Hot Forex - Market Analysis and News.

[HFM.]

Date : 1st October 2015.

CURRENCY MOVERS OF 1st October 2015.

EURUSD, Daily

EURUSD price continues to lack direction within the daily chart and it is beginning to appear that a trading range may be forming between the 1.1460 and 1.1090 levels over the short term. This period of lackluster price action should remain as the market waits for the U.S. jobs data due out on Friday. Traders should look towards commodity prices for any signs of a bottoming which may contradict data that still points to slower global growth. The likelihood of a stronger USD and weaker EUR should remain as the main trend into the year end as fallout from the European automotive industry and the likelihood of further ECM QE increases.

Today’s mixed European PMI readings will give ECB policy makers something to argue about at the next council meeting, especially as downside risks are picking up in light of developments in the global economy and the fallout from the emission scandal for European automakers. The current mixed readings are clearly showing up in the EUR as price has yet to choose a direction with trader’s undecided on which side of the trade to take.

The global stock market rebound is still continuing for now, despite a dip in Japan’s Tankan index, and stabilization in China’s manufacturing PMI at contraction levels. The USD has been trading firmer against the EUR and GBP over the last 5 trading days on the back of a strong Wall Street close and follow-up gain in Asian stock markets. The AUD and CAD, meanwhile, rallied to one-week highs versus the USD, while the NZD hit a two-week peak.

Currency Movers Charts

The EUR is mostly weaker against the majors as the Eurozone manufacturing PMI suggests a slight slowdown in overall growth dynamics, but a more balanced picture across the Eurozone.

The GBP is trading mixed after the UK manufacturing PMI came in fractionally above market forecast.

The CHF is sharply lower in the wake of an unexpected dip in the Swiss SVME manufacturing PMI.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• GBP Manufacturing PMI: The UK manufacturing PMI is fractionally above forecast at 51.5 in September data. The survey this month indicates stabilization in the sector at moderate expansion, holding just above the two-year low point at 51.4, which was seen in June. Sterling has traded modestly higher in the wake of the data.

• USD Initial Jobless Claims: U.S. initial jobless claims are expected to be 270k (median 270k) in the week-ended September 26. Continuing claims are expected to fall to 2,213k for the week-ended September 19. Forecast risk: downward, as volatility concerns could give businesses pause.

• USD Manufacturing ISM: The September ISM is expected to rise to 52.0 from 51.1 in August. Forecast risk: upward, given strong component data in the early month reports. Market risk: downward, as weakening in data could impact rate hike timelines.

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

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

John Knobel
Senior Currency Strategist
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 : 2nd October 2015.

CURRENCY MOVERS OF 2nd October 2015.

EURUSD, Daily

EURUSD short-term trend remains flat and range bound with a price recovery towards the 1.1460 area looking unlikely as long as price remains below the 1.1280 level. Yesterday’s U.S. report revealed a disappointing September ISM drop and a downward bump in the construction spending though the three months ending in August was not enough to push the EURUSD to close above the lower end of the 1.12’s (61.8%). Potential trade setups for the short term are to enter short positions near 1.1280 for a 1.0930-1.0920 target; alternatively, on a clean break of 1.13, long positions could be opened for a 1.1460 initial target.

The European calendar yesterday was focused on manufacturing PMI readings. The overall Eurozone September manufacturing PMI was confirmed at 52.0, in line with the preliminary reading and down from 52.3 in the previous month. France is returning to growth and only Greece is in contraction territory, although, even the Greek manufacturing PMI has started to pick up again. So, pretty much a confirmation of what the ECB sees – ongoing growth, but with reduced momentum, even if the recovery is broadening somewhat.

The UK manufacturing PMI was slightly higher than expected at 51.5, which is only marginally down from August’s 51.6. The sector continues to expand, although it is holding just above the two-year low point at 51.4.

Bank of Japan sees little immediate need for adding stimulus according to Bloomberg headlines.

Fed Williams repeated his rate hike call for “sometime later this year” in his speech from Salt Lake City. The news shouldn’t sway the markets much ahead of today’s payrolls report.

NYMEX crude has fallen back to $45.20 lows, after peaking at $47.08 earlier. The move comes as the National Hurricane center shifts the path of the hurricane further East, and away from energy infrastructure on the northeastern coast.

Currency Movers Charts

The JPY is weaker as Japan’s Tankan survey of business sentiment this week found the index for large manufacturers to be slightly worse than expected. A pattern that has been persisting since mid-August with periodic bouts of demand for the safe haven of the yen having been interspersed with bouts of relative calm. In the background are expectations for the BoJ to expand its QQE program at its Oct-30 policy meeting.

The EUR has drifted modestly lower, to the 1.1160 area after failing to hold gains above 1.1200 on several attempts over the last day.

The GBP is mostly stronger as the U.K. construction PMI rose to 59.9 in the headline of the September survey, up from the 57.3 reading of the August survey and above the 57.5 median forecast. Residential construction rose at the quickest pace in a year, and job creation lifted to its best level in three months.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• EUR ECB Draghi’s Speech: Draghi is taking a “wait and see stance” and with core inflation actually trending higher, labour markets stabilizing, wage growth picking up and credit conditions also improving it is not hard to see why.

• USD Factory Orders: August factory orders are expected to fall 1.5% with inventories down 0.1%.Forecast risk: downward, given the weaker top-line durable goods numbers. Market risk: downward, as weaker data could impact rate hike timing.

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

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


John Knobel
Senior Currency Strategist
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 October 2015.

CURRENCY MOVERS OF 5th October 2015.

EURUSD, Daily

The EURUSD daily chart bull cross of the 10, 50 SMA moving average is proving to be a reliable indicator, as short term price action is holding above the 6 week lows since the cross was spotted. Short term bullish price momentum is expected to be maintained since price seems to be bouncing off the bottom end of the 1.1090 – 1.1460 expected trading range. Short term long position holders should be on alert for profit taking around the September 18th high (1.1460), while short traders should watch for a break below 1.1090 that could open up the way towards the 1.0920’s.

Growth worries will leave Fed, BoE on hold, while there is now an increase risk of European Central Bank and Bank of Japan stimulus after the September jobs data was a disappointment across the board. Data showed only a 142k payroll rise after 59k in downward revisions, a 0.2% hours-worked drop with a workweek downtick to 34.5, and a 13k payroll drop in the bellwether goods sector led by mining and factories that translated to a 1.0% hours-worked plunge. Hourly earnings were flat. The U.S. labor force dropped to a 5.05% new cycle-low, while the labor force participation rate plunged to a 62.4% 38-year low.

China is on a holiday through Wednesday and Australia is closed today for Labor Day.

The magnitude of slowing in the global economy is the biggest uncertainty facing investors and central banks at the moment. The disappointing U.S. jobs data, on the back of the FOMC’s decision to delay liftoff, decreases investor confidence. The upside is that consumer spending and record U.S. auto sales give a better picture of the U.S. economy. Investors will now focus on the upcoming data out this week for further short term direction.

Currency Movers Charts

The USD is weaker across the board and sold off immediately on the disappointing U.S. jobs report. The impact on the Fed rate-hike decision is more uncertainty and markets will increase in volatility with a growing feeling that the Fed has miscalculated.

The GBP is trading lower as the U.K. economy continues to look a little softer and expectations are that the BoE will not tighten monetary policy prior to a move by the Fed. The PMI fell slightly to 51.5 in September from 51.6 in August, which was revised up from 51.5. The reading has been running above 50 for thirty straight months. The pace of growth seen in the second and third quarters of this year have been weaker than seen earlier in the current growth sequence.

The CAD jumped immediately after the US employment numbers were released. The much smaller than expected numbers spooked the markets because the widely anticipated Fed rate hike now looks as though it will have to wait well into next year.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• GBP Services PMI:: Unexpectedly dove to a 29-moth low of 53.3 in the headline reading of the September survey. Total business activity and new business growth both came in at 29-month lows. Outstanding business activity consequently grew at only a fractional rate, and the long-term outlook fell to its weakest reading since August 2014. Input prices jumped, due to salary pressures, though output prices rose only slightly while overall price pressures remained weak by historical standards. The only bright spot was employment growth, with job creation the best since June.

• USD ISM Non-Manufacturing PMI: The U.S. ISM-NMI is expected to fall to 58.0 from 59.0 in August. The July spike set a new post-recession high. Forecast risk: downward, given weakness in earlier month releases. Market risk: downward, as a run of weak data could impact rate hike time-lines. The ISM-adjusted figure for the ISM-NMI tends to track that of the Philly Fed.

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

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


John Knobel
Senior Currency Strategist
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 : 7th October 2015.

CURRENCY MOVERS OF 7th October 2015.

EURUSD, Daily

It appears the FX market continues to play down a U.S. Fed rate hike this year. The EUR and the USD have been falling behind emerging and commodity related currencies as markets shift to a risk-on mode. This could be because of hopes that more stimulus will be generated by Europe and Asian policy makers. Technically, the EURUSD remains range bound with current price now testing the 1.1280 minor resistance. In the immediate short term, selling pressure may emerge near the 1.1280 area, with short traders possibly seeking a 1.11 target. However, a clean break over the 1.1280 resistance may entice the EURUSD bulls to commit to further long positions for a target just below the 1.1460′s.

Asian stock markets advanced with the Hang Seng outperforming and opening the way for further gains in Europe. Stock markets are benefiting from the recent weak data that pushes the odds that global monetary policy will remain accommodative for longer, therefore, cheap U.S. dollars should continue to flood the market with companies and investors betting on consumption to fuel corporate earnings.

The BoJ kept policy on hold. In Europe, the BoE starts its 2-day meeting and it’s widely expected that any change in policy is on hold for now. The U.S. and German production fell in August. This data of disappointing manufacturing orders fits in well with the markets view that the ECB could be moving towards further QE.

In the U.S. solid gains in consumption and business spending has been on the upswing, and inflation is still below the Fed’s 2% target. The Fed’s Williams said that he does not believe that there’s been a fundamental shift in the economic outlook, and he remains bullish on China.

Currency Movers Charts

The EUR is weaker against the majors as Europe looks to increase QE and stimulate growth after a softer GDP number for the quarter. The USD is slightly lower as the impact on the Fed rate-hike decision is more uncertainty and markets will increase in volatility with a growing feeling that the Fed has miscalculated. The GBP is not moving much, although downward bias may prevail now that the U.K. economy continues to look a little softer and expectations are that the BoE will not tighten monetary policy prior to a move by the Fed. The NZD is broadly higher as commodity markets hold ground, with Gold and Copper holding on to recent gains.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• EUR German Industrial Production: dropped 1.2% m/m. Initial expectations had been for a modest rise over the month, but with much weaker than expected orders numbers yesterday, a correction had always looked likely. Jul was revised up to 1.2% m/m from 0.7% m/m reported initially, but the three months trend rate nevertheless fell into negative territory.

• GBP Manufacturing Production: 0.5% actual came in higher by 0.10% than the 0.40% forecasted number.

• JPY BoJ Monetary Policy Statement: The BoJ announced unchanged policy, as was widely expected, maintaining bond and other asset purchases (QQE) at an annual rate of Y80 tln. In the statement the central bank remarked that the economy had “continued to recover moderately, although exports and production are affected by the slowdown in emerging economies.”

• CAD Building Permits: Building permit values are expected to rise 1.0% in August after the 0.6% dip in July. The Bank of Canada has assured that Canada is not at risk of a national housing bubble and that the soft landing remains in play.

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

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


John Knobel
Senior Currency Strategist
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 October 2015.

CURRENCY MOVERS OF 8th October 2015.

EURUSD, Daily

The FX markets have been relatively quiet and global equity markets trading mixed over the last 24 hours. U.S. and European markets were up yesterday, while Asian markets traded mostly lower in overnight trading in the wake of a week long holiday in China. Commodity prices have been correcting after yesterday’s price rally, this has seen the AUD and other commodity dependent currencies getting whipped as commodity prices adjust to the possibility of a further delay in the U.S. Fed rate hike.

The EURUSD is trading higher in European trading having now cleared the 1.1280 resistance level, as the IMF said that the U.S. Fed should wait for more signs to raise rates, with IMF’s Vinals saying that “wage and price pressures don’t justify a Fed rate rise and that waiting a couple of months is less risky than a premature lift-off.” The IMF also said that ECB policies are gaining traction while also warning that deleveraging in China will require great care and that it sees a “heightened” chance of global asset-market disruption.

For the moment, EURUSD daily traders will focus on whether today’s resistance (1.1280) in European session price break will hold and close above (1.1280), or if it will leave a less meaningful shadow for the day and close below (1.1280). EURUSD bulls will prefer to see a clean close on price above 1.1280 in order to keep alive any attempt to carry the pair towards the 1.1460 next key resistance level. I would also like to point out again that current price is still holding well above the daily 10,50 SMA bull cross event that accrued in mid August. This bullish moving average double crossover observation technically adds to support the case for EURUSD long holders, at least in the short term.

Currency Movers Charts

The EUR traded sharply higher in European trade as a technical upward break of the 1.1280 recent resistance area has been penetrated. The EUR has been moving upward even through recent German and France economic data have been on the weak side with a dive in German exports and an unsuspected dip in French business sentiment.

The AUD trades lower as expectations of continued weak growth in China and the rest of Asia point to softer growth in Australia. The CHF is higher across the board against the majors as the CHF is still the best risk off place in the market. The USD and the GBP are mostly softer ahead of the U.S. FOMC minutes and the BoE Governors speech later today.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• EUR German Trade Balance: German trade surplus narrowed as exports fell. Germany posted a trade surplus of EUR 19.5 bln in August, down from EUR 22.4 bln in the previous month. Exports dropped 5.2% m/m, after a 2.2% m/m rise in July. The fact that imports also dropped a strong 3.1% m/m, suggests that like in manufacturing data, the timing of the school holidays in the different German states may have distorted the numbers somewhat, but the fact that the drop in exports far outstrips the decline in imports and is in fact the strongest declines since the recession days of 2009 is worrying and ties in with other data showing a slowdown in activity. Exports were still up 6.6% y/y in the first eight months of the year, however, and the accumulated trade surplus widened to EUR 163.9 bln from EUR 136.0 bln in the first eight months of 2013.

• GBP BoE Interest Rate Decision: It is widely expected that the Bank of England will keep policy on hold; the focus today will be on the minutes.

• CAD Housing Starts: Starts are expected to slow to a 205k unit rate in September (median 204.0k) from the 216.9k pace in August. A pull-back in multiple starts after the 19.5% surge in August is expected to slow total starts in September. Forecast Risk: The economies of Canada’s energy producing regions have taken well publicized hits from the fall in energy prices. Expect slower activity in those markets to continue. However, mortgage rates are lean, which has boosted activity in other regions and helped maintain momentum in construction activity.

• USD FOMC Minutes: From Sept 16-17 meeting that a big focus given surprise rate lift-off delay. So far, the markets view that conditions for hike are approaching, but not there yet.

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

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


John Knobel
Senior Currency Strategist
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 October 2015.

CURRENCY MOVERS OF 9th October 2015.

EURUSD, Daily

There was no surprise in the FOMC minutes from the mid-September meeting with “several members” worried that downside risk to growth and inflation have increased due to uncertainties about the global economy. The fact that the FOMC members are downbeat adds to the odds that the FED will delay to at least year end. The U.S. Dow Jones finished with a solid higher close in the wake of the FOMC minutes, while Asian stock markets have rallied across in overnight trading, and most commodity prices are gaining. Crude Oil is trading above $50 for the first time since late July, and may aid support to commodity linked currencies.

Previous EURUSD price action closed just below the key resistance (1.1280), leaving a shadow on the daily. However, the EUR bulls seem to be gaining control of the market this morning as price has taken out yesterday’s high (1.1327) and now looks set to continue a push higher with short term bullish momentum now in play. EURUSD bulls should remain cautious of the failed upward break of the one year moving average August high near the 1.17’s, which supports that the longer term trend on the EUR remains to the downside.

EURUSD daily traders should understand that the pair still lacks direction over the very short term and price seems to be attempting to trace out a trading range between the 1.1090 – 1.1460 range.

The Bank of England left policy unchanged as expected; however, the meeting minutes sounded more to the side of holding current policy for an extended period as the BoE pointed out downside risks, all suggesting that the BoE is in no hurry to raise rates.

Currency Movers Charts

The EUR is trading higher against the majors in the wake of positive French production numbers, which normally is not a EUR mover, but today catches a USD bearish market following yesterday’s publication of the Fed’s minutes to its most recent policy meeting. The USD, JPY and the GBP are all suffering losses as commodity currencies trade stronger fueled by a general risk on investor sentiment after the FOMC minutes indicated an increased in the odds that the FED will delay any upward move in interest rates. The AUD , CAD and NZD are all benefiting from the stronger commodity markets and the fact that US Crude Oil is trading at its highest levels not seen since late July.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• EUR Italian Industrial Production: Dropped -0.5% m/m in August, after 1.1% m/m in July. The work day adjusted y/y rate fell back to 1.0% from 2.8% and output actually stagnated in the three months to August, which will raise renewed concerns about the health of the Italian economy.

• EUR French Industrial Production: Better than expected with manufacturing up 2.2% m/m and overall production 1.6% m/m. July data were revised down, but the numbers are nevertheless encouraging. The positive numbers tie in with the improvement in French PMI readings recently and confirm that the cyclical recovery in the Eurozone has finally reached France.

• USD Wholesale Inventories: August wholesale trade data is out later today and should reveal a 0.3% (median unchanged) decline for sales while inventories remain unchanged for the month. This would follow respective July figures of -0.3% for sales and -0.1% for inventories.

• CAD Bank of Canada Business Outlook: Due out later today, is expected to improve to 10.0 in Q3 from 8.0 in Q2 and a multi-year low 4.0 in Q1. An expected rebound in Q3 GDP following the declines in Q1 and Q2 is expected to lift sentiment.

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

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


John Knobel
Senior Currency Strategist
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 October 2015.

GOLD IS TRADING AT 1169 RESISTANCE.

Gold, Weekly

In my previous report I took the view that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. I also wrote that we should see some bottoming action above the 1097 support and that could correct lower from the levels current at the time of the report. I said that if 1135 level breaks the next significant daily support level is in 1098 -1112 bracket. All this played out well. Price moved lower and after a wild swing higher moved to a support range I mentioned. After printing a weekly bar low at 1103 price has had a significant rally from this support range.

After creating two higher weekly lows the price of gold last week broke through and is now trading outside of medium term bearish channel. The width of the channel points almost exactly to the upper end of the long term bear channel at approx. 1260. This level roughly coincides with the 23.6% Fibonacci level at 1252. Gold is currently trading near 61.8% Fibonacci level and a previous support (now a resistance). At the same time Stochastics has moved right at the threshold of overbought territory. Price is getting close to the 50 week moving average while the upper Bollinger Bands are not very far from the current market price. The nearest resistance is at a pivotal weekly high at 1169 while nearest major weekly support is at 1103.

Gold, Daily

Price is trading near a resistance area between 1169 and 1187 created by a previous sideways move. While moving averages (30 and 50 SMA) indicate the short term trend is higher Stochastics is overbought while price is trading above the upper 2 standard deviation Bollinger Bands. The nearest potential support is at 1152 – 1154 region while the resistance area is wider, from 1169 to 1187. Since August the price of gold has formed a triangular formation and a projection from the triangle points to 1221 – 1232 resistance range.

Gold, 240 min

Price is trading near 1169 resistance and right at the top of a regression channel while Stochastics are in the overbought zone and moving sideways. This is a sign of momentum slowing down. At the same time price is trading outside the upper Bollinger Bands. Previous pivotal candle high at 1170 is very near to the current market price. The nearest 4h hour support level is at 1158.50 while the area between 1135 and 1143 is support range. Should this not hold, the next support range at 1104 – 1112 comes into play.

Conclusion

The higher lows in the weekly chart point to higher prices but there are several technical factors likely to slow the price down. Historical resistance at current levels, together with the proximity of 50 week SMA and the upper Bollinger Bands that coincide with 50% Fibonacci retracement are a challenge for the bulls. I expect this combination to turn the price of gold down to 1104 – 1125 support range. The 4h support range at 1104 – 1112 is a likely level to cause a rally should the price correct that far. Look for momentum reversal signals in the lower timeframes to confirm the analysis for both longs and shorts.


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 : 13th October 2015.

CURRENCY MOVERS OF 13th October 2015.

EURUSD, Daily

With markets trading in quiet mode yesterday because of the bank Holiday’s in the U.S., Canada and Japan traders should expect to see price action pick up as traders get back to work after the extended weekend.

EURUSD daily still remains contained within the 1.1460 (Top) 1.1090 (Bottom) range, with current price now trading comfortability above the key support (1.1280) with the pair not showing any signs of leaving a new lower top from the 1.17 August high. I see upside potential in the immediate short term to be limited to around the 1.1440 – 1.1460 levels, before selling pressure emerges, however, since bullish price momentum still remains present there remains the risk for sellers of a price extension towards the 1.15 – 1.1530′s.

Asian stock markets are mostly lower in overnight trade as weaker than expected trade data out of China put pressure on commodities and overall market sentiment. The drop in Chinese imports added to the fall in oil prices yesterday. U.K. BRC retail sales came in much stronger than expected.

The USD traded weaker in quiet Monday trading with fresh losses against the EUR, AUD and NZD, while the JPY is still flat. The general weakness in the USD is a continuation of selling seen in the wake of last week’s release of the FOMC minutes, which have seen the odds for a Fed rate hike expectations shifted towards year end or even further out.

Currency Movers Charts

The USD over the last 5 day trading sessions has been to the downside sparked by the latest release of the FOMC meeting minutes which have seen the odds for a Fed rate lift-off by year-end lengthen. The GBP is lower across the board in the wake of lower trade balance that fell in August to GBP-3.27 billion from GBP-4.4 billion in July while the forecast was for a GBP 2.5 billion deficit. The AUD has been outperforming as higher commodity prices and hopes of more prolonged stays of ultra-accommodative monetary policy at the Fed and BoE give AUD buyers reason to support price.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• EUR German HICP: Was confirmed at -0.2% y/y, national CPI at 0.0% y/y, as expected. The breakdown, which was released for the first time, confirmed that lower energy prices are the main reason behind the negative headline rate. Prices for heating oil were down 27.9% y/y in September and petrol prices dropped 13.8% y/y. Excluding both household energy and petrol the annual rate stood at 1.1% y/y, still below the ECB’s 2% limit for price stability but far above the headline rate and the risk of a real deflationary spiral is very small, which means the ECB won’t need to react to the drop in headline inflation numbers, even if they keep easing speculation alive.

• GBP Consumer Price Index: The Consumer Prices Index (CPI) fell by 0.1%, compared to no change (0.0%) in the year to August 2015. A smaller than usual rise in clothing prices and falling motor fuel prices were the main contributors to the fall in the rate. The rate of inflation has been at or around 0.0% for most of 2015.

• EUR German ZEW Survey: Investor sentiment fell more than expected to 1.9 from 12.1. Market sentiment is swinging between concerns about the global growth outlook and hopes that monetary stimulus will remain in place for longer than previously thought and that this will prevent a substantial deceleration in growth.

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

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


John Knobel
Senior Currency Strategist
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 : 14th October 2015.

CURRENCY MOVERS OF 14th October 2015.

EURUSD, Daily

EURUSD daily price has been in a momentum driven mode since clearing to the upside the previous resistance now turned support (1.1280) level. This upward momentum on price has been done on the back of mostly disappointing Eurozone data; however, the market has interpreted last week’s release of the U.S. Feds FOMC meeting minutes as a reason to sell off the USD, therefore, proving short term support for the EUR. Moving forward, stochastic oscillator analysis is starting to look overextended, indicating that momentum may start to slow. Price is also nearing the 260 period (1 year) SMA leaving me with the technical view that the EURUSD remains at risk for a fall towards the 1.1280′s, unless we see a clean break above the 1.1460′s that could open up the way for the 1.1530′s.

On Tuesday, we saw that the German ZEW investor expectations drop was much more pronounced than anticipated, with optimists only marginally outnumbering pessimists now. The index has been falling steadily since March and the decline in investor sentiment clearly reflects growing concerns about the health of the global economy and the impact of slowing growth in emerging market economies on advanced countries. The expectations index for the U.S. dropped sharply in October, and the reading for the Eurozone also declined. The German ZEW decline was not a total surprise in the wake of the VW emission scandal, the refugee crisis and, of course, uncertainty about the global growth outlook.

Global stock markets were weaker on Tuesday, as disappointing trade news from China continues to influence investor sentiment, and signs of disinflation from Europe. Also, profit taking on U.S. markets added to the selling pressure after the Dow Jones posted a 7-week high last week.

Currency Movers Charts

AUD has been correcting lower in the wake of a 2 week advance, AUDUSD buyers have emerge around the 0.72 area and a potential 10,50 SMA bull cross may be forming on the daily. The NZD has been trading higher as the New Zealand economy continues to grow, supported by strong home sales. The USD is still softer as markets continue to add pressure for USD buyers with the impact of a delayed rate hike fresh on traders mind, as well as disappointing retail sales data.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• GBP Claimant Count Change: UK unemployment unexpectedly dipped to a new cycle low of 5.4% in the official ILO figure for August. This is below the BoE’s 5.5% NAIRU marker, which is the non-accelerating inflation rate of unemployment, below which the central bank expects inflation pressures to build. Other parts of the labour report showed the claimant count rising by 4.6k in September, which is worse than expected as the median forecast was for a 2.5k decline. The claimant count rate remained at cycle lows of 2.3%. Wage data was perky, though within expectations. The with-bonus figure rose 3.0% y/y in the three months to August, up from 2.9% previously. This is a strong rate of real improvement in households spending power, given that CPI is at -0.1% y/y, and the BoE will be monitoring this closely with unemployment now south of 5.5%.

• EUR Eurozone Industrial Production: Eurozone industrial production dropped 0.5% m/m in August, in line with median expectations and indications from national data last week. The annual rate dropped to 0.9% y/y from 1.7% y/y in the previous month. Confidence indicators continue to suggest ongoing expansion, but also a slowdown in growth momentum, and even if the broadening of developments is encouraging, the knock to the German economy from the emission scandal and the slowdown in emerging economies is also raising concerns about the outlook and adding to the arguments of the doves at the ECB.

• USD Retail Sales: U.S. retail sales rose 0.1% in September, and fell 0.3% ex-autos. The disappointing data will add to expectations of no Fed rate hike in 2015. The 0.2% headline August gain was bumped down to unchanged, though July’s 0.7% was bumped up to 0.8%. The 0.1% ex-auto gain from August was revised lower to -0.1%. Sales excluding autos, gasoline, and building materials edged up 0.1% after a 0.2% increase in August (revised down from 0.5%). Motor vehicles and parts climbed 1.7% last month. Gas station sales fell 3.2%. Small declines were registered in electronics, building materials, food, general merchandise and non-store retailers. Clothing rose 0.9%, as did sporting goods, with furniture prices up 0.6%. Health care costs were unchanged.

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

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


John Knobel
Senior Currency Strategist
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 October 2015.

CURRENCY MOVERS OF 15th October 2015.

EURUSD, Daily

EURUSD daily price is currently testing the upper end of my predicted price path range (1.1090 – 1.1460). Ideally, a solid close above the 260 period SMA (1 year moving average) could indicate a possible trend reversal on the EURUSD. The next major daily resistance is now at 1.1560, however there still remains the possibility of a failed upward break that could shift the control back to the short sellers for a retest of the 1.1340′s , 1.1280′s and the 1.1090′s in extension. From a technical standpoint the EURUSD continues to look overextended, the technical trader should be reminded that just because the stochastic oscillator is in overextended territory that does not indicate an immediate fall in price, on the contrary, it is not uncommon that in a strong uptrend that an oscillator could remain overextended while price continues to advanced. My conclusion for short term traders is to add long positions on dips for targets between the 1.1460’s and 1.1560’s.

In the event that the ECB can not meet its inflation objective, the European Central Bank may make a move to extend QE, according to the Bank of Spain deputy governor Restoy.

Crude overnight hit near $45.90, down from yesterday’s $46.91 peak , crude moved lower after the close on Wednesday, as the API reported a huge 9.3 mln bbl weekly stock build, the largest in six-months. Some of the inventory rise was attributed to falling refinery operating rates, as API reported a 5 mln bbl fall in gasoline supplies for the latest week.

Stock markets have been moving higher as weak economic data continues to hit the news wires, with U.S. negative data on ex-auto retail sales and PPI, a deterioration of Japanese manufactures, and the unexpected dip in Australian employment all giving some relief for stock investors since it adds to the possibility of a delay in a U.S. interest rate raise, while increasing the risk that the ECB will proceed with additional QE in order to boast the Eurozone.

Currency Movers Charts

The EUR fell following the mix of data, which revealed a 40-plus year low in jobless claims, a slightly hotter core CPI reading, and an improvement, though less than expected in the Empire State index headline.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• AUD Employment Change: Australian employment had an unexpected dip coming in at -5.1k while it was expected to come in at 7.2k.

• USD Consumer price Index: CPI sank 0.2% in Sep, in line with median -0.2%; core +0.2%, above med 0.1%. There were no revisions to August which posted a 0.1% headline decline, with the core rate edging up 0.1%. On an annual basis, the headline index was unchanged versus 0.2% y/y, while the ex-food and energy component rose to a 1.9% y/y from 1.8% y/y. Energy prices skidded another 4.7% following a 2.0% decline in August. Transportation costs dropped 2.3% from -1.3%. Food/beverage prices edged up 0.4% from 0.2%. Services costs rose 0.2% from 0.1%. Housing were up 0.3% from 0.2%. Apparel slipped 0.3%, reversing the 0.3% gain in August. Commodities were down 0.8% from -0.4%. Tobacco prices declined 0.1% following a 0.5% gain in August.

• USD Initial Jobless Claims: U.S. initial jobless claims fell 7k to 255k in the week ended October 10, matching the lowest since 1973.from a revised 262k in the prior week (was 263k). That brought the 4-week moving average to 265.0k from 267.25k (revised from 267.50k). Continuing claims fell 50k to 2,158k in the October 3 week, versus a revised 2,208k (was 2,204k), the lowest since December, 1973.

• USD Empire State Index: NY Empire State index rebounded to -11.36 in Oct, below median -8.0 vs -14.7.

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

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

John Knobel
Senior Currency Strategist
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 : 16th October 2015.

CURRENCY MOVERS OF 15th October 2015.

AUDUSD, Daily

As expected the pair rallied from the 0.6938 support. AUD has now been trading at resistance and just recently failed to stay above the daily Bollinger Bands. The 100 period SMA has been limiting the upside in the occasions while the September pivotal high at 0.7280 has been supporting price yesterday and today. Price is now trading at 0.7263. A close below 0.7266 would make yesterday’s candle a pivot and a lower high. This looks likely. A break below 0.7200 would open a way to the 0.7020 support. If 0.7200 fails to support price look for reversals in 0.6938 – 0.7020 range for long trades and 0.7344 - 0.7382 for short trades.

AUDJPY, Daily

With AUDUSD rallying the AUDJPY moved higher as well. The pair hit resistance at 88.65 and reversed after trading outside the Bollinger bands. Now price action is taking place inside Bollinger Bands and the pair is fluctuating near 50 day simple moving average. There is some support at 86.08 but the 4h chart reveals a lower high after price reacted lower from a 30 period SMA and increases the chances price will break below this support. This would make the 82.88 – 84.29 a reasonable target level. Look for bullish reversals inside this range while 87.80 – 88.65 is a range for bearish reversals.

MACRO EVENTS & NEWS

FX News Today

Bund futures are outperforming and yields heading south, while Eurozone spreads narrow, as weak inflation numbers bolster hopes of further ECB easing. Pressure on Draghi to at least set the stage for a widening or extension of the QE program next week are mounting amid the uncertainty about the global growth outlook. Nowotny’s comments yesterday that even core inflation is clearly below target further fuelled speculation of additional measures, although the Austrian central bank head called for structural reforms rather than hinting at ECB action.

The Eurozone posted trade surplus of EUR 19.8 bln in August, down from EUR 22.4 bln in the previous month. Exports were up 6.0% y/y in August, versus nominal import growth of 3.0% y/y, although considering that lower oil prices are suppressing the nominal import bill, real import growth will have been higher.

Eurozone final CPI was confirmed at -0.1% y/y, in line with the preliminary number and down from 0.2% y/y in the previous month. The breakdown confirmed that the drop back into negative territory was driven by a sharp decline in energy prices, which were down -1.7% m/m and -8.9% y/y, versus -7.2% y/y in August. Core inflation remains much higher at 0.9% y/y, but as Nowotny highlighted yesterday, this is also considerably below the ECB’s 2% limit for price stability. So more arguments for the doves at the ECB although the amount of stimulus in the system is already substantial and while central bankers want to keep markets happy they also seem wary of additional action, especially as monetary policy alone can’t fix the Eurozone’s problems.

Main Macro Events Today


• Canada Manufacturing: We expect shipments, due today, to tumble 1.5% m/m in August after the 1.7% gain in July. A 3.6% plunge in exports values provides a compelling reason to forecast a pull-back in manufacturing shipments during August.

• US Industrial Production: September industrial production data is out Friday and we expect a 0.2% (median -0.2%) headline decline for the month which follows a 0.4% decline in August. This would bring capacity utilization down to 77.3% from 77.6% in August. The September employment report was weak and we saw declines in hours worked as well as employment in both manufacturing and mining which will likely weigh on the release.

• US Michigan Consumer Sentiment: The first release on Michigan Sentiment is out on Friday and should reveal a headline increase to 89.0 (median 88.4) from 87.2 in September. The already released IBD/TIPP poll for October improved to 47.3 from 42.0 in September and the Bloomberg Consumer Comfort survey is poised to average 45.0 for the month.

EURUSD UPDATE

EURUSD, Daily

EURUSD sold off in the wake of mixed U.S. data that highlighted a 40 year low in U.S. jobless claims, slightly better core CPI reading, and a small improvement in the Empire State index. The EURUSD market sell off yesterday was a standard knee jerk reaction to the headline positive jobless claims, which saw renewed interest in buying the USD. Technically, the sell off was expected, as momentum indicators have been signaling that buying interest in the EURUSD has been slowing with the stochastic oscillator reading as overextended. Price now sits around the 1.1370′s, and I expect this area to hold, unless today’s U.S. release of the UoM Consumer Sentiment comes in above expectations. The 1.1370′s also happens to be the 38.2% Fibo from the July low (1.0808) – August High (1.1713), so I would expect price support around current levels. My conclusion for the short term trader is to add long positions above 1.1370 for targets between the 1.1460′s and 1.1560′s.

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

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

Janne Muta
Chief Market Analyst
Hot-Forex
&
John Knobel
Senior Currency Strategist
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 October 2015.

CURRENCY MOVERS OF 19th October 2015.

AUDUSD, Daily

AUDUSD 5-day change is lower against other major currencies in what seems to be a pause in the recent price rally from the September 29th low (0.6936) to the Oct 12th high (.7380). Daily technical observations spots a bullish 10,50 SMA cross, consecutive higher tops and bottoms on price from September 4th – October 12th (0.69 L / .7380 H ) and the fact that current price is trading above the 10,50 SMA brings me to the conclusion that price remains in a short term uptrend. If today’s low on price holds above the 0.7230 area this could create a lower top above last week’s low (0.72) that may open up the way towards 0.7380; my ultimate short term price objective near 0.7440. However, traders should be on alert for any break below the 0.72 support that may support a deeper price retracement from the September Low to October’s current high with relevant support in this case spotted around the 0.71-0.7110′s.

GBPAUD, Weekly

GBPAUD weekly chart analysis, price touched a six year high at 2.24 late August and since has made a series of lower tops on price. Current price is trading below both the tentative downward slopping trend line, and the 10 period SMA. Stochastic oscillator analysis spots a bullish cross below the 20 line indicating a possible pause in the current downward price direction. My conclusion for the weekly chart trader is to sell into any strength higher up from current price, ideally near the 2.14 area for a 2.03 target.

FXPAIR : GBPAUD
SUPPORTS: 2.03
RESISTANCES: 2.24

ECONOMIC WEEK AHEAD

Main Macro Events This Week

* United States: Housing releases dominate the economic calendar. The sector has disappointed with relatively moderate growth despite the improved job market and still low mortgage rates. This week’s reports aren’t likely to alter that assessment. The NAHB homebuilder sentiment index (Today) is projected steady at 62 in October, the best level since 2005. September housing starts (Tuesday) are seen edging up to a 1.130 mln pace, rebounding from a 7.1% cumulative decline in July and August. Existing home sales for September (Thursday) are projected rising 1.7% to a 5.40 mln clip to unwind part of the 4.8% August drop. The August FHFA home price index (Thursday) and weekly MBA mortgage numbers (Wednesday) are also slated. The only other report of note is the flash Markit manufacturing PMI for October. Chair Yellen (Tuesday) will give brief welcome remarks at a Labor Department event. Governor Brainard (Today) will discuss removing unnecessary regulation. Dudley and Powell (Tuesday) are speaking at a money market conference. And Governor Powell will also speak on market liquidity.

* Canada: The Canadian calendar is highlighted by the Bank of Canada’s rate announcement (Wednesday) and the Monetary Policy Report. We expect no change to the current 0.50% setting, alongside a cautiously constructive outlook for growth and inflation that is supportive of no change in rates for an extended period. The Federal election will be held today. As for economic data, the September CPI is seen slowing to a 1.2% y/y pace, but with a flat month comparable reading as a drop in gasoline prices competes with the typical seasonal jump in clothing prices. The Bank of Canada’s core CPI is expected to nudge higher to a 2.2% y/y rate in September following the 2.1% clip in August. Retail sales are expected to rise 0.2% in August after the 0.5% gain in July. Wholesale shipments (Tuesday) are seen rising 0.3% in August after the flat reading in July.

* Europe: All eyes will be on the ECB this week. Eurozone inflation is back in negative territory and uncertainty about the global growth outlook is rising, which is putting intense pressure on Draghi to extend or expand the QE program. However, the ECB has already provided an unprecedented amount of stimulus and the measures have eased credit conditions and bolstered confidence. Inflation is expected to pick up again toward the end of the year and with domestic demand robust, we don’t see the risk of a deflationary spiral. What the Eurozone needs are structural reforms, not an ever-easy policy stance. And in this situation, Draghi is likely to maintain the wait and see approach, at least for now, although his comments are likely to be sufficiently dovish to keep markets happy, even if a steady hand policy will likely disappoint some and push up yields, at least temporarily. The economic calendar this week focuses on preliminary PMI readings for October (Friday), which we expect to show a further slowdown in the pace of expansion in both services and manufacturing. The EMU’s manufacturing reading is seen falling to 51.7 from 52.0 and the services reading to 53.4 from 53.6 in the previous month. Preliminary Eurozone consumer confidence numbers for October are also expected to head south with growing concerns about the global growth outlook starting to spook consumers. The Eurozone also has BoP and current account data, Italian orders numbers and German PPI inflation.

* United Kingdom: The week ahead is pretty quiet, which will leave the focus of sterling markets on external data and developments and Chinese growth data. UK government borrowing (Wednesday) is the first data of note, followed by official retail sales data for September (Thursday).

* China: Growth was expected to slow to a 6.5% y/y pace, from the 7.0% clip seen in Q1 and Q2 but came in at 6.9%. The figure fell short of the 7.0% official forecast, but was so slight that the damage on global market sentiment remained negligible. Even the bigger drop was not expected to weigh on stocks due to the “good news is bad news” psychology and hopes of more PBoC stimulus. The better than expected data may not help sentiment much though, as the Chinese data are often viewed to be doctored. September industrial production (Today) is forecast to dip to 6.0% y/y from 6.2% in August. September retail sales (Today) are penciled in at 10.7% y/y gain, down slightly from the prior 10.8% outcome.

* Japan: In Japan, the September trade report (Wednesday) also is eagerly awaited for growth insights though balance is likely to be impacted significantly by weakness in imports (y/y) amid low energy prices. Indeed, the JPY 569.4 bln August deficit is expected to reverse sharply to a surplus of JPY 50 bln. The pace of export growth is seen holding steady, though the increasingly sluggish growth in the region may limit exports as well. The August all-industry index (Wednesday) is expected to fall 0.4% m/m, as compared to the prior 0.2% gain.

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


Janne Muta
Chief Market Analyst
Hot-Forex
&
John Knobel
Senior Currency Strategist
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 : 21st October 2015.

CURRENCY MOVERS OF 21st October 2015.

EURUSD, Daily

EURAUD Daily, the AUD has given back some recent gains against the majors over the last few trading sessions, leaving the outlook for the AUD to continue a narrow trade range as concerns about inflation subside, while commodities seek out a bottom. Technically, the Daily EURAUD observations include: bearish 10,50 SMA crossover spotted, price trades within a downward slopping trend channel, and stochastic oscillator indicates positive upward momentum. My conclusion for the Daily supports long positions with a price target near the 1.5840 inside swing area.

Main Macro Events Today

• Bank of Canada Rates Decision: No change is expected to the 0.50% rate setting in today’s announcement. Economic data has been consistent with a return to GDP growth in Q3 after the oil price shock left back to back erosion in Q1 and Q2. The Bank’s Q3 GDP estimate of 1.5% is destined for a substantial upward revision (we see a 3.0% gain) in the Monetary Policy Report. But reduced global and U.S. growth prospects promise to trim the 2.3% estimate for 2016 GDP (we see 2.2%). Hence, we expect the growth and inflation outlook to back expectations for no change in rates for an extended period.

• USD Empire State Index: NY Empire State index rebounded to -11.36 in Oct, below median -8.0 vs -14.7.


FX News Today

Japan’s trade deficit narrowed 88.1% y/y to 114.5 bln JPY from a revised -569.4 bln JPY (was -569.7 bln JPY). Imports dropped 11.1% y/y, while exports edged up 0.6% y/y. The latter was the slowest pace in more than a year as shipments around Asia softened, with those to China dropping 3.5%. Exports to the U.S. were strong, however, up more than 10%, largely on autos and pharmaceuticals. On the month the deficit widened 4.8% with exports down 1.7% for a third straight decline, while imports fell 1.9%, a second consecutive monthly slide. The Nikkei is higher on the day as the trade data increases hopes for more stimulus.following a 0.5% gain in August.

Bund futures already recovered opening losses and are rising in tandem with Gilts and stock markets. Volatility has returned ahead of the ECB meeting tomorrow. Japanese trade numbers boosted hopes of further stimulus in Japan and reminded European markets that even if the ECB continues to sit on the fence tomorrow, this doesn’t mean the end for an expansion of the QE program. Most analysts expect Draghi to announce a move in December.

• Canada’s election and the economy: The liberal majority victory provides some solace to a market that was prepared for a minority government and all the lack of certainty that vote by vote coalition gathering brings. Of course, a Trudeau majority victory brings a greater tolerance for Federal deficits. Harper ran deficits after 2009′s global upheaval but had been focused on bringing finances back to balance. Trudeau, in contrast, campaigned on running modest (C$10 bln) deficits for the next three years to finance infrastructure projects in a bid to boost Canada’s flagging economy. We would point out that the extended time lag between approval and actual construction typically precludes infrastructure “investment” from having any impact on the economy in the near-term. Meanwhile, Trudeau plans to fund tax cuts for middle income earners by raising taxes on the top 1%. As for the corporate tax rate, Trudeau said during the campaign that the current 15% is “fine.”

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

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


Janne Muta
Chief Market Analyst
Hot-Forex
&
John Knobel
Senior Currency Strategist
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 October 2015.

CURRENCY MOVERS OF 22nd October 2015.

EURUSD, 240 min

The sideways move over the last three days has been a reflection of both market participants’ carefulness ahead of ECB meeting and the fact that the pair is trading between support and resistance levels. ECB leaders gather today in Malta and Mario Draghi will be speaking on European economy. We do not expect the ECB to announce new QE measures today. This expectation is in line with the analyst consensus. Inflation is below ECB target but Draghi has expressed satisfaction on increased lending in the Euro area. This suggests no need for new QE measures.

At the time of writing EURUSD is trading at a support created by previous pivot highs and 50% Fibonacci retracement. The 100 period SMA coincides with this support while the Stochastics Oscillator points to the pair being oversold in both the 4h and daily time frame. The last week’s bearish pin bar together with the upper weekly Bollinger Bands has been limiting the moves to the upside. Nearest support and resistance levels are at 1.1295 and 1.1388. The support can be found at 1.1260, a 61.8% Fibonacci level which coincides with 50 day SMA. Look for a move higher towards the 1.1388 resistance if no new QE promises or measures are introduced.

MACRO EVENTS & FX NEWS

Main Macro Events Today

• ECB Rates Decision: ECB seen on hold, focus on presser. We expect the central bank to stay on hold today, as does the overwhelming majority of analysts in the latest Bloomberg survey, with only one expecting further easing measures already this week. This does not mean that an extension or expansion of the QE program will be off the table however and Draghi’s comments at the press conference will likely strike a fine balance between justifying the current wait and see stance and assuring markets that the ECB is ready and willing to act again if necessary. Comments suggest that the low inflation environment is once again becoming a concern and December, when the updated set of economic projections is due, will become a major focal point for a decision on additional steps.

• US Initial Jobless Claims: Claims data for the week of October 17 is out today and should reveal an increase to 264k (median 265k) from 255k last week. We expect the average for October to be 270k from 269k in September. This supports our call for a 190k employment headline which would follow a 142k increase in September.

• US Existing Home Sales: September existing home sales data today should reveal a 1.7% increase to a 5.400 mln (median 5.350 mln) headline following a 5.310 mln August figure and 5.580 mln in July which set a high back to 2007. Other housing measures are coming in mixed for the month with the NAHB holding steady at 61 in September, starts rising to 1.206 mln but permits slowing to 1.103 mln.


FX News Today

French business confidence mixed, with the overall headline number unexpectedly rising to 101 from 100, but manufacturing confidence falling to 103 from 104 and the production outlook indicator slumping to 2 in October, while the September reading was revised down to 5 from 7 reported initially. The own company production outlook held up better, with the reading declining only slightly to 13 from 14 in the previous month, highlighting that concerns about global developments and the slowdown in emerging markets rather than actual weakness at company level are the main factors.

Bank of Canada Constructive on Growth as Forces Awaken. The Bank of Canada maintained the 0.50% setting for the overnight rate target, matching widespread expectations. While the growth projections for 2016 and 2017 were trimmed, the outlook remains constructive as the projected recovery in Canada’s economy takes hold. The return to full capacity was moved ahead to mid-2017 but Governor Poloz explained that the shift was within the range anticipated in July. The bank is comfortable with the current state of policy and the economy, content to remain on the sidelines as the forces unleashed by 50 basis points in rate cuts in the first half of this year continue to ease the adjustment to lower oil and commodity prices.

BoC Poloz praised the constructive evolution of the economy, answering a question on just how high the debt to income ratio can go. He noted that Canada does not have much experience with ratios this high, but that other countries run higher ratios (not that he’s saying higher ratios are ok, he added). But he is pleased the Bank identified the right forces in the economy when things were uncertain in January. Those forces continue to growth, he noted, and the constructive evolution gets the economy back to better growth. On the CAD, he said the currency has been moving roughly in-line with the terms of trade (ToT), which it has done historically. He noted that “roughly” comes with lots of advisement, as the zone around ToT movements is not trivial. Further solidifying his status as one of the most entertaining of the current crop of central bankers, he likened these moves to walking a dog with a stretchy leash — you get footprints (from the dog) that are not straight like a railroad track. His Q&A has ended.”

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

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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 : 27th October 2015.

CURRENCY MOVERS OF 27th October 2015.

EURUSD, Daily

EURUSD failed to hold above its weekly uptrend line on a clean break below the 1.11 resistance. Now that the 6 month uptrend-line has been lost, we need to see if the 1.0990 low, as seen last week, will be retested before price makes an attempt towards 1.11 and possible 1.1170 in a return move. Momentum analysis remains towards the downside, although, I would expect to see some short term buying interest if the Stochastic can create a bull cross near the Stch.Os. 20 line. My multi-day conclusion on EURUSD price action is for a retest of Friday’s low (1.0996) before a return move towards 1.11 –1.1170.

MACRO EVENTS & FX NEWS

Main Macro Events Today

• GBP U.K. Gross Domestic Product: U.K. GDP numbers for Q3, with the quarterly growth rate expected to slow to 0.6% (med same) from 0.7%.

• USD Durable Goods Orders: September durable goods data is out today and should reveal a 0.8% (median -1.0%) decline for orders on the month with shipments unchanged and inventories growing by 0.1%. This compares to respective August figures of -2.3% for orders, -0.2% for shipments and unchanged for inventories. Data in line with analyst forecast would leave the I/S ratio for the month at 1.66 from 1.65 in both August and July.

• USD Consumer Confidence: October Consumer Confidence is out today and should reveal a 104.0 (median 102.8) headline, up from 103.0 in September and 101.3 in August. Other confidence measures have improved in October with Michigan Sentiment rising to 92.1 from 87.2 and the IBD/TIPP Poll rising to 47.3 from 42.0.


FX News Today

Greek bailout payment delayed, Greece is once again behind in the implementation of the agreed reforms and so far only 14 of the 48 “milestones” have been implemented. A delay of the reform plan and the payout likely also means a delay in the reform of the banking and finance system, including the recapitalization of banks.

Commodities were on the defensive, but the CAD was range bound near 1.3160 since the open. The lack of price action came as oil prices were steady near $43.5 – $44.00 and as the risk backdrop remains quiet.

USDJPY given back some gains, the pair has gained considerable ground since last week, as the dovish ECB and the aggressive PBoC combined to rally the dollar broadly. With the China rate cut having many market players up the BoJ’s ante to add to QE this week, USD-JPY gains may well hold.

Gold been relatively steady,

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

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


John Knobel
Senior Currency Strategist
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 : 28th October 2015.

CURRENCY MOVERS OF 28th October 2015.

The AUD is broadly weaker against the majors in the wake of disappointing CPI data.
The CAD is higher even though the BoC’s Lane did not offer anything new on policy or the economy, as expected.
The USD, EUR and GBP are mostly unchanged ahead of today’s start of the FOMC meeting.

AUDUSD, Daily

Price looks to retest .7160 before continuation of its downtrend for a 0.7162 target in the immediate short term. Price has broken down through recent lows at .7200. Targets further out could be near 0.7100 and 0.7020. However attempts to form a higher low near 0.7260 could signal a potential recovery towards the .7400′s.

FX Pair : AUDUSD
Supports: 0.7063
Resistances: 0.7260

USDCAD, Daily

Stochastic Oscillator analysis is starting to turn bearish. The medium term risk of a deeper retracement of the May to September 1.1922-1.3454 advance to a minimum of 1.2658-88 and possibly 1.2507-61 is possible; provided we get a solid break below the recent upward trend line. The longer-term trend does remain up. However, for the short term daily trader, I would expect any downward movement to stop near the 1.3180 – 1.3045 levels.

Main Macro Events Today

• USD Goods Trade Balance: The trade deficit has narrowed sharply since recent-highs early in 2012, and hovered close to levels seen in 2009 before the recent string of widening deficits that peaked in April. The September trade deficit is expected to contract 2.7% to -$47.0 bln after expanding 15.6% to -$48.3 bln in August. Exports in September are expected to decline 0.2% while imports show a 0.7% decrease on the month. The U.S. current account deficit narrowed to -$109.7 bln in Q2 from the -$118.3 bln deficit in Q1. Its expected for the deficit to be -$102 bln in Q3.

• USD FOMC Statement: Few expect any move from the Fed this year, let alone in the off-month of October.

• USD Consumer Confidence: The New Zealand Institute of Economic Research’s (NZIER) Shadow Board is sending the Reserve Bank (RBNZ) ahead of its Official Cash Rate (OCR) review today . The Board, comprised of nine economists and business leaders, is calling for RBNZ Governor Graeme Wheeler to leave the OCR at 2.75%. Wheeler has cut the OCR by 25 basis points on three occasions this year, indicating in his September Monetary Policy Statement, “Some further easing in the OCR seems likely”. NZIER senior economist Christina Leung recognizes that while inflation is very subdued at 0.4%, the economy will receive a boost.


FX News Today

The AUD provided the main action in overnight trade, the AUDUSD fell around 80 pips in making a three-week low at 0.7111, taking out its 50-day moving average at 0.7138 on route.

German GfK consumer confidence declines, confirming the downtrend in recent months. The low interest rate environment is making savings increasingly unattractive. At the same time, income expectations may have remained steady over the month, but have come down markedly since the summer and with business cycle expectations now in negative territory consumers are clearly starting to get concerned about the outlook.

German import price inflation weaker than expected, this continues to be driven by lower oil prices and the annual rate excluding oil related products remains in positive territory. Lower than expected import price inflation will gradual feed through to headline CPI numbers and therefore add to the arguments of the doves at the ECB, with the updated set of staff projections in December likely to bring another adjustment in inflation projections and delivering Draghi the justification for additional easing.

Australia Core CPI was below projections, putting perhaps some pressure on the RBA to ease again. CPI increased 0.5% in Q3. Australia CPI grew at a 1.5% y/y rate, matching the 1.5% y/y rate in Q2. CPI grew at a 1.3% y/y clip in Q1. Total CPI has run below 2.0% since Q4 of 2014, which was a 1.7% rate. The trimmed mean CPI slowed to a 2.1% y/y pace from a 2.2% y/y pace in Q2 and a 2.3% rate in Q1. The weighted median CPI expanded at a 2.2% y/y rate in Q3 after the 2.4% y/y clip in Q2 and the 2.5% clip in Q1.

Japan retail sales fell 0.2% y/y in Sep, September retail sales fell 0.2% y/y after rising 0.8% y/y in August. On the month sales edged up 0.7% versus unchanged previously. Large retailer sales slowed slightly to a 1.7% y/y pace from August’s 1.8%. (28-Oct). Household spending, or PCE rebounded 2.9% y/y in August after falling 0.2% y/y in July, and versus -2.0% y/y in June. (Aug 28). Consumer Confidence (SA) fell to 40.3 in July from 41.7 in June and 41.4 in May. (Aug 10).

Bank of Japan to Expand Stimulus[B/], Slowing inflation growth alongside and a mixed domestic growth backdrop provide the Bank of Japan with the backing to expand already ample policy accommodation. The rate cut by China’s central bank and dovish guidance from the European Central Bank have stacked the deck in favor of further easing measures from the Bank of Japan, as we expect them to pursue a more is better approach to policy.

FOMC likely to hold firm with minimal changes to outlook[B/], The FOMC meets today and tomorrow and there is virtually no chance for any changes in policy. But the policy statement will be scrutinized for any indications that December will be the start of the tightening process. It’s still the case that only the employment mandate is being met, while inflation is still lagging. But weakness in recent real sector data, including today’s September durables report, along with renewed erosion in commodity prices, and the firmer dollar, argue against accelerating growth and don’t suggest inflationary pressures will be on the rise anytime soon. Look for the Fed to modify its language, perhaps shifting its characterization on the economy from moderate to modest. It’s likely to downshift slightly its view on the labor market after say it’s “continued to improve” in the September statement. On inflation the Fed can reiterate it’s running below forecast, while market based measures have moved lower too. These factors put the FOMC in a difficult spot credibility-wise, especially those policymakers who are anxious to tighten now, as data are leaning to the contrary. Policymakers can’t be encouraged by the Q slowdown abroad either, and the more accommodative postures from the ECB, PBoC, and probably the BoJ, keep the Fed in a bind too.

Gold been relatively steady,

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

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


John Knobel
Senior Currency Strategist
********


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 : 2nd November 2015.

CURRENCY MOVERS OF 2nd November 2015.

Main Macro Events This Week

United States: There are several crucial economic reports this week, including nonfarm payrolls, vehicle sales, ISMs, and trade. The October employment report due out on Friday will be the week’s main event. The unemployment rate is forecast dipping to 5.0% from 5.1% previously, another multi-decade low. Also of importance is October ISM manufacturing figures on Monday and the services data on Wednesday. The manufacturing index is estimated edging up to 50.5 from 50.2 in September, though that’s just barely in expansionary territory. The non-manufacturing index is expected to rise to 57.0 from 56.9 as solid growth is seen accelerating a bit. Vehicle sales on Tuesday are expected to inch lower, however, after strong sales through the summer. Trade figures for September on Wednesday should show sharp narrowing in the deficit to a -$41.5 bln gap, from -$48.3 bln in August, given the drop in the goods deficit posted last week. Q3 productivity on Thursday is seen at unchanged for the preliminary report, from the 3.3% Q2 pace. Unit labor costs should rebound to a 2.5% rate in Q3, versus Q2′s -1.4%. Other data include October ADP private payrolls on Wednesday, construction spending for September also on Monday, September factory orders on Tuesday, and September consumer credit to be released on Friday.

• Canada: Key reports this week from Canada, with September trade and October employment on the schedule. The September trade balance on Wednesday is expected to narrow to -C$1.9 bln in from the -C$2.5 bln shortfall in August. Employment on Friday is expected to improve 10.0k in October after the 12.1k gain in September. The unemployment rate is seen at 7.1% in October, matching the 7.1% rate seen in September. The Ivey PMI on Thursday is projected to improve to 55.0 in October from the seasonally adjusted 53.7 in September. Building permits on Friday are anticipated to grow 1.0% in September after the 3.7% drop in August. The RBC manufacturing PMI for October is due Monday. Results in line with analyst estimates, especially on trade and employment, would be supportive of the Bank of Canada’s constructive view on the growth and inflation outlook as detailed in the October Monetary Policy Report.

• Japan: The October Markit/JMMA PMI on Monday is expected to slip to 51.0 from 51.2. Auto sales are also on tap. The markets are closed Tuesday for the Culture Day holiday. The calendar does not pick up again until late in the week with the BoJ minutes to the October 6, 7 meeting on Thursday. Preliminary September leading and coincident indices on Friday should show the former down 1.3% m/m from the prior -1.5% reading, while the latter is expected to come in at -0.7% m/m from -0.9% in August. In addition, eyes will be peeled for news on a rumored Japanese government special stimulus budget, which made the rounds last Friday following the BoJ’s inaction on the QE front.

• China: The Caixin/Markit series released today improved slightly to 48.3 from 47.2. October services PMI out on Wednesday is likely to improve to 50.7 from 50.5.

• Australia: The calendar for Australia features the RBA on Tuesday, which is expected to maintain the current 2.00% policy setting, although the slowing in core CPI during Q3 revealed last week opened the door to a possible rate cut. As for economic data, the trade deficit on Wednesday is expected to narrow to -A$3.0 bln in September from -A$3.1 bln in August. Retail sales on Wednesday are seen rising 0.3% in September after the 0.4% gain in August. Building approvals on Monday expanded 2.2% in September after the 6.9% drop in August. The RBA’s quarterly Statement on Monetary Policy due out on Friday will update the bank’s growth and inflation projections.

• New Zealand: The calendar features the Q3 employment report on Wednesday. It’s expected for HLFS employment to rise 0.5% in Q3 (q/q, sa) after the 0.3% gain in Q2. The unemployment rate is seen rising to 6.0% in Q3 from 5.9% in Q2.

• Europe: This week’s reports are unlikely to change the macro outlook fundamentally for the Eurozone . The services index is out on Wednesday. Economic activity continues to expand, and on the whole, confidence readings have surprised on the upside in October, which shows the recovery remains on track. German manufacturing orders on Thursday are also expected to have rebounded in September, after falling sharply in August. German industrial production on tab for Friday is seen up 0.4% m/m , after falling 1.2% m/m in August — the September drop in orders likely will prevent a more pronounced rebound. Eurozone retail sales are also due out on Thursday.

• UK: October editions of PMI survey data, along with September production numbers are on tap. There also is the November BoE Monetary Policy Committee meeting (announcing Thursday). An expected uptick in the services index should help stabilize the composite reading. Its expected that the services PMI released on Wednesday to rebound from September’s 29-month low at 53.3, anticipating a 54.4 outcome. The manufacturing PMI today is expected at 51.3 after 51.5 in the previous month. Production data is expected to show a -0.1% m/m dip in the industrial output figure, while the narrower manufacturing number is expected at +0.6% m/m.

FX News Today

The GBP is slightly higher, against the EUR and USD after a much stronger than expected U.K. Manufacturing PMI reading. The unexpected jump in the manufacturing PMI, which has lowered the chances that the BoE will remove its implicit tightening bias. Gains against EUR, JPY and USD are modest however.

Eurozone manufacturing PMI, All Eurozone PMI readings apart from Greece are above the 50 point no change mark and even in Greece, confidence is improving further. Still, while the numbers signal a slight uptick in manufacturing output at the start of the last quarter, growth in the manufacturing sector is hardly buoyant and the sector is feeling the strain from the slowdown in emerging market economies, most notably China.

Eurozone stock markets are higher, the FTSE 100 is underperforming and posting slight losses, despite much better than expected PMI readings.

Worries over China’s growth, the official manufacturing PMI held steady at 49.8 in October, disappointing expectations for a bounce back to the 50.0 expansion-contraction line. It’s a third straight sub-50 reading. The non-manufacturing index slipped to to 53.1 from 53.4, still reflecting expansion but is the slowest pace since December 2008.

Greek banks need EUR 14.4 bln recapitalization, the ECB said in its Asset Quality Review, published Saturday, that Greek banks need at least EUR 4.4 bln from shareholders and bondholders to meet the shortfall identified under the current baseline macroeconomic assumptions.

Turkish lira soars, with stocks on Erdogan election success. The currency jumped the most since 2008 according to Bloomberg calculations after Erdogan’s AK Party won the second election this year. This ends months of political deadlock and gave a boost to stocks, as well as bonds, with 10-year yields dropping to the lowest level in three months.

Main Macro Events Today

• GBP U.K. manufacturing PMI: Jumped to 55.5 in October from 51.8 in September. A much stronger than expected reading and in fact the highest since June last year. The new orders number jumped to 56.9 from 52.9 in the previous month and is at the highest level since July 2014. GBP is slightly higher against EUR and USD and the Gilt contract has extended losses on the strong number that will back the arguments to maintain the BoE’s tightening bias.

• EUR Markit Manufacturing PMI: EMU Oct manufacturing PMI revised up to 52.3 from 52.0 reported initially and versus 52.0 in the previous month. National readings had been mixed, but with Spanish and French numbers slightly lower than expected, while the Italian reading surged higher and the German PMI was revised up markedly with the final release.

• USD ISM Manufacturing PMI: The manufacturing index is estimated edging up to 50.5 from 50.2 in September, though that’s just barely in expansionary territory.

• CAD RBC Manufacturing PMI: If the results are in line with consensuses, especially on trade and employment, this would be supportive of the Bank of Canada’s constructive view on the growth and inflation outlook as detailed in the October Monetary Policy Report.

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

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


John Knobel
Senior Currency Strategist
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 November 2015.

CURRENCY MOVERS OF 3rd November 2015.

• The USD within the last 5 days’ of trading is lower across the board, in the wake of the latest US economic data that could be viewed by some market analysts that the Fed will continue to hold off again on any move on rates. However, the latest data does contradict the FOMC statement that hinted at a potential rate hike as early as December. For the time being, the market expectation looks to remain a mixed bag. The ISM manufacturing PMI in October inched down to 50.1 from 50.2 in the preceding month, the ISM headline missed the mark, and the Atlanta Fed’s GDP for Q4 fell to 1.9% from 2.5%, last forecast on Friday. The USD market will now focus on the U.S. Non-farm Payroll report due out on Friday.

• The AUD is attempting to break a recent downtrend, as the RBA held rates steady at 2.00%, matching expectations. The central bank also noted that “growth in output had continued at around the average pace of recent years” and that while global trade was “subdued” it had “picked up recently,” although China was still seen as a main risk.

• The JPY has weakened against most of the majors, news that the Japanese government will put forward a supplementary budget of at least JPY 3 tln, has weighed on the yen. Given the weakened state of the Japanese economy further QE moves are expected from the Bank at some point. For now, USDJPY remains as a buy on the pullbacks.

AUDUSD, Daily

Technically, the recent bullish momentum on the AUDUSD pair should continue since stochastic analysis, as well as moving average indicators, point to a potential close above the downward slopping trend line. Should we see a solid price close above the downward trend line, I would expect to see sellers emerging around the 0.7260-0.7290 areas before the continuation of its downtrend for a 0.7062 target.

FX PAIR: AUDUSD
SUPPORTS: 0.7062
RESISTANCES: 0.7260

http://goo.gl/k79jdL/IMG]

USDJPY, Daily

The short-term trend is up as price is trading above the downward trend line (Aug – Oct), and price is above its 1 year moving average. Upside potential remains for a 121.80 target, on a break of 121.50, but losing 120.25 will point back towards 119.60.

FX PAIR: AUDJPY
SUPPORTS: 120.25/119.60
RESISTANCES: 121.50

MACRO EVENTS & NEWS

[IMG]http://goo.gl/94tWXV

FX News Today

The RBA left rates unchanged, which pushed the AUD up across the board, but that didn’t deter stock markets, which focused on the fact that the RBA still kept the door open for further easing.

The U.S. ISM slipped to a 50.1 low, the October ISM is at a new two year low of 50.1, with a drop in the employment gauge to a 47.6 six year low that reinforced the pattern of declining producer sentiment.

The U.S. construction spending report beat estimates, with a 0.6% September rise after boosts in the July and August levels, though the surprise included big boosts in the home improvement residual that doesn’t enter GDP calculations, and the remaining construction data signaled downside risk for the next Q3 GDP revision.

Canada RBC manufacturing PMI fell to 48.0, in October from 48.6 in September. The decline puts the index further below the previous multi-year low of 48.7 seen in February, leaving the weakest reading in this indicator’s short history going back to late 2010.

U.K. manufacturing PMI jumped to 55.5, in October from 51.8 in September. This was a much stronger than expected reading and in fact the highest since June last year.

Gold slipped to nearly one-month lows, now trading around $1,1137/ounce, after touching $1,132,66 overnight. The market continues to fret over last week’s FOMC statement, where fears of a December rate hike have weighed heavily on gold prices.

Crude oil prices declined from two week highs, following poor manufacturing PMI readings out of China, which suggest ongoing contraction in manufacturing activity in the world’s second largest oil consuming countries.

Main Macro Events Today

• AUD RBA Interest Rate Decision: RBA held rates steady at 2.00%, matching expectations. The statement was similar to last month, lacking clear guidance and sticking to a cautiously dovish tone that justifies prevailing policy settings while reminding that they have room to cut further if needed. They also maintained the shift to less-negative language about the Australian dollar (first seen in August) remarking that the currency was “adjusting to the significant declines in key commodity prices” versus the previous guidance that “further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.”

• GBP PMI Construction: The forecast calls for a 58.8 reading down from the last 59.9 number.

• ECB Presidents Draghi’s Speech: Eurozone markets will look for comments from ECB’s Draghi for a clarification of the policy stance after the president seemed to dampen easing hopes in comments from last weekend.

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

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


John Knobel
Senior Currency Strategist
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 November 2015.

CURRENCY MOVERS OF 5th November 2015.

EURGBP UPDATE

I wrote in yesterday’s analysis on EURGBP: At the time of writing the pair is trading at the supporting end of the wedge. This market is still in a sell the rallies mode with the nearest resistance levels at 0.7093 and 0.7105. The nearest 240 min support is at 0.7060 while the next daily support can be found at 0.7027.

Those that have been to my webinars knew exactly how to get into a short trade and had a low risk trade opportunity as EURGBP hit the 0.7093 resistance identified in the report. The pair hit the first support yesterday and after some consolidation has now resumed the downward momentum. Those that used the position management technique they have learned in the webinars have now a profitable and risk free trade. You are most welcome to join me to the webinars and learn how to find and trade these opportunities. Register now. It’s free.

Today is a so called super Thursday, a day when Bank of England publishes not only the interest rates decision but also the quarterly inflation report. No changes are anticipated from the BoE. As Governor Carney has pointed out on at least two occasions since mid-summer, the possibility of a rate hike will be in “sharper relief” at the end of the year, so the implicit tightening bias remains in place. Still, the minutes will be of considerable interest, along with the Quarterly Inflation Report, which will bring new projections on inflation and growth. We expect the minutes to reveal a 8-1 vote to keep the repo rate unchanged at 0.5%, with the lone hawk McCafferty maintaining his dissent for a quarter point hike for a fourth straight month.

The Inflation Report should reveal downward nudges to both inflation and growth forecasts in the nearer-term part of the forecast horizon following disappointing prelim Q3 GDP growth and an unexpected return to negative inflation readings in September.

MACRO EVENTS & NEWS

FX News Today

No changes are anticipated from the BoE. As Governor Carney has pointed out on at least two occasions since mid-summer, the possibility of a rate hike will be in “sharper relief” at the end of the year, so the implicit tightening bias remains in place. Still, the minutes will be of considerable interest, along with the Quarterly Inflation Report, which will bring new projections on inflation and growth. We expect the minutes to reveal a 8-1 vote to keep the repo rate unchanged at 0.5%, with the lone hawk McCafferty maintaining his dissent for a quarter point hike for a fourth straight month. The Inflation Report should reveal downward nudges to both inflation and growth forecasts in the nearer-term part of the forecast horizon following disappointing prelim Q3 GDP growth and an unexpected return to negative inflation readings in September.

Atlanta Fed’s GDPNow was revised up to 2.3% for Q4 compared to 1.9% previously following the surge on ISM Services to 59.1 in October: “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 2.3 percent on November 4, up from 1.9 percent on November 2. Following this morning’s Non-Manufacturing ISM Report On Business, the forecast for fourth-quarter real consumer spending growth increased from 2.4 percent to 2.7 percent while the forecast for real fixed investment growth increased from 3.0 percent to 4.3 percent.” Blue Chip median estimates have settled near 2.7% and this update closed the gap somewhat.

Implied Fed funds futures are suggesting about a 58% chance of a hike in December, versus about 52% at yesterday’s close, and 50% at the start of the week. Though the Fed Chair didn’t say anything new in her Q&A, the fact that she didn’t back down from the hawkish spin in the October policy statement, and that she reiterated the transitory nature of the soft trend in inflation added to market beliefs that the FOMC will pull the trigger this time. While the Fed must still monitor incoming data, unless the numbers are unambiguously weak, the FOMC can still tighten policy on the excuse that the figures are in line with their outlooks.

Main Macro Events Today

* US Initial Jobless Claims: Initial claims data for the week of October 31st is out today and should reveal a 257k (median 263k) headline from 260k in the week prior. Claims are continuing to strike a firm path and look poised to leave a month oaverage of 259k in October, down from 269k in September and 275k in August. Alongside the strength in claims we expect a better October employment report with a 190k headline.

* US Productivity: The first release on Q3 productivity should revel a 1.5% (median unchanged) decline following a 3.3% increasein Q2. Unit labor costs should be up 4.0% (median 2.3) after a 1.4% decline in Q2. Output is expected to by up 1.2% which compares to the Q3 GDP figure of 1.5%.

* Canada Ivey PMI: We expect the Ivey PMI to improve to 55.0 in October from 53.7 in September on a seasonally adjusted basis. Broadly, business sentiment remains under pressure as the economy continues to adjust to the oil sector contraction and global growth uncertainty. The RBC manufacturing PMI (released Monday) fell to 48.0 in October from 48.6 in September. The CFIB Business Barometer survey of small and medium sized business sentiment improved to 58.9 in October from a 56.0 level in September that was the lowest since April of 2009. Yet the CFIB’s index was well below the level seen in October of 2014.

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

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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 : 6th November 2015.

CURRENCY MOVERS OF 6th November 2015.


271K NEW JOBS INSTEAD OF 190K EXPECTED!

EURUSD, Daily

US nonfarm payrolls surged 271k in October from a revised 137k in September (was 142k) and 153k in August (was 136k) for a net 12k upward bump. These put the 3-month average at 187k. The unemployment rate dipped to 5.0% from the 5.1% over the prior two months. The labor force rebounded 313k from -350k previously, while household employment climbed 320k from -236k. The participation rate held at 62.4%. Average hourly earnings were up 0.36% from September’s unchanged. The workweek was steady at 34.5. Private payrolls jumped 268k with increases of 27k in the goods producing sector, 31k in construction, with manufacturing unchanged. Employment in the services sector climbed 241k with strength in business services, education, and trade/transport. The government added 3k. Start the countdown.

Surprise strong number send the USD higher against the currencies and Gold while European equity markets reacted higher. EURUSD traded almost down to 1.07 and is at the time of writing reacting a bit higher. This number increased the markets’ belief that the Fed will hike the rates in December. Therefore the previous support at 1.0837 should act as a resistance and we’ll be looking for short signals at the level should the market rally there next week. The nearest support is at 1.0666.

MACRO EVENTS & FOREX NEWS

FX News Today

The USD has remained firm; ahead of today’s all important NFP data. The data carries make or break potential with regard to the possibilities of the Fed initiating a rate lift-off in December, and with the unemployment rate widely anticipated to dip to a new cycle low of 5.0%, markets are positioned for this eventuality.

The BoE is clearly in no hurry to hike; the GBP hit a new low against the EUR after the BoE left the policy unchanged as widely expected. In addition, the minutes, released at the same time, showed an 8-1 majority in favor of steady policy. The tightening bias was left in place, but the bank did cut its near term forecasts for growth and inflation and clearly is in no hurry to start the first tightening cycle since 2007. In general, central banks seem to be in a holding pattern at the moment, with December being the next focal point. Until then, markets are likely to remain volatile.

German industrial production dropped; the data is much weaker than initially expected, but not a surprise after the slump in manufacturing orders. The number left production down -0.2% q/q in Q3, after a rise of 0.2% q/q in the previous quarter. This is not a good sign for Q3 GDP numbers, due next week. Additionally, the September data highlights that slowing growth in emerging markets, the widening of the emission scandal and now the refugee crisis are all leaving their mark on the German economy. And slowing growth in Germany will put additional pressure on Draghi to implement further easing at the December council meeting.

The AUD was unmoved by the RBA’s latest Statement on Monetary Policy; which was upbeat on the economy, emphasizing re-balancing away from the resources sector. While acknowledging the recent dip in inflation, the central bank noted that it sees inflation rising in the medium term.

Main Macro Events Today

• USD Non-farm Payrolls: October nonfarm payrolls are expected to increase by 190k, with a 180k 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 tick down to 5.0% from 5.1% last month. The workweek is expected to remain at 34.5 from September. Hourly earnings are expected to grow 0.2% which would leave a 2.3% y/y rise. Hours worked should be up 0.2% for the month following a 0.2% decline last month. Initial claims averaged 263k in October from 269k in September and 275k in August.

• CAD Unemployment Rate: Employment is expected to rise 10.0k in October after the 12k gains in August and September. Forecast Risk: Canada’s job gains in July and August were the first back to back gains this year, and the further expansion in September suggests some upwards momentum building in the labor market. But this report is volatile, so a modest jobs decline can’t be ruled out in October given the still fragile nature of the economy. Market Risk: An as-expected gain would add to the second half rebound scenario, which is consistent with the Bank’s own view and hence would not alter the outlook for no change in rates for an extended period. Hours worked will be of interest, as the stunning 0.8% surge in August was followed by an 0.8% drop in September. Hours are seen rising 0.5% m/m in October. The unemployment rate is expected at 7.1% in October, matching the 7.1% in September as the highest rates since February of 2014. Average hourly earnings are seen accelerating to a 3.5% y/y pace in October after slowing to 3.0% y/y in September from 3.4% in August. That would remain in-line with a tame compensation cost back-drop and an economy running with spare capacity.



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

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


Janne Muta
Chief Market Analyst
&
John Knobel
Senior Currency Strategist
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.