Date : 28th May 2015.

TODAY’S CURRENCY MOVERS.

EURUSD, Daily

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 29th May 2015. (Second Analysis)

US Q1 GDP GROWTH REVISED LOWER TO -0.7%.

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

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

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

Janne Muta
Chief Market Analyst
HotForex

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

Date : 2nd June 2015.

CURRENCY MOVERS OF 2nd JUNE 2015.

EURUSD, Daily

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 3rd June 2015.

CURRENCY MOVERS OF 3rd JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 4th June 2015.

CURRENCY MOVERS OF 4th JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 5th June 2015.

CURRENCY MOVERS OF 5th JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 9th June 2015.

CURRENCY MOVERS OF 9th JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 12th June 2015.

CURRENCY MOVERS OF 12th JUNE 2015.

EURUSD, Daily

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

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 16th June 2015.

CURRENCY MOVERS OF 16th JUNE 2015.

EURUSD, Daily

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 18th June 2015.

CURRENCY MOVERS OF 18th JUNE 2015.

EURUSD, Daily

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

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

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

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

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

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

Currency Pairs, Grouped Performance (% Change)

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

Main Macro Events Today

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

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

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

Please, click here to access the full HotForex Economic calendar.

Janne Muta
Chief Market Analyst
HotForex

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

Date : 22nd June 2015.

GOLD ROLLING OVER FROM A RESISTANCE

Gold, Weekly

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

Nearest support and resistance levels: 1162 and 1201.

Gold, Daily

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

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

Gold, 240 min

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

Conclusion

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

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