9% preliminary print, and versus -2.1% in Q4. The back-to-back declines are the largest since 1993.

I wrote yesterday that EURUSD was trading close to a major resistance and that the upside was getting limited which increases the downside risk. This resulted in EURUSD failing to hold the highs after rallying from the intraday support I mentioned. It also resulted in a daily shooting star candle that confirmed the bearish view in the daily timeframe. At the time of writing the pair is approaching an intraday resistance area around 1.1285. Based on the intraday technical picture it seems that EURUSD is not likely to rise much higher but will react lower and remain weak and eventually it should move to the daily support at 1.1006. This being a Nonfarm Friday markets are prone to avoid strong directional movements before the employment number is out. Also the region of May 22 daily high provides some support EURUSD which is why I don’t expect the pair to move to 1.1006 support today. However, the daily shooting star indicates that this is likely to happen before EURUSD can move higher. A medium term regression channel bottom coincides with the 1.1006 support which suggests that the pair will retain its medium term upward tendency. Daily support and resistance levels are: 1.1208, 1.1006, 1.0887 and 1.1324, 1.1380 and 1.1467.

Currency Pairs, Grouped Performance (% Change)

GBP is weak across the board this morning. GBPAUD turned lower from the resistance yesterday as was expected (see my analysis from yesterday) and GBPUSD rallied yesterday almost to 1.5447 level I identified in my earlier analysis. EUR has wide strength against the other major currencies this morning with EUR moving most against GBP and JPY. EURJPY is moving outside both weekly and daily Bollinger Bands and yesterday’s shooting star raises concerns of the level of commitment by the bulls on this market. The pair is trading near yesterday’s daily highs but as there is no major weekly resistance nearby I would not be interested in selling against the highs. I suggested in my earlier analysis that EURGBP is in a process of creating a market bottom. The recent volatility and the fact that this market has found attracted buyers at major support levels indicates that my view was correct. This has brought the EURGBP near a daily resistance level and it is trading in the Bollinger Bands.

Main Macro Events Today

Eurozone Gross Domestic Product second release for Q1 GDP is due out today but no change in number is expected. In May Q1 data was in line with expectations, with the quarterly growth rate accelerating slightly to 0.4% q/q from 0.3% q/q, in line with our forecast and a tad below our median of 0.5%. There is no breakdown with the preliminary number, but domestic demand was likely the main driver and the national data suggests that growth is broadening and stabilising, despite the deceleration in German growth at the start of the year.

US Nonfarm Payrolls and Unemployment rate: Nonfarm payrolls are expected to increase by 215k, with a 223k private payroll gain. Forecast risk: upward, as depressed claims readings should provide some tail wind. Market risk: downward, as substantial weakness could impact the timing of rate hikes. The unemployment rate is expected to hold steady at 5.4% from April.

Canadian Unemployment Rate: Employment is expected to rebound 20.0k in May after the 19.7k drop in April. Forecast Risk: The dismal 19.7k drop in total jobs during April contrasted with mostly solid details, which we expect to give way to an improvement in overall employment during May. But business confidence remains subdued, suggesting a risk for a May job gain that undershoots our estimates. Market Risk: An as-expected rise in May would not argue against the expected timing and magnitude the Bank sees for the gyrations in Q1 and Q2 GDP, in turn supportive of expectations that the 0.75% policy rate is the floor.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 8th June 2015.

GOLD EDGING CLOSER TO A SUPPORT.

Gold, Weekly

Ever since the US dollar started move strongly higher last year most analysts have predicted Gold would considerably lower in USD terms. This however has not taken place and the price of Gold has been moving sideways since November last year. This has been a clear sign of relative strength and suggests that there have been underlying demand factors supporting this market. However, price action in Gold since the US Dollar index (DXY) started topping has not supported the Relative Strength idea. A market that has true relative strength bounces sharply higher when factors constraining its move higher are removed. As soon DXY started to move lower the price of Gold should have rallied strongly and moved beyond the resistances at 1250 and 1300. Instead Gold rallied only 7.3% from March low to May high and is currently trading only 2.17% above the March low. The more dovish stance taken by the Fed Chief Yellen has not been to move the price of Gold higher and suggests that market participants still believe the Fed is not too far from starting tightening on its interest rate policy. Historically the price of Gold not performed brilliantly during the seasons of DXY strength. Another important reason for investors being careful with this market is that the huge rally between 2001 and 2011 that multiplied the value of yellow metal by a factor of 7.5 and sent it to extreme levels that weren’t sustainable. It is common that a market that experiences an extreme rally will correct strongly and be out of favour for a period of time. This has for instance happened with tech stocks (Nasdaq) and Hong Kong listed Chinese stocks (Hang Seng ).

The last time there was a similar rally in the price of Gold was in the 1970s. In August 1976 Gold made a low of 101.50 and in a space of four years rallied approximately almost nine times higher. The recent rally was almost as extreme in terms of price multiples but it happened over a longer period of time. The rally started in 2001 and lasted till 2011. After peaking in 1980 the price of Gold lost almost 75% over the next 18 months. Therefore the 38% correction over the 18 months following the 2011 peak suggests that market participants can better stomach volatility that takes place over a longer time period and that this time around there has been more safe haven buying.

Over the last three weeks Gold has corrected to 1168 support after being rejected from 1224.50 resistance level and 50 week moving average. The lower Bollinger Bands are not too far and the Stochastics Oscillator is getting oversold. The price of Gold has now reached an area where reversals have happened in the past. This suggests that the downside is getting limited. The nearest support and resistance levels are at 1168 and 1224.50.

Gold, Daily

Gold is now trading between a daily resistance at 1179.90 and 1168.40 after penetrating the support on intraday basis on Friday. The 23.6% Fibonacci level coincides with the 1179.90 resistance. This suggests further weakness before price can turn around and is in line with the current down trend that has been in force since the May high. I look Gold to consolidate and turn between Friday’s low of 1162.60 and March low of 1141.70.

Conclusion

Despite weakness of the US dollar the price of Gold has failed to rally above 1224 resistance level. The lack of conclusive rallies from over the last two months is not a sign of strength for the long term. This increases the risk of Gold violating the major support at 1131.50. Price is still in a longer term downtrend while the recent sideways move has been an attempt to build a base from which to bounce higher. The recent failure to rally above 1224.50 is a red light that longer term investors need to pay attention to. I am still expecting Gold to turn higher from or near the 1141.60. If price starts to stall after a small rally and cannot close above 1168 it is an indication to decrease long term Gold positions significantly.

The short term picture (daily and 4h) is suggesting that price not far from levels it could stage a rally from. However, there are resistance levels above current price which should lead to a down move that would take the price of Gold to levels below Friday’s low. I am expecting it to attract buyers above 1141.70 and attempt a turn around.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 9th June 2015.

CURRENCY MOVERS OF 9th JUNE 2015.

EURUSD, Daily

EURUSD moved to a five day high (on a closing basis) at 1.1345 this morning bringing last Thursday’s peak at 1.1379 back into scope, with the May-15 peak at 1.1466 just behind. A run of encouraging data, and perky May inflation data, out of the Eurozone has enabled to the euro to hold ground against the dollar, despite the rekindled Fed tightening narrative following the strong May US payrolls report. The forex market is also taking a sanguine view of Greece’s continuing standoff with its creditors at bailout negotiations. There were fresh reports that the European Commission is trying to look into ways to get Greece some alternative funding that doesn’t require a positive bailout review, but even Juncker is increasingly exasperated with Greece’s hostility towards creditors and their offers. As Greece will have to negotiate further funding beyond the remaining monies from the current bailout, the hard line stance taken by Tsipras and Co is a gamble with Greece obviously banking on the fact that foreign ministers and heads of state, as well as the G7 will eventually value Greece’s strategic position in the south-east of Europe and its importance as a Nato partner more than the fact that continuing Eurozone membership will cost taxpayers elsewhere in the Eurozone dearly, and that without solving the country’s underlying problems.

According to ECB’s Liikanen QE could be extended, beyond September 2016 if needed. We have heard this before, but in the current climate it may go some way to dampen the rise in yields although the official commitment to bond buying it counterbalanced somewhat by the central bank’s very relaxed attitude to the rise in long term yields. Bund futures, which fell into negative territory, are slightly up again on the day, but off opening highs.

EURUSD moved on Friday pretty well according to my script. I said in Friday’s report that the pair was approaching an intraday resistance at 1.1285 and that EURUSD is not likely to rise much higher but will react lower and remain weak. I also said that I don’t expect the pair to move to 1.1006 support today. The pair turned lower from 1.1280, remained weak and moved to the south after NFP figures came out with a big surprise. And price never moved to 1.1006 that day.

Now we’ve seen a rally back into the same resistance area that turned the pair lower Thursday last week. The picture is less clear than on Friday as price has reacted lower from the resistance but has since found buyers at the same region that resisted moves higher on Friday. If prices keeps on making lower timeframe higher lows over the next two to three hours it is likely that buyers try to challenges the daily resistance levels again. Should this fail and price move lower from here the next intraday support would be at 1.1178 after which there are no clear support levels before intraday support before 1.1133. The pivotal daily low from Friday is at 1.1050. This range could be target for intraday shorts. However, if price create a lower daily high at current levels it is more likely that serious buyers are looking to buy EURUSD long between 1.0887 and 1.1006. Daily support and resistance levels are 1.1049, 1.1006 and 1.1324, 1.1380.

Currency Pairs, Grouped Performance (% Change)

USD, JPY and EUR strength has been the overall theme for this morning but now we are seeing some change with EUR performance getting a bit more mixed and GBP weakening. AUD has been weak while NZDJPY, AUDJPY and GBPJPY have been among the weakest performers in individual pairs while EURAUD and EURNZD have been strong. NZDJPY is still trading sideways at a daily support and lower Bollinger Bands (20) while AUDJPY is edging closer to pivotal daily candles and the lower end of consolidation range. EURAUD is continuing the uptrend that got boosted when Eurozone core CPI was reported well above expectations at 0.9%.

Main Macro Events Today

Chinese CPI and PPI were released today. CPI fell 0.2% in May from April, below the forecast median of 0.0%, rising 1.2% vs a year-ago May compared to a 1.3% median and 1.5% in April. Food CPI rose 1.6% in May vs a year-ago, while non-food CPI grew 1.0%. PPI sank 4.6% vs year-ago levels, below -4.5% median forecasts, but same as April levels. Overall, this still points to price declines, especially on the producer side, amid ongoing signs of overcapacity and economic slowing.

Eurozone GDP: there was no variation in the actual figures from expectations. Eurozone GDP was expected the second reading of Eurozone Q1 GDP to confirm growth rates of 0.4% q/q and 1.0% y/y respectively. This left the focus on the breakdown but without a major revision, however, the numbers are too backward looking to change the overall outlook for growth and monetary policy.

Swiss CPI for May dipped to a new cycle low of -1.2% y/y, meeting the median forecast and down from April’s -1.1%. The sharp drop into deflation in recent months is largely a consequence of the franc’s 15%-plus appreciation in January when the SNB abandoned its cap. This is troubling to Swiss policymakers, though they will be consoled by last week’s appreciation in EUR-CHF to 10-weeks above 1.0500.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 11th June 2015.

CURRENCY MOVERS OF 11th JUNE 2015.

EURUSD, Daily

Germany may be considering a staggered deal on Greek aid. Greece will apparently be required to commit to at least one economic reform to win partial access to bailout funds. German Chancellor Merkel was reportedly quoted as saying “where there is a will there is a way. The goal is to keep Greece in the euro area”. The ECB has agreed to increase the Emergency Lending Assistance to Greek banks by 2.3 billion euros. According to Bloomberg the ECB is trying to strike a balance between keeping Greek lenders afloat and safeguarding the country’s central bank, which provides the aid, as the government veers toward a debt default. This is the biggest weekly increase since February 18th.

Standard & Poor’s downgraded Greek bonds deeper into junk status, questioning whether Athens can pay its debts. Reuters reported that Tsipras emerged early on Thursday from talks with Chancellor Angela Merkel and President Francois Hollande to express confidence. “We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period.”

EURUSD traded most of the day yesterday below the 1.1380 resistance identified in my previous report with the result that yesterday’s candle formed a shooting star. There was a brief rally above the 1.1380 level yesterday with the pair creating a high print of 1.1386 but it wasn’t sustainable and rally failed. Most of the morning EURUSD was trading in a small range between intraday support and resistance levels. Market was truggling with an intraday resistance and created a shooting star in 60 min resolution after which it headed towards yesterday’s low at 1.1260 and at the time of writing is trading below it at 1.1244. In daily context the pair is trading close to a daily and weekly resistance which suggests that in the daily resolution the line of least resistance is down. The nearest significant daily support and resistance levels are at 1.1049 and 1.1380.

Currency Pairs, Grouped Performance (% Change)

This morning AUD and USD have been strong while almost all currencies are up against JPY and NZD. The NZD rate cut keeps the currency weak while USD strength might be just down to the technical picture of euro, the heaviest weighted currency in US Dollar Index. AUDNZD is the best performer this far today with a performance of approx. 0.80% as it continues a daily trend after breaking out of a sideways range yesterday. Other strong movers are USDPJY (found support yesterday) and AUDJPY that is moving higher after the pair reacted higher intraday from a support.

Main Macro Events Today

RBNZ eased rates 25 bps to 3.25%, surprising expectations for a steady stance at 3.50%. This is the first cut since the 50 bp move in March 2011. The most recent policy shift was a 25 bp hike last July. Governor Wheeler said the action was taken to address low inflationary expectations and the weaker demand. And further easing may be necessary, according to the policy statement. The NZD dropped on the news.

U.S. Retail Sales for May are out today and should reveal a 1.4% (median 1.2%) headline with the ex-autos figure up 1.0%. The big auto sales jump to 17.7 mln from 16.5 mln in April will be a major contributor as will the rebound in gasoline prices that we witnessed over the course of the month.

U.S. Business Inventories for April are due today. The headline should have inventories up 0.2% (median 0.2%) with sales up 0.5% for the month. Data in line with this forecast would leave the Inventory to Sales ratio steady at 1.36 from last month. Retail inventories are expected to be up 0.1% in April.

U.S. Initial Jobless Claims Preview: Claims data for the first week of June will be released on Thursday and should reveal a 280k (median 277k) headline, up from 276k last week. We expect claims to set a 279k average in June, down from a 274k average in May.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 12th June 2015.

CURRENCY MOVERS OF 12th JUNE 2015.

EURUSD, Daily

EURUSD remained week yesterday and the pair closed below the shooting star candle from day before amidst positive US data. Yesterday US retail sales was reported to have surged 1.2% in May, with the ex-auto figure up 1.0%, close to expectations. April’s headline unchanged figure was revised up to 0.2%, and the ex-auto number was left at 0.1%. Sales excluding autos, gasoline, and building materials increased 0.6% versus 0.3% previously (revised from 0.1%). Atlanta Fed boosted its Q2 GDP forecast to 1.9%up from 1.1% previously in the wake of the firm May retail sales report, which was propped up by auto sales and gasoline prices. That closed the gap somewhat with Blue Chip economists, who have a median forecast of around 2.65%. US household net worth rose to $84.9 tln in Q1 from a revised $83.3 tln in Q4 (raised from $82.9 bln), according to the Fed, thanks to rising home values and investment gains. Household debt increased at a 2.2% annual pace, down from a revised 2.8% previously (was 2.7%). Increased returns and lower borrowing is a relatively healthy development for the outlook on consumer spending and dovetails with some of the better contemporary readings on the economy.

U.S. business inventories rose 0.4% in April, with sales up 0.6%, both higher than expected. March’s 0.1% rise in inventories was not revised, but the February gain is now 0.3% from 0.2%. The 0.4% sales increase in March was bumped up to 0.6%, with the 0.2% February drop revised to -0.3%. The inventory-sales ratio was steady at 1.36 and is just a shade below the expansionary high of 1.37 in February. The data are good news for Q2 GDP. US initial jobless claims rose 2k to 279k in the week ended June 6, from a revised 277k in the prior week (was 276k). That brought the 4-week moving average to 278.75k from 275k (revised from 274.75k). Continuing claims were up 61k to 2,265k in the week ended May 30, from a revised 2,204k (was 2,196k). US consumer comfort index sank to 40.1 for the period ended June 7, down from 40.5 the week prior and the lowest reading since November, according to Bloomberg. That’s down about 8-points from an 8-year high in mid-April. Rising gasoline prices contributed to the decline, though wage gains and firmer equities supported household sentiment.

IMF doesn’t see progress on Greece. IMF’s Rice said the IMF has major differences with Greece in key areas and doesn’t see a progress on the way to an agreement with obstacles still including pensions, taxes, financing. Markets have been buying into hopes of a deal with Greece today, but that always seemed premature, considering that comments from most officials continue to stress that talks continue, but also that Greece needs to make more commitments and that there are still differences. Even if there is a bailout extension, it would not solve the problem as any payout of funds still hinges on the implementation of reform commitments that Tsipras is unwilling to subscribe to.

Germany prepares for Grexit, according to a German newspaper Handelsblatt. Tabloid paper Bild meanwhile reported that the government is preparing for default with considerations of capital controls and a haircut on Greek debt. So far it was mainly Tsipras who threatened that a Grexit would mean the beginning of the end for the Eurozone, but after the IMF finally lost patience with the lack of progress in the talks with Greece, the reports suggest that Germany is also not willing to keep Greece in at all costs. A Bloomberg story meanwhile said creditors will give Greece less than 24 hours to come up with a serious counter-proposal to its own reform list. There may not be any real progress, but it seems the beginning of the end to the Greek crisis is finally here, even if it could still go one way or the other.

Today’s data calendar being quite thin EURUSD might not move that much today. Over the next couple of days I think that bias is still to the downside due to the shooting star candle from two days ago. Today’s price action has taken place below Wednesday’s low and yesterday’s low was also below Wednesday’s shooting star low, which is inline with the expectation that EURUSD is likely to remain weak and retest the support 1.1006 to 1.1049 region. The nearest significant daily support and resistance levels are at 1.1049 and 1.1380 while the low from Wednesday has clearly been a resistance today.

Currency Pairs, Grouped Performance (% Change)

Today’s currency mover is AUD which is down by roughly 30 to 40 basis points against everything else but NZD that is weak after the RBNZ cut the rates yesterday in a surprise move. AUDCHF is reacting lower after rallying to a pivotal resistance. The pair is making lower lows and lower highs in a daily chart. GBPAUD has been moving sideways and still trying to push higher through the resistance. EURAUD moved lower yesterday after creating two no-demand candles. AUD weakness is the only clear theme this morning as other currencies’ performance has remained mixed.

Main Macro Events Today

German Wholesale Price Index numbers improved both on m/m and y/y basis. Monthly change in May came in at 0.5% compared to 0.4% in April while the yearly change improved from -0.9% to -0.4%.

US Producer Price Index data for May is out today and should reveal a 0.8% (median 0.4%) headline with the core up 0.1%. After a long run of drops driven by falling oil prices we have now begun to see rebounds which should help lift the PPI headline. The trade price data for May began to reveal this effect with a 1.3% import price increase following a steady string of declines through the winter.

US Michigan Consumer Sentiment: The first release on June Michigan Sentiment is due today and should reveal a decline to 90.0 (median 91.5) from 90.7 in May. The IBD/TIPP poll for the month eased to 48.1 from 49.7 in May. Confidence measures have eased over the Spring as gasoline prices begin to rebound off lows and consumers become accustomed to their new level.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 15th June 2015.

PALLADIUM TRADING AT LOWER WEEKLY BOLLINGER BANDS.

Palladium, Weekly

Palladium has been trading sideways in a wide range since October last year. In the process market has created a lower weekly high and has now moved close to support levels. This suggests that in there is weakness in the long term picture but it doesn’t mean there can’t be short term rallies. Stochastics oscillator is now oversold and price is trading at lower Bollinger bands. This highlights the fact that price trading fairly close to important higher time frame support. Nearest support level is at 723.00 while the 23.6% Fibonacci resistance level at 767 practically coincides with a resistance created by a weekly pivot low 772.10. The fact that this region coincides with a 38.2% Fibonacci level when drawn from the year 2011 low the 2014 high increases its significance as a resistance level.

Palladium, Daily

The daily down trend that has been in force since the beginning of this month has taken Palladium inside a daily pivot near the weekly support level . This has caused the downside momentum to wane a bit and lifted Stochastics oscillator slightly higher. Nearest daily support level at 723 is the same as in the weekly chart. There is some resistance right above the current prices from the sideways moved seen last week. Nearest significant resistance after the sideways move above the 739.35 is at 767.

Palladium, 240 min

Since June 8th the down trend in Palladium has been changing the slope to less bearish (black channel vs. blue and red regression channel lines). A sign that buyers are slowly stepping in and trying to create a reversal as price is getting close to a major support. Stochastics is pointing higher suggesting that price might be actually doing just that. However, there are resistance levels ahead and it probably takes some short term consolidation before price can turn higher. Nearest intraday support level is at 731.32 while the bottom of the sideways range above at 739.35 is likely to act as a resistance. The next more significant resistance level is in the region of 746 to 750 where the 23.6% Fibonacci level, 50 period SMA and the upper Bollinger bands coincide.

Conclusion

Long term picture is a sideways market with a bearish slant to it as price has just recently made lower high and the March low was a lower low especially on a closing basis. The short to medium term picture has potential turn bullish as price has moved close to levels that sent price considerably higher in March. Therefore, we are looking for momentum reversal signals above 723 resistance this week. The daily chart suggests that the short term move has potential to 767 (23.6% Fibonacci level).

Janne Muta
Chief Market Analyst
********

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.

 

[HFM.]

Date : 16th June 2015.

CURRENCY MOVERS OF 16th JUNE 2015.

EURUSD, Daily

EURUSD has been trading sideways for week now and yesterday’s data didn’t have much impact on the pair and it moved only slightly higher in yesterday’s trading. The US NAHB homebuilder sentiment index jumped to 59 in June versus 54 in May and 56 in April. It’s the highest since September. The single family sales index popped to 65 from May’s 58 (revised from 59), the best since 2005. The future sales index rose to 69 versus 63 (revised from 64). The index of prospective buyers rose to 44 was from 39. This is a solid beat, but it may not erode the gains in Treasuries much given the weakness in equities and the flight to safety nature behind some of the demand for bonds.

It’s not likely that there will be run-away moves in EURUSD as markets are likely to be on a wait and see mode going into the FOMC meeting. No policy changes are expected from the Fed, but the statement, economic forecast revisions and it has been argued that Yellen’s press conference should leave market participants with a stronger sense that a rate hike will come in October. Forecast revisions from the FOMC on Wednesday will be one of the key results of the meeting and will be used to assess rate hike probabilities for later in the year, as well as the likely trajectory. Despite the bounce in growth optimism in recent weeks, the FOMC will likely trim the official GDP estimates for 2015. But, it is also expected to increase the 2015-16 PCE chain price projections as energy prices have partly recovered from early-2015 lows. We expect a 0.1%-0.2% downward shift in the 2015 GDP and 0.4% boosts in the 2015 PCE chain price with likely additional upward nudge of 0.1% in the low-end inflation estimates for 2016. The core price central tendencies should remain roughly unchanged. The Fed may sidestep the usual downward bumps in the jobless rate estimates, given the flat jobless rate trend since February. The aggressive high-end near-term Fed funds rate estimates should be lowered as views converge toward the market expectation of a September or October start for Fed tightening. See our policy outlook page for a table of our assumptions for the Fed’s revised forecasts.

European court clears ECB’s OMT program. Draghi’s masterplan to safeguard financial stability and limit contagion finally won the backing of the European Court of Justice today, after a lengthy way through the courts in Germany and now the EU. The ECJ said in today’s ruling the OMT program doesn’t exceed the powers of the ECB, under certain conditions, which have been met. So the ECB can count on the OMT to help contain the fallout of a possible Greek default.

EURUSD has been range bound over the last few days. Upside has been limited by the resistance levels at 1.1326 and 1.1380 while the reaction lows from resistance have been higher than before. This has created higher daily lows and suggests upward bias but the resistance above has stood firm. Stochastics is indicating poor upside momentum while price is creating a bearish wedge. Therefore the line of least resistance should be on the downside over the coming days. This should bring the 1.0819 support into play. We’ve just seen a rally to 1.1326 resistance rejected which indicates weakness intraday. Today’s price movement is more likely range bound between 1.1152 and 1.1380. It is unlikely that EURUSD will have strong directional movements before FOMC meeting is over.

Currency Pairs, Grouped Performance (% Change)

US Dollar strength with AUD weakness have been the Currency Mover themes this morning. AUD has been the weakest against the dollar as it reacted lower from a resistance at 0.7780 yesterday and created a shooting star. Now the pair has moved lower as per this bearish indication. Markets are waiting for the FOMC meeting tomorrow which is visible in low volatility. Today’s trading is therefore likely to be range bound unless suprising news events change the expectations and force the market participants to recalculate the risk.

Main Macro Events Today

German May HICP inflation rose to 0.7% y/y, in line with the preliminary reading and up from 0.3% y/y in April. The national CPI rate also rose to 0.7% y/y. Headline rates are still held down by lower energy prices, which dropped 5.0% y/y in May. Excluding energy the national rate would have been at 1.3% y/y. Still, the decline in annual energy price inflation is slowing down as base effects start to drop out of the equation, which together with the drop in the EUR is pushing headline rates higher not only in Germany. Strong consumer demand and expected substantial wage gains this year are likely to keep German inflation above the Eurozone average, while the ECB’s accommodative policy is adding to price pressures, although this especially in the real estate market.

European Court Of Justice Decision on whether the European Central Bank’s OMT program was inside the ECB’s mandate.

German ZEW investor confidence dropped to 31.5 from 41.9 in May. A much sharper decline than anticipated, and the third consecutive drop in investor sentiment. The ZEW said external developments are limiting the room for a further improvement of the German economy, first and foremost the ongoing uncertainty about Greece’s future in the Eurozone, but also the weak dynamic in the world economy. The assessment of the current economic situation in Germany also dipped slightly to a still very high 62.9. Expectations for developments in the Eurozone as a whole also came off. Optimists outnumber pessimists, but the developments highlight that while growth is broadening there is no further strengthening for now as uncertainty weighs.

UK CPI rose +0.1% y/y in May, as expected and up from -0.1% y/y in April, which was the cycle low. Core CPI came in at +0.9% from +0.8%. The biggest upward contribution came from transport services, particularly air fares, with the timing of Easter in early April having a bearing, according to the ONS. PPI output prices were -1.6%, up fractionally from -1.7% in April, while input prices were -12.0% in May from a revised -11.0% in the previous month. Sterling has traded moderately lower in the wake of the release, although the data are near expectations.

US May Housing Starts data are out today and we expect the headline to decrease 3.1% to a 1,100k (median 1,095k) pace for the month from 1,135k in April. There is some downside risk to the release as the month’s NAHB index declined to 54 from 56 in April.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 17th June 2015.

CURRENCY MOVERS OF 17th JUNE 2015.

EURUSD, Daily

Yesterday’s US May building starts and permits divergence was good news on net but didn’t have an impact on the US Dollar Index. The 11.1% drop in housing starts from an upwardly-revised April cycle-high reflected the tail-end of the winter’s weather gyrations while an 11.8% permits surge to a robust 1.275 mln new cycle-high rate bodes well for housing activity into mid-year. Starts under construction is climbing at a healthy 14% rate into Q2, and home completions have risen 28.3% over the past two months after a 17.3% February-March setback that was likely weather-related. The surge in new home construction and completions will fuel a climb in new home sales into mid-2015.

FOMC began the first “live” meeting in terms of a possible rate move but there are no expectations for a rate hike to happen now. Risk is still for rate lift-off in September, but that could be just a token move according to market speculation. The improvement in growth, strengthening in the labor market, and the pickup in some inflation indicators support expectations the Fed will finally start to normalize policy next quarter. But, many are now of the opinion that Greece will default and increased market volatility could keep the FOMC inactive for the rest of the year. The Fed’s forecast revisions will be important for fine-tuning expectations on the rate trajectory. Yellen’s press conference also will be parsed for indications on the tightening path. So far the Fed Chair has taken the dovish path at each junction in the road given uncertainty over growth in the US and abroad, subdued inflation, and the impact from the stronger dollar. We suspect she will remain cautiously optimistic that the economy will perform in line with policymakers’ outlooks for stronger growth and a pickup in wages and prices.

EURUSD traded sideways yesterday as I expected in analysis but the pair found support a bit higher than I suggested, at lower 4h Bollinger bands at 1.1203. This created yet another higher low in 4h chart which suggests that EURUSD should push higher today. At the time of writing intraday this is happening with EURUSD trending higher this morning. Resistance level at 1.1280 has been limiting the move and judging from the intraday charts the area between 1.1280 and 1.1330 could well be the area that turns EURUSD lower today. The bearish view with potential to 1.1000 level over the coming few trading days is still valid. This is supported by the bearish wedge and the proximity of higher time frame resistance level. The nearest significant daily resistance levels are at 1.1380 and 1.4167 while support levels are at 1.1152 and 1.1050.

Currency Pairs, Grouped Performance (% Change)

This morning we are seeing AUD weakness and CHF strength. EUR has shown some strength against everything else but CHF which has been rather strong this morning against all the majors. USD, GBP and JPY performances are mixed as there is no clear trend across the board in these currencies.The strongest GBP pair over the last few days has been GBPNZD. This has taken the pair close to year 2011 weekly high at 2.2525. Another strong mover is AUDNZD and is trading near a resistance, the weekly pivot candle low (1.1140) from September last year.

Main Macro Events Today

UK Claimant Count Change: a drop of -11.1k in May claimant looks likely with the ILO unemployment for April seen steady at 5.5%.

UK Average Hourly Earnings: Markets will give particular attention to average household earnings to the three months to April, as this is expected to show the with-bonus figure rise 2.1% y/y from +1.9% and by 2.5% y/y in the ex-bonus figure, up from 2.2% previously. Such outcomes would mark new cycle highs, and anything stronger would likely reanimate BoE tightening expectations, which currently centre on Q2 next year.

Fed’s Interest Rate Decision and Policy Statement: No change is expected in this meeting. Risk is still for rate lift-off in September, but that could be just a token move according to market speculation.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 18th June 2015.

CURRENCY MOVERS OF 18th JUNE 2015.

EURUSD, Daily

After moving sideways for most of the day EURUSD found support at 1.1203 and bounced higher at the time of FOMC press conference. EURUSD is still trading inside a bearish wedge and near resistance levels. Yesterday’s close was well above the 1.1296 level and was a positive for the bulls but the upside is likely to be limited as price is trading at upper Bollinger Bands and close to resistance levels. We might see a bit more upside today but I expect price action to stay roughly inside the bearish wedge formation as I see resistance at 1.1424 while there is intraday support at 1.1330 – 1.1340. Daily support and resistance levels in EURUSD are: 1.1296, 1.1152, 1.1020 and 1.1380, 1.1467.

ECB’s Weidmann says ball is clearly in Greece court, something the Euro group is likely to mirror in its official statement today. Greek officials meanwhile say the ball is in the creditor’s court and with both sides continuing to play the blame game there is no sign of progress. Weidmann also repeated again that the ECB is forbidden to finance states directly and stressed that the Greek situation is very different to Italy and Spain. Nothing really new on the central bank’s position on Greece.

The ECB upped ELA assistance to Greece again yesterday, indicating that it is not ready to pull the plug and take the blame for a worsening of the situation, but the assessment that Greek bank’s are solvent is increasingly becoming questionable. Still, ELA assistance is actually given by the Greek central bank, who also takes the risks.

According to Merkel Greece needs to meet obligations to creditors. It seems even the German Chancellor is running out of patience with Greece. She still said one needs to reflect carefully on Greece, but added that its always been aid for reforms on Greece and that the country has gotten “unprecedented” solidarity already. She highlighted that Ireland and Portugal have concluded their programs and that Cyrpus is on a good way while Greece has dragged its feet on some reforms and didn’t conclude the measures. Merkel also said Greece isn’t on the agenda at the next summit and that a deal between Greece and the three creditor institutions is still possible, reiterating that where there’s a will there’s a way on Greece.

There was nothing definitive regarding the timing of liftoff in the FOMC statement or press conference yesterday. September is still the best guess to start normalizing rates as the data show improvement in the economy and some pickup in inflation. Additionally, the markets are taking Yellen, and the dots, at their word that the trajectory will be “gradual.” Data, therefore, will continue to be scrutinized for hints on tightening, along with global financial conditions. Meanwhile, Fed funds futures are consistent with this stance as implied rates reveal a shallower trajectory. The market had been pricing in strong probability for 50 bps in hike by the end of the year, but that was trimmed to one 0.25% hike.

Yesterday Yellen also referenced to the strong dollar suggesting that although it has appreciated significantly, she takes into account its negative impact on the economy, but hasn’t seen it have a negative impact on exports. Though the drag from the dollar on the economy could continue for “some time”, the Fed has no target and takes its moves as one of many factors affecting the outlook. She still believes that tightening is warranted this year despite the strong dollar. The buck remains lower on the day, however, as the risk of an immediate rate hike is still somewhat distant.

Currency Pairs, Grouped Performance (% Change)

The NZD slipped near 2010 lows against the USD today after data showed economic growth was much weaker than expected. This caused markets to anticipate further cuts in interest rates and sell the currency. As a result NZD is down against all the other major currencies and seems to be the only game in town as it has moved in excess of 1.20% against its rivals. Significant weekly support and resistance levels for NZD pairs are 0.6562 (NZDUSD), 1.6595 (EURNZD), 2.3298 (GBPNZD), 1.1659 (AUDNZD), 83.37 (NZDJPY) and 0.5753 (NZDCHF).

Main Macro Events Today

The Swiss Rate Decision. The Swiss National Bank was widely expected to keep rates unchanged and the rate was kept at -0.75. The appreciation of the CHF since the SNB abandoned its currency target in January has put pressure on the export-oriented Swiss economy, and with the Greek crisis hanging over the Eurozone policymakers will likely take a wait-and-see stance while keeping the options of currency intervention and higher charges on sight deposits open.

US Philadelphia Fed Index: June Philly Fed comes out today. An increase to 7.0 is likely (median 8.0) following May’s dip to 6.7. The Empire State Index for the month has already been released with a drop to -2.0 from 3.1 alongside a more restrained ISM-adjusted decline to 51.6 from 51.7. Overall, producer sentiment should trend sideways in June with the ISM-adjusted average holding at 51 for a third month.

The US May headline CPI is expected to grow 0.5%, while the core index rises 0.2%. Forecast risk: upward, as the bounce in oil prices in May should help lift the headline. Market risk: downward, as inflation undershoots may affect the timing of rate hikes.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 19th June 2015.

CURRENCY MOVERS OF 19th JUNE 2015.
EURUSD, Daily

EURUSD stayed inside the wedge and created shooting star candle in daily resolution and reacted lower from proximity of 1.1324 resistance. This morning we’ve seen weakness and some reaction higher from 1.1304. As the Greek situation is not likely to have a quick resolution I don’t expect EURUSD to move strongly today. I expect the pair to find support today around 1.1296 (another support at 1.1270) while upside is probably limited to yesterday’s high of 1.1435. I am seeing an intraday resistance at 1.1353 while daily support and resistance levels in EURUSD are: 1.1296, 1.1152, 1.1020 and 1.1435, 1.1380, 1.1467.

According to Bloomberg reports ECB is to hold an emergency teleconference today to discuss a Greek central bank request for more ELA funding. The central bank apparently is worried about the amount of capital withdrawn from Greek banks, which reportedly amounted to EUR 2 bln this week. ELA funding was just lifted on Wednesday and is conducted by and at the risk of the Greek central bank, but the ECB can limit overall amounts. It is increasingly difficult to argue that Greek banks fundamentally are solvent, which is a precondition for ELA funding, but the ECB clearly doesn’t want to be the one pulling the plug on Greece. The EU emergency summit on Monday will give yet another chance for an agreement, and without a deal capital controls almost seem inevitable.

Greece continues to dominate Eurozone markets, the rumour mill and official comments from both sides. This means ongoing volatility and wider intra-day ranges. Eurozone bond spreads narrowed slightly and Bunds underperformed Gilts as some safe haven flows were unwound and this trend is likely to continue amid fresh action to get a deal with Greece. EU President Tusk called an emergency summit on Greece on Monday to try and stem capital outflows, which the ECB is increasingly worried about. Reports that the ECB suggested Greek banks may close Monday were denied, but the Greek central bank reported called for further ELA funding. The risk of capital controls is rising.

U.S. reports signaled a long-await June factory sector bounce that will hopefully permeate the remaining June data, alongside a 0.4% May CPI rise that slightly undershot market forecasts and a narrower than expected $113.4 bln Q1 current account gap. The June Philly Fed moved to 15.2 from 6.7 coincided with a ISM-adjusted rise to 53.2 from 50.0, and defied Monday’s weaker Empire State data to signal some upturn in sentiment after a half-year stretch of dismal readings. We also saw a 12k initial claims drop to a lean 267k in the BLS survey week that undershoots both prior BLS survey weekly readings and monthly averages. We saw a second consecutive 0.7% leading indicators rise in May that added to the positive spin, leaving the economy in good position to outperform the low-balled GDP estimates released after yesterday’s FOMC meeting.

Currency Pairs, Grouped Performance (% Change)

USD has been stronger this morning following EURUSD hitting and failing to penetrate the 1.1424 resistance yesterday and dollar finding support levels against other currencies as well. AUD has lost ground this morning and is down especially against the USD, CAD and GBP. There is some strength in GBP but the performance is a bit mixed. JPY performance has been likewise while EUR is down against most of the competitors.

Nearest daily support and resistance levels for AUD pairs:

AUDUSD 0.7605 / 0.7864
EURAUD 1.1127 / 1.4770
GBPAUD 2.0028 / 2.0775
AUDJPY 94.32 / 97.30
AUDCAD 0.9410 / 0.9717
AUDNZD 1.1115 / 1.1304

Main Macro Events Today

Bank of Japan Monetary Policy Statement. As expected BoJ maintained the low interest rates its stimulus programme while it remained positive in its assessment of the economy. BoJ has conviction that growth will strengthen enough to accelerate inflation to its 2 percent target without additional monetary easing.

German May PPI inflation rose to -1.3% y/y from -1.5% y/y in April, with prices unchanged over the month. Producer price inflation remains in negative territory, but has clearly bottomed out at the start of the year and is slowly moving higher as negative base effects from energy prices start to fall out of the equation.

Canadian CPI could expand at a 0.9% y/y rate in May following the 0.8% growth rate in April. CPI is seen rising 0.5% on a month comparable basis in May after slipping 0.1% in April. Forecast risk: Mixed for total CPI given the rise in gasoline prices but 1.3% appreciation in the CAD that could restrain prices of imported goods. April was the first month the CAD gained ground against the USD since July of 2014 and the improvement continued in May on an average basis. Core CPI risk is modestly upward given ongoing upward pressure on the core CPI.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 22nd June 2015.

GOLD ROLLING OVER FROM A RESISTANCE

Gold, Weekly

Gold rallied from support over the last two weeks and reached a weekly pivot candle low at 1201. Price moved slightly above this resistance before failing and reacting lower. This resistance level also roughly coincided with 38.2% Fibonacci level adding to the significance of this area. Market is ranging and a failure to penetrate the aforementioned resistance suggests that the price Gold will move lower before another attempt higher can be occur. This would lead to a creation of lower high which would have bearish indication and mean that the technical picture deteriorates. Currently we have a higher weekly high from May and a lower weekly low from the beginning of June. This picture gives mixed signals and forces us to focus on a longer term bearish indication from a down sloping 50 week SMA (coincided with May high). Also the downward sloping price channel that has been in force since the 2013 high was put in place at 1434 gives a similar indication. Since November price has been moving sideways near a support but the lack of momentum is indicating lack of serious long interest in this market. Price needs to make higher lows and break resistance levels in order to turn the picture more bullish.

Nearest support and resistance levels: 1162 and 1201.

Gold, Daily

Gold broke out of descending regression channel two weeks ago and after some hesitation in form of a sideways move moved to a resistance at 1201. Stochastics oscillator had also moved to overbought levels suggesting that price has moved too far and should have a correction. This resistance and upper Bollinger Bands were too much for buyers and after a sideways day on Friday, the price of Gold has moved lower today. The line of least resistance is on the downside today and price could move as low as 1172 support before significant buyers step in.

The nearest significant support levels are at 1172,1201 and 1214.60.

Gold, 240 min

The price of Gold has at the time of writing retraced back to 23.6% Fibonacci level. Stochastics oscillator is close to the oversold threshold but this indication should be taken with a pinch of salt as price is trading close to a higher time frame resistance level. In other words it is more likely that price will move lower before solid support is found. The first potential support levels are close to lower 4h Bollinger Bands near 1180. These levels also coincide with 61.8% Fibonacci retracement level at 1178.8 and a rising trendline drawn from the June 5th low. Nearest significant support and resistance levels: 1178 an 1205.

Conclusion

Longer term picture is mixed with Gold moving sideways and making both higher weekly highs and lower weekly lows. Since November price has been moving sideways near a support but the lack of momentum is indicating lack of long interest in this market. Price needs to make higher lows and break resistance levels in order to turn the picture more bullish. In the short term the price of Gold is trading lower from a resistance level with the first significant support levels at around 1180. I am looking for lower time frame sell signals with targets at 1184 (T1) and 1178 (T2).

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 23rd June 2015.

CURRENCY MOVERS OF 23rd JUNE 2015.

EURUSD, Daily

EURUSD didn’t move much yesterday even though some positive news was received from the negotiations on financing Greece. The pair rallied to 1.1410 but failed creating both a 4h and eventually a daily rejection candles. This was very much in line with what I have been saying over the last week about EURUSD being limited on the upside to 1.1435 and with downside potential to 1.1000. The bearish wedge supported the view and now price action has confirmed this analysis with a breakout from the wedge. Today’s price action is likely downward biased with upside limited to 1.1319 while I see support between 1.1112 and 1.1148. The nearest significant daily support and resistance levels are at 1.1050 and 1.1434.

ECB has increased Emergency Lending Assistance to Greece this morning while the country has been now given 48 hours to reach a debt deal. EU leaders see progress in the Greek talks after the latest reform list showed a narrowing of the gap between creditors and the Tsipras administration and have given Greece 48 hours to finalise a deal. Eurozone Finance Ministers will meet again on Wednesday and could sign off a package if there is a staff level agreement by then. EU heads of state will then meet again on

Thursday with the aim to finalise a deal by the end of the week. It is likely that this will include an extension of the current bailout agreement and financing of upcoming ECB and IMF repayments through existing ESM funds earmarked initially for Greek bank recapitalisation. Greek debt is likely to be lengthened or re-profiled, although given the current construction of the ESM holding most of Greece’s debt, an outright write off seems less likely.

The 5.1% May US existing home sales bounce to a 5.35 mln pace yesterday beat the prior 5.31 mln four-year high to leave the strongest pace since the spike to a 5.44 mln clip back in November of 2009 with the homebuyers’ tax credit. We also saw a 4.6% median price rise to $228,700 new cycle-high, as prices now sit near the all-time high of $229,500 in June of 2005. Sales have bounced sharply in the seasonally important spring season after a dismal Q1 performance, alongside big rebounds for pending sales, permits, and the MBA purchase index, though we still have an anemic pace of housing sector recovery overall, with lean inventories and a cyclical price uptrend.

Currency Pairs, Grouped Performance (% Change)

AUD and USD strength together with EUR weakness have been the main themes this morning. EURAUD has lost the most ground at the time of writing as the pair failed to penetrate a resistance yesterday and is now approaching the lower end of the sideways range. Another strong mover this morning is NZD against EUR. EURNZD is struggling to penetrate a weekly pivotal resistance level at 1.6445. EURGBP is also down this morning despite the fact that the pair is close to support levels and lower daily Bollinger Bands.

Nearest important daily support and resistance levels for these pairs are:

EURAUD 1.4427 / 1.4769
EURNZD 1.6159 / 1.6674
EURGBP 0.7110 / 0.7211



Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

EMU PMI: Eurozone preliminary June PMI readings are expected to show a stabilisation in the manufacturing number at 53.6 (median same) and a decline in the services reading to 53.6 (med same) from 53.8 in the previous month, which should bring the composite down to 52.0 (med same) from 52.2. PMIs still point to ongoing expansion and national indicators are looking more even but there is no further acceleration in output growth and the data tie in with the ECB’s view that growth is broadening but not necessarily strengthening. This will leave the central bank firmly on course for full implementation of QE measures despite the pickup in headline inflation. Indeed, there still is some outside chance of a widening of asset purchases if the Greek crisis implodes and threatens to derail the recovery and stability in the rest of the Eurozone.

US New Home Sales. May new home sales should reveal a 1.0% decline to a 512k (median 520k) unit pace for the month following the 6.8% bounce to a 517k pace in April. Despite today’s firm existing home sales figures which had the headline pace up 5.1% there is still downside risk to tomorrow’s release from the NAHB decline to 54 in May and the fall in housing starts to 1,036k from 1,165k in April.

U.S. Durable Goods. May durable goods data should reveal a 0.5% (median -0.5%) decline for orders following a 1.0% drop in April. Shipments are seen rising by 0.5% with inventories up by 0.2% following respective April figures of -0.2% and 0.2%. Data in line with this forecast would leave the I/S ratio steady at 1.67 for a third month. There is downside risk to the report from the decline in Boeing orders to 11 from 37 in April and the weak industrial production figures which fell by 0.2% in May.

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 24th June 2015.

CURRENCY MOVERS OF 24th JUNE 2015.

EURUSD, Daily

Technical picture in EURUSD is bearish with price moving outside the bearish wedge I’ve had on the chart for quite some time now. Resistance area below 1.1239 is likely to turn price lower today and with no high quality support levels in proximity of current price action I am expecting to see another strong sell off today. My target for today’s move is 1.0937 as this level is likely to turn price higher again. Important daily support and resistance levels are at 1.1207 and 1.0930.

An agreement at technical level with Greece needs to be on the table today, in time for Finance Ministers to sign off the agreement at the Euro group meeting Wednesday evening ahead of Thursday’s EU summit. Even if this goes without a hitch, Tsipras will still have to get the deal through parliament in Athens and then through the German parliament. So plenty yet that could go wrong and trigger another flip in fixed income markets.

Yesterday US new home sales rose 2.2% to a 546k pace in May after rebounding 8.1% to 534k in April (revised from 517k) from the 9.4% March drop to 494k. That knocked the month’s supply to 4.5 from 4.6 (revised from 4.8). Regionally, sales were split with gains in the Northeast and West, and declines in the Midwest and South. The median sales price fell 2.9% to $282,800 from $291,100 (revised from $297,300). Prices are down 1.0% y/y versus the 6.0% y/y clip in April. Data are better than expected. The U.S. Markit flash PMI manufacturing index slipped to 53.4 in June from May’s 54.0 and is down from April’s 54.1. It’s a third straight monthly decline and is the weakest reading since October 2013. However, employment and new orders were higher, with the former at its fastest pace since November. Average cost burdens were up for a second straight month.

Currency Pairs, Grouped Performance

USD strength yesterday turned into weakness this morning with EURUSD and NZDUSD leading the pack. EUR pairs are seeing some strength across the board even though the German IFO was a disappointment today. AUD performance has been mixed while JPY is the loser this morning as it is down against almost all the competitors.

EURJPY came close to a support level at 138 and has now bounced higher but struggles with a resistance at 138.90. GBPJPY is one of the performers this morning as it’s trying to break above a sideways range it has been bound for a week. As this has been caused by the pair trading at resistance this is not an ideal spot to be a buyer in this pair. CHFJPY moving higher from the bottom end of an ascending triangle formation.

Significant daily support and resistance levels for aforementioned pairs are:

EURJPY 138.00 / 140.63
GBPJPY 194.63 / 195.35
CHFJPY 131.50 / 134.35

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

German IFO came in much weaker than expected, with the overall confidence reading falling to 107.4 from 108.5 against consensus expectations for a drop to 108.1. The weaker than expected number is in stark contrast to yesterday’s better than expected PMI readings, which showed improved sentiment in both services and manufacturing sectors. The IFO reading showed the third consecutive drop in the forward looking expectations number, which was likely impacted by uncertainty about Greece and is now at the lowest level since the start of the year.

Euro group meeting An agreement between Greece and its creditors needs to be reached in time for Finance Ministers to sign off at the Euro group meeting this evening, ahead of tomorrow’s EU summit.

US Gross Domestic Product The Q1 GDP growth is likely to be revised to -0.4% from -0.7% in the second release, following 2.2% growth in Q4. Forecast risk: downward, given last year’s big downside surprise for the second revision that may be on track for a repeat. Market risk for USD: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

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


Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 25th June 2015.

CURRENCY MOVERS OF 25th JUNE 2015.

EURUSD, Daily

Yesterday’s EURUSD trading was limited by the resistance level just below 1.1239. Market turned lower below this level as I expected and has since failed to push through this resistance but the selloff I anticipated didn’t materialize. Market has now formed a flag in 4h timeframe and projection from this formation suggests potential all the way down to 1.0915. The 50% Fibonacci level (measured from March low to May high) can be found at 1.0965 while my target of 1.0937 sits in between the aforementioned levels. The pair has been range bound with some effort to push the price higher but now it has moved below the 4h flag formation. I don’t expect yesterday’s high of 1.1234 to be exceeded today but look for a movement below latest pivot low at 1.1134 and towards my target. Important daily support and resistance levels are at 1.1207 and 1.0930.

Pensions remained sticking point in Greek talks, according to the FT citing leaked documents covering creditors’ counter offers to Greece’s reform plans. Creditor demands are focusing on the time line for a raise in the retirement age as well as the time contributions have to be made to benefit from full pensions. The pension system has been a key issue of controversy right from the start with creditors demanding a comprehensive overhaul of a system where costs spiraled out of control over the last decades.

There already was one reform in 2012 but costs remain too high with creditors demanding further cuts, while at the same time recommending a basic social safety net, which so far doesn’t exist in Greece, leaving the pension of parents and grandparents a fall back for many unemployed.

TsIpras’s meeting with creditor officials run into the early hours of Thursday morning, but in the end there was still no deal on the table. Eurozone Finance Ministers, which had gathered Wednesday evening, had little to discuss, and called off their meeting early, while agreeing to meet again this afternoon. Negotiators have already re-started talks this morning and the discussions with Tsipras will continue at 9 am local time. European heads of state are gathering for a 2-day summit again today and it seems Tsipras is banking once again on discussions at leaders level, where he can play Greece’s card of strategic Nato partner in the south-east of Europe and threats to forge closer ties with Russia.

This ties in with Greece’s demands that the ESM take over Greece’s debt at the IMF and the ECB. Merkel, however, has repeatedly stressed that a deal with the institutions, including the IMF, is a prerequisite. A Greek government minister put the chances of a deal at just 50% now and Grexit is becoming a real possibility. Sticking points are reportedly mainly immediate emergency measures demanded by creditors, which want to see the government passing more reforms through parliament before handing over further cash.

Even if there is an agreement and that is a very big if now, Tsipras will still have to get the deal through parliament in Athens and may run into difficulties with the left wing of his coalition. If he loses the votes of some of his allies there may be a greater shift in government or a referendum after all. The German parliament, which also has to sign off the deal, said it won’t vote on any agreement before it has been rubber stamped by Greek lawmakers. And another extension of the bailout agreement, which seems likely, will mean more talks and public wrangling.

The U.S. Q1 GDP growth boost to -0.2% from -0.7% slightly beat estimates thanks to small upside surprises spread across consumption and intellectual property, though we generally saw the mostly expected modest hikes for private and public construction, and boosts of $4.5 bln for inventories and $0.4 bln for net exports that left a small hike in real final sales growth to a still-weak -0.6% from -1.1%.

Currency Pairs, Grouped Performance

AUD strength really sticks out today. Australian Dollar is nicely up against everything else while EUR is weak and JPY is showing some strength. AUDUSD is moving higher from a rising channel support at 0.7700 while AUDCAD is approaching a resistance at 0.9594. GBPAUD is rolling over from a sideways formation after hitting a resistance at 2.0556. EURAUD has moved lower today after hitting a resistance at 1.4549 yesterday.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

German Jul GfK consumer confidence falls to 10.1 from 10.2 in June. The dip was a tad below market consensus. Greek concerns are likely to have weighed, although German sentiment reading remain at very high levels, amid a robust labour market and rising disposable income, which is not only boosted by low inflation, but also sizeable wage gains this year. The breakdown for the Gfk, which is only available until June, showed a marked decline in the reading for business expectations, while income expectations surged. The willingness to buy fell back slightly, but remains high. The German consumer will continue to support the recovery.

EU Extraordinary Economic Summit

US Personal income is expected to grow 0.4% in May, while consumption should be up 0.9%. Forecast risk: upward, given the stronger May employment report. Market risk: downward, as softening in data could impact rate hike timelines.

US initial jobless claims are expected to be 270k (median 272k) in the week-ended June 20. Continuing claims are expected to rise to 2,225k for the week-ended June 13. Forecast risk: downward, as some risk remains from oil sector disruptions. Market risk: downward, as weaker than expected data could delay rate hike expectations.

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

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 26th June 2015.

CURRENCY MOVERS OF 26th JUNE 2015.

EURUSD, Daily

EURUSD keeps on moving in a range while market participants wait for clues on what will happen with Greece. In previous reports I’ve pointed to a resistance below 1.1239 and suggested it would cap the upside yesterday and day before. This has been the case and price bars in both daily and 4h charts have been making lower highs. The bearish daily technical picture points to lower prices but the lack of downside momentum over the last two days and this morning forces me to question this indication.

Also, this being Friday and with no progress in Greece – EU negotiations in sight market might be range bound for yet another day. EURUSD has had a few narrow two to three day ranges since the March low but no such four day ranges. Therefore, we are approaching the breakout from this range. Range bound market means that the supply and demand are in a relative balance and therefore probabilities of price moving lower are now smaller. In other words, the likelihood of price moving up as easily as it could go down has increased. At the time of writing market has been rallying higher and towards the resistance levels. Intraday price action at resistance will give us clues on how likely it is that the resistance will hold. Important daily support and resistance levels beyond the range are at 1.0930 and 1.1292.

Currency Pairs, Grouped Performance

This morning it has been the commodity currencies that have taken beating. At the time of writing AUD and NZD are down against the majors. JPY has been attracting money from AUD and NZD while USD, EUR and GBP have not had constant performance one way or the other. NZDJPY has been moving lower for the last two weeks and is now trading relatively close to a weekly support level at 84.08 and right at a support zone created by a weekly pivot candle. AUDCHF rally failed from a resistance yesterday and has been now moving lower closer to a 4h pivotal support at 0.7182. The 0.7750 resistance proved too much for AUDUSD again yesterday and the pair fell down to lower 4h Bollinger Bands and close to a support provided by rising daily trendline. However, price has made lower highs in 4h resolution which suggests that this market is lacking in buy conviction.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

German May import price inflation was weaker than expected, falling back to -0.8% y/y from -0.6% y/y in April. Prices were down 0.2% m/m and for once not because of lower energy prices, but a sharp decline in prices for consumer goods. Prices for durable goods dropped 0.9% m/m and prices for non-durable goods fell 0.5% m/m. The monthly drop, which was likely impacted by the rebound in the EUR from the middle of April to the middle of May, brought the annual rate for imported consumer goods to a still relatively high 3.3% y/y.

BoE Governor Mark Carney Speech

EU Extraordinary Economic Summit The Q1 GDP growth is likely to be revised to -0.4% from -0.7% in the second release, following 2.2% growth in Q4. Forecast risk: downward, given last year’s big downside surprise for the second revision that may be on track for a repeat. Market risk for USD: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

US Michigan Consumer Sentiment: The second release on June Michigan Sentiment is out Friday and should be revised up to 95.0 (median 94.6) from 94.6 in the first release and 90.7 in May. The report has displayed a consistent, though, diminishing tendency toward upward revisions over the past year.

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

Janne Muta
Chief Market Analyst
Hot Forex

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.

 

[HFM.]

Date : 29th June 2015.

UPDATE ON GREECE.

The euro is under pressure in early-week trade as Greece’s talks with the Eurogroup broke down over the weekend, and the ECB refused to top up ELA assistance. Greece has consequently imposed capital controls and announced a referendum for next Sunday, which will determine whether the electorate has the stomach to exit the euro. Finally, after five years, the Greek drama is coming to a definitive head. Polls suggest that the people of Greece would rather compromise to stay in the euro than exit, but markets will remain on tenterhooks this week ahead of the referendum. Some key US data are also due this week, culminating with the release of the June payrolls report on Thursday (Friday is a holiday in the States). EURUSD hit a four-week low at 1.0953 after closing Friday at 1.1166, subsequently recovering above 1.1000. Recoveries will likely remain muted affairs, though incoming polls out of Greece will have potential to create volatility this week.

EURUSD is trading higher and tries to close the gap. Not suprisingly EUR is down against all the currencies but at the time of writing there is no sense of panic spreading across the FX markets. This is evidenced at the time of writing by EURUSD trading higher after the gap opening. Asian, European and US equity futures markets are down and Gold is trading higher by 0.4%.

EURUSD remains bearish as it is difficult to anticipate what the political players will do and how it impact markets. Over the next few days we should see trading opportunities for technical traders that know how to take advantage of nervous markets and volatility. EURUSD has a resistance level not far above current price action at 1.1130 which in the light of what’s happening with Greece suggests that EURUSD will trade lower after the return move is over. The June 1st candle seems to be the first pivotal support area and I expect this support hold today unless new suprising news items come up.

Janne Muta
Chief Market Analyst
Hot Forex

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.