In its Minute the Reserve Bank of Australia today said to be ready for further cuts in interest rate if it will be necessary (with obvious bearish reaction in the Australian dollar).
From Japan we had a decrease in April industrial production that fell compared with the previous data.
In Europe we had the English inflation rate (which rose in May by 0.2%) and, fom Germany, a higher than expected ZEW index highlighting a possible growth of the German economy in the second half of year.
In the U.S. the inflation rate was 1,4% as expected.
Tomorrow we will have the most important market mover of the week with the FOMC meeting and the U.S.interest rate decision (and then Bernanke’s economic outlook and press conference). From England it will be released the BoE’s Minute to know the monetary outlook of its members.
ANALYSIS
Copper: the CFD is in an accumulation phase within a short period bearish movement begun in early June. The area of static and dynamic resistance $3.23 was strong and the price seems to be weak enough to confirm the violation of previous lows at $3.15. In this case, it would be interesting to seek a possible corrective move precisely in area $3.19 to find one of my short trading signals and enter the short-term trend with first target on the support area $3.06 .
As mentioned yesterday the most important market mover today was the meeting of the Fed about the decision of the U.S. interest rate. As expected, we saw the maintenance of the previous level 0.25% but the attention was mainly directed to the words of Governor Ben Bernanke, during his press conference on the economic outlook and the decision about the current expansionary monetary policy. He said that the U.S. economic is getting better, with an increase in the growth by 2014, and no change in asset purchase is needed.
In the first part of the day we received, from the UK, the Bank of England’s Minutes (the last for the current governor Mervyn King, before the change to the current Bank of Canada’s chief Mr.Mark Carney) which showed as the last rate decision meeting was almost identical to the one we had in May, with the unanimous decision to keep interest rates unchanged at 0.50% and still three members, among the nine of the Board, in favor of an increase in the asset purchase plan (ie in favor of more stimulus measures).
The equity markets had a volatile session, waiting for the important U.S. decision, and with a negative close in Europe and an unchanged session in USA.
Tomorrow the economic calendar will be particularly full with the GDP of New Zealand, the rate decision in Switzerland, the manufacturing PMI in China, Germany and Eurozone, the retail sales in the UK and the consumer confidence of the euro area.
ANALYSIS
Eur-Cad: we are in a short-term upward move, above the moving average (both in the weekly and daily chart) close to an interesting resistance area (1.37) where the prices strongly reacted earlier this year. A bullish breakout, with one of my buying signals, could be considered to resume the trend with a target on level 1.40. On the contrary, a bearish candle could also be considered for possible countertrend entry, taking advantage of a quick negotiation during the correction phase.
The FOMC meeting held yesterday has generated, in reaction to a possible future reduction of the monetary stimulus, a wave of dollar buying and weakness in financial markets, as well as the fall in the price of the precious metals.
The economic calendar today showed a GDP in New Zealand lower than expected and also a Chinese manufacturing PMI below expectations affecting the commodity currencies as well as the Us Oil, just penalized by the supply data released yesterday (well above analysts’ expectations).
As expected the Swiss central bank confirmed the interest rates between 0 and 0.10% and the “floor” of 1.20 against the euro.
From Germany the manufacturing output was slightly below expectations, unlike Europe where it was higher than expected.
Very good news from the British retail sales (2.1%, well above the 0.5% expected by analysts) and from Europe with the consumer confidence rising. On the contrary we had a negative data from the U.S. jobless claims that rose to 14mil units.
Tomorrow, last day of the week, we will have as main market mover the inflation and retail sales in Canada.
ANALYSIS
Eur-Usd: the strong USD buying has led to a sharp fall in the Eur-Usd (about 200 pips) pushing back the price to the intermediate support zone 1.3180. This level is particularly important because we are still “officially” in a short-term uptrend, but very close to the moving average and after two very bearish days. An upward retracement with a short trading signal at 1.3250 level could be considered for a sale entry. On the contrary, a return above the key level just mentioned, always with a trading signal, could be considered for a new buying position.
The week is ending with a phase of risk aversion in equity markets that, after a lateral and waiting start, reacted strongly to the possible reduction in the stimulus from the Fed and returning to a down move to the supports.
The return of risk aversion has generated a strong momentum in dollar buying that has contributed to a fall in the price of the main commodities (copper, oil, gold and silver) that have broken thei sideway range resuming the previous downtrend.
The oceanic currencies continue their moment of weakness not only for the constant pressure of their central banks, to facilitate exports, but also for the negative Chinese data (the last one was the decline in manufacturing output).
In Europe, despite the recent weakness of the euro, there seems to be a climate of positivity (shown by an increase in German enterprises confidence and European consumers confidence), but in reality…if we consider the level of unemployment…there is very little to smile!
I leave you with my usual Friday weekly video considering the economic calendar for the next week, some very interesting trading opportunities that we may have after the latest market movements and a short (but very useful) risk management explication!
This day we had a very quiet situation with our economic calendar (the only significant event was the German IFO index which was at 105.9 as the forecast), but the focus is again on Greece, where the concern of a new political crisis is growing. Yesterday it was concluded, without success, the meeting between the three government leaders to find an agreement on the delicate situation of the Greek Public Television ERT. The main problem is the number of employees to reinstate after having being fired: President Samaras thinks about a number of 2000 workers, while its ally Kouvelis of the Democratic Left pushes for all 2700 people. If they won’t get to a solution on the issue, the government crisis and anticipated elections will be closer and the euro (which is already in balance between a recovery attempt and high unemployment) might see a new a period of volatility.
Today the stock markets closed a very negative session.
The major market movers for tomorrow will come from the U.S. with the durable goods orders, the consumer confidence and new home sales.
ANALYSIS
Natural Gas: the price tested again the dynamic zone $3.80 (medium-term uptrend line) drawing a bearish candle that shows the importance of this area: we are still below the $3.85 resistance level and below the moving average in the daily and weekly chart. In this time frame we can also see a recent bearish Pin candle that shows no real and clear signs of strength. So a violation of the dynamic support mentioned above and, even better, the static level $3.60 might confirm a reversal move and let me look for one of my short trading signals with more conviction. On the contrary, an upward breakout of $3.90 could lead to evaluate long trading signals.
Today we had a slight correction in the equity markets that recovered a little bit the losses they suffered yesterday (the Asian indexes were more contrasted).
As I anticipated yesterday, the major market movers of today came from the U.S. with the durable goods orders, the consumer confidence and the new home sales all of them resulted better than expected!
Also tomorrow the attention will be placed in the United States with data on individual spending and gross domestic product. From England we will receive the Report on Financial Stability by the central bank.
ANALYSIS
Eur-Cad: the price is in a medium-term uptrend, which strengthened in mid-May, above the 1.37 support area and above the moving average on the daily chart as in the weekly. In order to enter the upward trend we’d better wait a technical correction to the level just mentioned, opening a buying position after one of my long trading signals. The first target would be the 1.40 resistance zone while, in the medium term, the resistance 1.4350 remains the most interesting level with a weekly time frame.
The economic calendar today started with the Financial Stability Report in the UK with the Bank of England that underlined the importance of an increase of the long-term interest rate to provide a higher yield in this low rate environment penalized by the highly stimulative monetary conditions.
Since the United States we had the personal consumption and the GDP which were lower than expected (especially the last one with a 0,6% below the forecast).
The stock markets had another positive session continuing the technical correction after the drop of the previous week (very positive performance for Madrid and Hong Kong today).
Tomorrow from Europe we will know the consumer confidence, the data on the German labor market and the UK GDP; from the U.S.A the jobless claims and from New Zealand the confidence in the economy and also the data on the trade balance, which is having always more importance by the Reserve Bank because of the relationship between the domestic currency and export.
ANALYSIS
Silver: in correlation with the gold and reacting to Fed’s measures, the price of this precious metal violated the very short term laterality moving down to the next support level $ 18.60. In order to take advantage, another time, of the bearish momentum (after the good profit made last week) we might consider one of my short trading signals after a possible correction in the resistance area $ 20/19,70 .
Regards
Maurizio Orsini
P.S: if you want to learn this simple and disciplined method (with no indicators, daily charts and 10-15 trades per month) send me a private message to know something more about my One-to One Coaching.
The stock markets closed another positive session with best performance for London and Tokyo.
New Zealand had a trade balance data below expectations and a slight increase in the economy’s confidence. In Germany the unemployment rate remained unchanged at 6.8% (slightly better than expected) with a decrease in the number of unemployed in June. From Europe we had a confidence in economy higher than forecasted and from England the GDP resulted at 0.3% below the 0.6% expected by operators.
The U.S. jobless claims has been lower than the previous month but not as analysts were expecting.
Tomorrow, last session of June, we will have the British consumer confidence; the inflation, unemployment, family expenses and industrial production in Japan; the inflation in Germany; the GDP in Canada and the usual monthly appointment with the University of Michigan’s confidence index.
ANALYSIS
Aud-Yen: the daily chart shows a situation of a very short term laterality of about 350 pips (between 92.60 and 89) inside a medium-term bearish move below the moving average. The best zone where to find one of my short signals is in the static and dynamic area 92/92,50 considering as a first target the bottom of the sideways range mentioned above. In case of a down break of this level (89), which also corresponds to the bottom of the double inside candles of the weekly chart, the price could accelerate the decline to the next area 86 first and 84 in the medium term.
We are at the end of this month which showed a downward movement in major equity indices (especially Europeans) that moves from the relative tops in late May almost to the 6-months bottom of this week.
The market weakness was also influenced by a number of negative data from China (including concerns about the lack of liquidity) and the delicate political situation in Greece with the “threats” of a government crisis and anticipated elections because of the problems with the public television ERT.
June was a month of two speeds for the U.S. dollar, with the first half characterized by strong sales and a second part of large recovery for the “greenback”, especially after the news about a possible reduction of Fed’s monetary stimulus.
In this sense we had a different situation in the ECB, with governor Mr.Draghi who underlined that the current expansionary monetary policy will continue until the presence of clear signs of improvement for the growth and for those macroeconomic indicators which are still negative (such as the labor market ones). The reaction of the euro, for this outlook and for the inverse correlation with the dollar, was obviously negative (after the top level reached earlier this month) confirming the laterality of the price in the medium term.
We definitely had negative weeks for the precious metals that accelerated the fall to the minimum levels of the last three years.
The month of July will start with an "explosive"economic calendar, with 3 interest rate decisions, manufacturing productions and U.S. labor market data. As always let’s analyze all this market movers, along with my naked charts, in my usual weekly video.
Have a nice week-end and see you next Friday!
Maurizio Orsini
There was a hanging man on monthly scale on EurJpy in May. Here also the 50% of retracement of the bear market and 100-months moving average, a very good resistance.
In this week stock markets were “waiting” the rate decisions until yesterday when Mario Draghi’s words gave a new bullish stimulus.
As a matter of fact, yesterday we had the last two interest rate decisions of the week (after the confirmation of the 2.75% by the Reserve Bank of Australia last Tuesday) with the European Central Bank and the Bank of England which decided to keep their rates unchanged at 0,50%. The British central bank also confirmed the monthly asset purchase plan of £ 375 billion, while Mario Draghi announced the commitment of the ECB to support the European economy with the actual accommodative policy even with new rate cuts if necessary.
Considering the manufacturing market we still saw a weak situation of the Chinese economy, otherwise we had a recovery in U.S. and European manufacturing.
Regarding the labor market we had a slightly positive data from the United States (today’s NFPR showed a growth in employment and an unchanged unemployment at 7,6%) and a still worrying situation in Europe.
Also next week we will have important market movers (although with a lower volatility respect these days) such as the interest rates in Japan, the minutes of the Fed, the ECB monthly report and other interesting data that you can see in my usual weekly video along with some of the most interesting chart situations.
I wish you all a nice weekend and see you next Monday with the daily analysis!
Maurizio Orsini
Last Friday’s Non Farm Payrolls increase the prospect of a future decline in quantitative easing by the Fed with a posite effect for the dollar (last week) and also for the major stock indices.
The economic calendar today was very quiet and we can only highlight the beginning of the meeting, in Brussels, of the euro zone finance ministers, with a speech of Mario Draghi (confirming the actual monetary policy for a longer period even with further interest cuts) and the International Monetary Fund’s report on the European situation.
Tomorrow we will receive the inflation data from China and a series of market movers from the UK (industrial and manufacturing production, trade balance, gross domestic product estimates).
ANALYSIS
Usoil: the daily chart shows, after a long period of laterality, a clear and linear upward move. The breaking of the $98 level, last week, could push the price up to the late 2012 tops. In line with the short term upward trend I’ll look for one of my long trading signals, taking advantage of a possible technical correction in the support area $101 (or better yet $99) to enter the direction of the movement with a possible target on the $106 resistance zone.
This morning we received from Germany the inflation rate, 1.9% as expected, while from the United States we had the Minute of the Federal Reserve that underlined how half of Fed members saw QE ending late this year while other members said asset purchase should continue also in 2014. Today we also have the Mr. Ben Bernanke’s speech in Boston on economic policy.
Stock indices had a low volatility session with prices almost at the same level of the previous day.
Tomorrow we will have a day full of market movers with Japan rate decision and monetary policy statement, the ECB monthly report, data on the Australian labor market and U.S. jobless claims.
ANALYSIS
Gold: the yellow metal is going through a phase of very short lateral move between $1200 and $1270, still below the moving average 21 and within a short/medium term bearish trend. The current movement might have some resemblance to those we saw in late April and late May, so it would not be wrong to wait for a new start of the downtrend to the lower support levels at $1150 first and $1060 later. In this context, the most interesting level where to find one of my short trading signals is right in the top of the sideways range (static and dynamic level $1270).
See you next Friday with my weekly analysis!
Regards
Maurizio Orsini
The week began with the Eurofin summit talking about the unique banking system and also discussing about the confirmation of the plan of aid to Greece (already approved by the International Monetary Fund).
Wednesday the Fed Chairman Mr.Ben Bernanke, confirmed the continuation of the current policy to stimulate the U.S. economy. As a matter of fact the Minute of the U.S. central bank, relating to the last rate decision, have highlighted a “disagreement” between the Fed’ members with the purpose, in contrast to what investors thought, not to interrupt at the moment the current monetary stimulus. Equity markets had a clear upward movement coming (Dow Jones and S & P) to the highest level in two months. With the same strength we had a buying of euros and a Usd sell off.
In Europe too (with no surprise!) the ECB will continue the accommodative policy (even with more cuts in interest rates) due to a variety of factors highlighted yesterday in its monthly report.
Nothing changed in Japan with the central bank governor Kuroda that confirmed both the level of interest rates (0.10%) and the monetary policy in a macro situation which is gradually improving.
We had a bullish week for Oceania’s currencies that, from a technical point of view, are still rebounding after the sharp fall of the recent weeks and, from a fundamental point of view, are descounting the best labor market data and the rise the confidence index in the economy.
On the contrary we had a negative week for the British Puound due to the data on industrial and manufacturing production.
Next week we will have the rate decision in Canada, the Chinese GDP (with China always more “under observation” for the banking system’s liquidity crisis that the government is trying to hide!) and other important market movers that you can analyze me in the weekly video, along with some interesting reflections on our “naked” charts, this time with a WEEKLY timeframe for those interested in long-term targets and/or investments!
Of course the usual detailed video analysis of the Friday, that I realize for the Forex Friends of my daily service, also shows all the short-term trading opportunities… you can see it asking for the free 30-day trial period on my website.
I wish you all a nice weekend!
Regards
Maurizio Orsini
PS: All my trades (with or without profit) are realized in my REAL account and not opening 15-20 different operations in a demo account and then finding out and highlighting only those super positive ones (watch the video about this!).
The new week begins with the confirmation of the concern about China’s growth with the industrial production lower than the expected and the previous data and, similarly, with a GDP falling at 7.5% (compared with the previous 7,7%), even in line with market forecasts. These data, however, did not affect the session of the commodity currencies that remain still bullish.
From the United States we had the data on retail sales which resulted higher than the previous month but not so much as analysts were waiting for.
Stock indices closed a positive session with better performances for Milan and Paris.
Among the most important market movers tomorrow we will have: from Oceania the inflation rate in New Zealand and the Reserve Bank of Australia’s Minute; from Europe the inflation rates in the UK and in the Euro zone, as well as the usual German ZEW confidence index; from the U.S. the industrial and manufacturing production and the inflation rate.
ANALYSIS
Gbp-Chf: the price just broke a phase of very short-term laterality between 1.4480 and 1.4330, and is just testing up the level violated last Friday. If the resistance shall maintain its strength, with a short trading signal, we could evaluate a sale entry to resume the short-term downtrend with first target 1.4170 support and then, possibly, the second level 1.4030. In case of a new bullish move above the key area 1.4330 (and therefore in case of a false bearish breakout) I would be ready to llok for one of my long signals to trade the sideways range with a target in the upper level 1.4480.
Today we received the Minutes of the Japanese rate decision in June and the Bank of Japan showed that the domestic economic situation is picking up by an improvement in exports and industrial production (although the domestic demand is still resilient). Board members unanimously approved the continuation of the expansionary monetary policy and asset purchase until achieving and maintaining the price stability target of 2%.
Also from the UK we received the Minutes of the central bank that showed how all members unanimously decided to keep unchanged the interest rate and the asset purchase (despite the disagreements of the previous meeting). From England there were also released the new data on the labor market with an unemployment rate unchanged at 7,8% and an increase in the employment.
Everything unchanged in Canada with Governor Stephen Poloz keeping rates at 1% as expected.
Today the main focus was on U.S.A. with the delivery to Congress of the semi-annual monetary policy report by Mr.Bernanke (which confirmed the expansionary policy to support economy, as he said a few days ago in Boston, and keeping short-term rates close to zero “at least as long” as the unemployment rate remains above 6.5%) and with the Fed’s Beige Book analyzing the general economic situation of the United States.
Stock markets have being moving around the previous levels.
Tomorrow the retail sales in England, the U.S. jobless claims and the delivery of Bernanke’s report to the U.S. Senate will be the most important market movers.
ANALYSIS
Aud-Nzd: the daily chart shows a short-term lateral movement within a well defined medium term downtrend. At the moment the price is very close to the top of this trading range (1.1740) and with the moving average coming down. In this bearish scenario I would expect one of my short trading signals to enter a new downward move with a first target down to 1.16 support level and then to 1.1470 area.
The current week has highlighted a common trend in international monetary policy: interest rates without changes (and with no upward outlook in the short term) and a still very “interventionist” attitude in the economic system. This approach has been formalized through the Minutes and the meetings of monetary policy of the central banks of Australia, UK, Japan and Canada, and through a direct communication by the Fed (Bernanke’s speech to the US Congress delivering the semi-annual report) and by ECB (with the declaration, in Lithuania, of Mario Draghi’s executive consultant Mr. Asmussen).
The reaction of the markets was positive, with a continuation of the upward trend especially for the European markets.
The International Monetary Fund has prepared a report about China in which invited Chinese institutions to adopt immediate reforms in the economic system in order to avoid serious problems with the liquidity crisis in the banking system, with the strong debt of the public body and the situation of the real estate market.
Next week we will have the interest rate decision in New Zealand and other market movers that you can see in my weekly video, as always, with some interesting trading opportunities!
I wish you all a nice weekend and see you next Monday with my daily analysis.
Regards
Maurizio Orsini
